From Bofors To Bulgaria

COME election time, it should surprise nobody that accusations of scams be levelled by both the main contenders, the BJP and the Congress, against each other. Certainly, neither party is a stranger to scams, even when it comes to that holy cow of the Indian polity, the defence and armaments sector.

The Congress name has become synonymous with that of Bofors, the Swedish manufacturer of the artillery gun which India procured when the late Rajiv Gandhi was prime minister, and when the sordid story of kickbacks, cover-ups and misuse of governmental machinery towards these ends even brought his government down. The NDA government has had more than its fair of scams: the collapse of UTI’s flagship US-64 Scheme, the sale of profit-making public sector undertakings at throwaway prices, the blatant favouring of particular firms in the petro and telecom sectors through manipulation of policies and regulatory mechanisms. And who can forget those scenes on national television, forever etched in the public memory, of the BJP president Bangaru Laxman taking wads of currency notes and stuffing it into his table drawer. Nor can one forget the rest of those squalid scenes of various NDA politicos, middle-men and even “connected” military officers wheeling and dealing in shady defence-related acquisitions which have made the NDA name synonymous with Tehelka, the internet-based investigative magazine which conducted the expose.

So it really came as no great surprise when a Congress spokesman alleged irregularities in the procurement of AK-47 machine guns from a Bulgarian firm. And, given the by now typical response of those in power to such charges, it was also to be expected that the BJP would resurrect that old favourite, Bofors, as a counter-attack.

Unfortunately, scams in general, and in defence procurement in particular, have become routine and an integral part of ruling class politics in India, with one scandal following another and with no systemic correctives in sight. So much so that scam allegations are now greeted with a cynical “so what else is new?” And the media in general treats each scam story as just another piece of bazaar gossip. But the fact that these are election times does not mean that we should treat these charges and counter-charges as just cheap theatrics. For there are serious issues at stake here concerning national security, transparency and accountability in governance, and the system of checks and balances in the different arms of the State.


To begin with, let us look at the recent Bofors revelations and their implications. The “new” story was broken in a newspaper article by a Swedish former police officer who was a key figure in the Bofors investigations in Sweden and who also provided valuable information and insights to some investigative journalists in India who doggedly followed the saga, who brought it before the Indian public and who were ahead of official Indian investigations for most of the time. The fact that the article contained no new facts, was a rehash of earlier articles by the same officer and others in many Indian magazines and newspapers, or even the fact that it was coincidentally published (perhaps even commissioned?) on the eve of elections in a newspaper edited by a recent pro-BJP convert, should not detract from the veracity of its main points.

The article argued that the last words on the Bofors saga are yet to be written, that everybody now knew who the once-mysterious “R” (Rajiv) and “Q” (Quattrochhi) mentioned in the then Bofors chief Martin Ardbo’s diaries were, that it was obvious that payments to “Q” after the deal was struck were kickbacks, that “Q” was yet to be properly questioned or arraigned, and that, since he was Sonia Gandhi’s relative and had access to her household, she too should be questioned about the whole affair. The nation indeed deserves to know the whole truth, and even those who oppose the NDA and are campaigning for its defeat, need not shy away from asserting as such.

However, some other related questions surely deserve answers too. Home minister and deputy prime minister Advani promptly announced that he had directed the CBI to investigate the matter in the light of the “dramatic” and “new evidence” brought to light by the article. Ottavio Quattrochhi has been a proclaimed offender and wanted in India for all the years that the NDA government has been in power. Yet he was able to flee the country and has since been openly operating in Malaysia whose courts the same CBI and others in the Indian investigative and prosecutorial team were unable to convince about the seriousness of the charges against him and therefore the need to extradite him to India. India also did not exert any diplomatic or other pressure on Malaysia, using as leverage the growing commercial relations between the two countries especially the lucrative contracts Malaysian firms were awarded in road construction, petro-chemicals and palm oil. Such pressures were exerted and indeed paid off in the UAE resulting in the extradition of wanted underworld elements. But no such efforts were made regarding the notorious “Q” whose firm Snam Progetti even obtained lucrative fresh petro-chemical contracts in India during this period!

