Tuesday, February 26, 2019

THE BIG LIE CALLED “RAFALE SCAM”

Adolf Hitler coined the term “groβe lüge” (“Big Lie” in German). The colossal falsehood in a 'Big Lie' makes it believable, because no one would think that the 'truth could be distorted so much and so preposterously'. Hitler went on to say: “The greater the lie, the easier (it is) to believe it.” Then again, repeating a 'big lie' often enough (to paraphrase Goebbels), makes people believe it!


The Nazis used the 'big lie' effectively, albeit cunningly, as a propaganda technique to promote bigotry and anti-semitism during the 1930s and 1940s. Looking at all the brouhaha raised over the “Rafale Deal”, it appears the Congress too has taken a leaf out of the Fascist book.


No Specific Scam Value

First things first. Let us start with the a priori assumption that there indeed is a scam. If so, the question that begs to be asked is: “What is the estimated value of the alleged scam?”

Well, Sri Rahul Gandhi has extensively tweeted about the deal over the last year or so. In those tweets he has variously specified the scam value, which has ranged from Rs.22,000 to Rs.130,000 crores. The tweets put the scam at the average of about Rs.65,000 crores.
So, the first million dollar question: How can the scam amount exceed Rs.59,000― the entire Rafale deal value for 36 fighters in flyaway condition?

Clearly, it is a case of not “notional”, but “confusional losses”.

No Quid Pro Quo

Nonetheless, the acquisition of Rafale fighters is through an Indo-French governmental contract. So then, who has bribed whom? Is Sri Gandhi insinuating that Government of India paid off officials in the French Government? Or, did the French Government offer bribes to bag the deal? If so, who were the beneficiaries of the kickbacks? Either hypothesis is atrociously ludicrous and in equal measure too, for, there is no trace of either any money trail or any wrongful gain/loss.

The allegation is that the ADAG is a beneficiary by virtue of being an offset partner. That theory too is replete in absurdity...um, and hilarity! I mean, where is the proof of kickbacks paid by the French Government to Anil Ambani? Oh, if the offset partnership between Dassault and ADAG is supposedly the smoking gun evidence, then there are 59 other partners vying for the spoils. Besides, there are apparently over 20 other partnerships on the anvil being hammered by the three main manufacturers of the Rafale fighter, namely, Dassault, Safran and Thales.

Offset Business Partnerships

The offset partners competing for about Rs.21,000 crores of business are all well known, legitimate entities in the Indian aerospace sector and related industrial landscape. Many of the selected partners are listed companies; others are Indian subsidiaries of multinational corporations; and, a few are public sector undertakings and their subsidiaries.

On top, Dassault is contractually bound to award offset contracts worth Rs.9,000 crores to the Defence Research and Development Organisation (DRDO).
The deal will surely revitalise the Indian aerospace industry.

Multi-Role Combat Aircraft (MRCA) Selection

As is well-known, six companies, namely, Boeing (F/A-18E/F Super Hornet); Dassault Aviation (Rafale); EADS (Eurofighter Typhoon); Lockheed Martin (F-16 Fighting Falcon); Russian Aircraft (MiG-35); and Saab Group (JAS 39 Gripen), were in the fray for supplying MRCA aircraft to the Indian Air Force (IAF). None of these six aircraft qualified in toto on the stringent Air Staff Qualitative Requirements (ASQR) specifications. Thereafter, the IAF short-listed the Eurofighter Typhoon and Rafale based on laboratory presentations and rejected the other fighter aircraft.
Finally the Rafale was selected with India-specific enhancements. Then the Government of India, that is, the UPA-II led by the Congress Party, carried out exclusive negotiations with Dassault. Shouldn't too eye-brows be raised then about this process? Why were negotiations not carried out with Eurofighter Typhoon? And, the obvious coup de grâce:

Did any UPA functionaries receive kickbacks for selecting the Rafale? Hope we get some answers.

