The military-corruption complex

There are three tracks of corruption in defence procurement. The first is demand estimation, demand vetting, demand projection and inter se priority determination; the second is technical, from framing the GSQRs to preparing the engineering specifications, technical trials, user trials and techno-commercial evaluations before the procurement process commences. Both are the jealously guarded turf of the services and brook no interference from outsiders. Neither the processes nor the practices are audited or subjected to independent professional scrutiny. However, this case being an SPG requirement, these tracks are irrelevant.

The focus should be on the third track, the actual procurement, where the onus shifts to the ministry. In all transactions, there is an established hierarchy of rent collectors along the approval chain. This approval cycle is so complicated and lengthy that the opportunity for each functionary to collect his share of the booty along the chain is maximised. At no stage does anyone need to circumvent the procedure, because following the procedure itself provides the opportunity. Up to a certain stage, all that is needed is to keep the process moving forward, for the rent gets automatically paid at each stage of the transaction. These relatively small payments are meant to keep the ball in play. The beneficiaries are generally junior- and middle-rung babus, the network of personal staff attached to officers dealing with procurements, sometimes the officers themselves, service representatives at the middle level who participate in the PNC (Price Negotiation Committee) meetings, etc. The main commodity on sale is information.

Things start getting hotter as the negotiations move towards a conclusion. This is when the main political-level decision-maker needs to get closer to insider information through his trusted person, as he needs to know in advance who the likely winner will be. This is the time to summon the probable winner or his agent, the chief deal-broker, the political fixer and legal and financial facilitators and work out the final details of the pay-offs, sharing arrangements and routing. There is a flurry of official briefing meetings so that the decision-maker(s) can keep ahead of the vendors in the information game. At this stage, all the vendors have to open something like a letter of credit so that whenever the final decision is taken, the payments are automatically credited to the designated accounts. Occasionally, last-minute theatrics occur because of a falling out among the agents and the principal deal-brokers and fixers. If one of the major deal-brokers is antagonised, he can ensure (through selective media leaks or a sudden review of priorities) that the deal is either scuttled or pushed back sufficiently to enable him to regain control. However, such instances are rare and normally it is in everyone's interest to cross the final hurdle.

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