The whole world knew “Q” and the fact that he was a relative of Sonia Gandhi. What prevented the CBI or the “modern-day Sardar Patel” from pursuing “Q” or making inquiries of Sonia Gandhi all these years? Did they really require a reminder from a former Swedish police officer, that too on the eve of elections? The CBI which has now been “directed” by home minister Advani to pursue the “new” leads, is the same CBI which is also supposed to be “investigating” Advani’s role in the demolition of the Babri Masjid, and the same CBI which has been unable to get Swiss courts to release hard Bofors-related evidence acknowledged to be available with Swiss banks and also unable to obtain further information from Martin Ardbo, the veritable horse’s mouth, still comfortably leading a retired life in Sweden. And then there is the deafening silence regarding the cryptic “N” of the Ardbo diaries, “R’s” confidante and relative (widely believed to be Arun Nehru) who just happens to have found a cozy perch in the BJP. There have been numerous leads to follow, many avenues to pursue and much hard work to be done to bring the Bofors truth into the light. But none of this has happened in any meaningful way so as to bring about results, in much the same manner that the CBI has gone about prosecuting the Babri Masjid demolition and the surrounding conspiracy. Is it that it suits the BJP and its allies to keep the Bofors skeleton inside a cupboard to pull out and rattle whenever it suits them?


So now to the other story, the Bulgarian AK-47s, the latest in a long list of scams in defence-related and armaments acquisitions during the tenure of the BJP-led government. The purchase of the AK-47s, however, concerns not the defence ministry headed by George Fernandes but the home minister headed by the redoubtable “iron man” himself, Lal Krishna Advani.

The Rs 53 crore deal (often mistakenly referred to in sections of the press as a Rs 200 billion deal!) for purchase of 64,000 AK-47 automatic rifles to equip Indian paramilitary forces was struck with the Bulgarian state-owned firm Kintex Share Holding Company. The Congress spokesman’s allegation was that normal tendering procedures had been by-passed, that the Bulgarian firm had been inexplicably given preferential treatment over even the Russian original equipment manufacturers and further that Kintex was a disreputable firm with questionable links with terrorists, gun runners and drug smugglers, and whose sister-concern K A S Engineering Ltd was involved in the 1995 Purulia arms drop conspiracy. The BJP’s counter was that all procedures were followed, the Bulgarian and rival weapons were subjected to tests which showed the superiority of the former and that hard bargaining had enabled a good product to be purchased at a very low price.

As for the firm’s reputation, the BJP quaintly asserted that Kintex was a State-owned firm! For good measure, the BJP added that it was not good to question such defence or security-related deals since this affected the morale of the armed forces, the very same argument used by the Congress during the Bofors debates in parliament and outside, and by the BJP-Samata party during the whole unsavoury Tehelka controversy.

The detailed clarifications put out by the spokesman of the ministry of home affairs, and those by BJP spokesman V K Malhotra, have raised as many questions as they provided answers. They stressed that due process had indeed been followed, as if that were enough to allay suspicions: the Tehelka tapes in fact brought out just how it can be made to appear that all procedures have been followed and, in fact, that kickbacks are given precisely to those officials who can ensure such an appearance of everything being above board.

In the present case, the MHA claims that the first tender put out by it in May 2002 received only a single response, from Kintex, requiring a re-tendering in September 2002 which brought responses from Kintex and Romtechnica, a Romanian firm, both of whom quoted prices and sent samples of AK-47 rifles while the well-known Russian import-export firm Rosboronexport quoted for and sent in samples of AK-103 rifles. The Russian offer was rejected, said the MHA, because “it did not meet the tender requirements” neglecting to mention that the AK-103 is a much more recent and advanced model surpassing the requirements of the Tender based on the excellent but outdated AK-47 of Second World War vintage. To have rejected this offer outright is either an extremely rigid bureaucratic response or an effort to use hide-bound procedures as an excuse to knock a good competitor out of the race, and one with a long track record of supplying the Indian armed forces.

A selection team interested in choosing the best weapon could well have sought a revised offer for AK-47s if it was strictly interested in just that type of weapon. Even Lt General Kalashnikov, the inventor of the AK series of rifles named after him (Automatik Kalashnikov), is believed to have appealed to the Indian government to reconsider the offer jointly by Rosboronexport and Izhmash, the original equipment manufacturer and international patent holder of the AK-47 and other rifles in the series, under license from whom the Bulgarian and Romanian firms were manufacturing the AK-47s! In the event, the selection team ignored the Russian offer and “stuck to procedure”.


 And what about Kintex itself and the charges of its dubious links with various unsavoury forces? The MHA spokesman said that “it has also been certified by the Bulgarian Embassy in India that M/S Kintex is a 100 per cent state-owned company of the government of Bulgaria”. Not only was this a quaint and rather peculiar defence, but ignores the whole history of this ill-reputed firm.

Towards the end of the Soviet bloc era, the Bulgarian arms industry including the State-owned Kintex was in the doldrums and looking for hard currency markets, not discriminating between different kinds of buyers and the use to which the arms were being put. In the late ‘80s, US president Ronald Reagan used devious means to arrange for Kintex to supply arms to the anti-Communist Contra rebels in Nicaragua, possibly using drug money as would later come out during Congressional investigations. A few years later, Italian police investigating organised crime identified Kintex as part of one of the world’s largest arms trafficking organisations linked to Middle-East drug cartels and backed by powerful bankers in Europe. An Italian firm called Stibam International based in Milan, headed by a Syrian national who also doubled as an informant for the US Drug Enforcement Agency, was a major hub of these operations which relied heavily on Kintex for arms supplies. The same nexus of banks, drug cartels and arms trafficking, specifically including Kintex, was also used later by the US government for its clandestine arming of Saddam Hussain in the ‘80s.

Kintex and other state-owned Bulgarian arms manufacturing and trading firms have also been linked by leading European newspapers to the notorious Russian black-market arms dealers Leonide Minin and Victor But. The US government has declared But the “world’s number one arms-dealer” and believes him to be Al Qa’ida’s top source of arms. Bulgarian arms have also been known to have flowed to Albanian gangs operating in Kosovo and to all manners of fighters in Macedonia and elsewhere in the Balkans. Turkey has also alleged that Kintex supplied arms to, and even helped move Al Qa’ida fighters into, Chechnya, something the Bulgarian government has denied, saying perhaps there was another company of the same name!

Even after Bulgaria’s entry into NATO, its arms industry is facing problems because it is not geared to meeting NATO specifications and standards, and is now facing new competition from more established and sophisticated American and European rivals. In the short-term, therefore, firms such as Kintex are more than ever stressing sales to less demanding markets including India, while Bulgarian arms have also found their way through intermediaries into rebel hands Iraq where Bulgarian forces are serving with the US-led coalition!

So much for the reputation of Kintex and the belief that, just because it is State-owned, it should be regarded as being lily white! The MHA’s statement also seeks to reassure sceptics about the quality of Kintex rifles by stating that a team designated by the IG of CRPF has inspected the Kintex manufacturing facility near Sofia and were satisfied by its ability to make quality rifles. However, there is some doubt as to exactly what manufacturing facility was shown to the Indian team, since some reports from different European agencies have it that Kintex actually stopped manufacturing AK-47s in 1989 and that they have merely been trading these weapons since then, procuring them from different unnamed and perhaps dubious sources.

If suspicion and some revelations is all that it takes for Shri Advani to direct the CBI to investigate an issue, then the procurement of AK-47s by his ministry appears to be a fit case for an investigation. But by whom, and towards what end?

The BJP-led government is widely believed to be the most military-friendly government that India has had. The BJP and its allies, particularly defence minister George Fernandes, are supposed to have put in place an effective procurement system which would put an end to unnecessary red-tapism which has bedevilled security-related procurement and caused huge delays. The whole nation however knows where this has led. From dubious Kargil-related procurements which were received after the conflict, to hugely expensive aeronautical-grade aluminium coffins (who can forget George Fernandes’ marvelous riposte that these allegations were false because what was procured were not coffins but caskets!), to Kargil-specific taxes finding their way into the general exchequer and all the other revelations in the Tehelka tapes which were never investigated. Time and again, the same defence which the Congress put up during the Bofors debate, is being fielded by the BJP and its allies who were then part of the accusing team: that the morale of the armed forces would be adversely affected, that national security would be weakened, that India’s enemies would benefit.

 Fact is that full accountability and transparency in such dealings, while ensuring effective and timely procurement, has yet to be brought about. Apart from charges and counter-charges, will these elections give us a government which can deliver on such a promise?

2nd May 2004