Bofors Bribery Scandal

In the 1980s, teams of the Indian Army evaluated the field howitzers of four manufacturers (from United Kingdom, France, Austria and Sweden). The Swedish gun fared poorly in field trials, firing only upto a distance in the 11-21 km range, against the technical specification of 30 km. Hence, in the three reports submitted, the Bofors 155mm Howitzers was ranked “Second”, at best, and, “Fourth/Last”, at worst, among the contenders.
In spite of the outright rejection, the then Defence Minister, Sri. R. Venkataraman chose Bofors.

Why?

Well...the Bofors Deal (unlike the instant Rafale Purchase) involved middlemen. On top, a whistleblower inside Bofors revealed details of the kickbacks amounting to Rs.64 crores. Later, information about the money trail too emerged (leading to Swiss bank accounts).

Bungled Investigation and Prosecution

Despite the mountain of evidence, the Central Bureau of Investigation (CBI) botched up investigations badly. Deliberately so, as it seems!

Not only the registration of FIR, but also submission of rogatories were delayed. An Italian businessman and the main Accused in the bribery scandal, Quattrocchi was allowed to escape to Malaysia. Later, the Interpol Red Corner Notice against him was later withdrawn. Further, Quattrocchi's bank account in London was allowed to be de-frozen and a weak case for his extradition was made out in Argentinian Courts. Neither was the Argentinian verdict in the extradition proceedings nor the judgment of the Delhi High Court in 2004 appealed on.

Rafale Deal: A Complete Contrast

The Rafale acquisition is poles apart from the Bofors purchase! The direct involvement of Government of India sans middlemen; lack of any money trail; procurement of the aircraft rated numero uno; the hard bargain struck on offset credits; absence of any credible whistle-blower...all make the Rafale deal clean as a whistle!

Conclusion: #NoRafaleScam

Thus, Sri. Rahul Gandhi's claims of a scam seem like a “red herring” engulfed in smoke and mirrors! And, that smoke is devoid of not only fire, but also firewood! No wonder then that the Hon'ble Supreme Court (SC) and the Comptroller and Auditor General (CAG) have given the purchase clean chits. Therefore, accusations of a scam in the Rafale acquisition is a figment of imagination, or rather, politically-motivated imputation!

Every time Sri Gandhi alleges a scam, he implies that all of Prime Minister's Office, Apex Court, Ministry of Defence, CAG, IAF, Defence Acquisition Council, Indian Negotiating Team (of Rafale), etc., are all lying. Hence, the more he flogs the dead horse of a scam, the more foolish, hollow and sinister he looks and sounds!

But then, as Machiavelli put it, “politics have no relation to morals”. 


Monday, February 18, 2019

LIES, DAMNED LIES AND POLITICAL SUBTERFUGE


A seminar titled “RAFALE & NATIONAL SECURITY” had been recently organized in Bengaluru. An elite, erudite panel of speakers spoke on various aspects of the acquisition of the fighter aircraft for the Indian Air Force.

The panel was unanimous in giving the central government a clean chit. The conclusion was that there was no corruption in the deal between India and France as it was a government-to-government contract. It was further pointed out that the “Offset Clause” in the contract will generate business for MSMEs in the country. 

It was also clarified that about 72 enterprises are likely to benefit from the roughly Rs. 30,000 crores of defense offsets. The detailed list of these enterprises selected for “Offset Partnerships”, is available in the public domain at this link

The schematic below also summarizes the deal structure vis-a-vis offsets.

Questions of Impropriety

A lady in the audience, who identified herself as a Congress-supporter, refuted the assertion and said that Reliance had orchestrated the scam. She claimed that Reliance had created numerous shell companies and that the deal was shrouded in corruption.

That prompted me to research the veracity of the lady and/or Congress’ claim of shell companies being used to engineer the scam through crony capitalism or otherwise.

The take in a nutshell on the lady’s accusations: ABSOLUTE HOGWASH!!

The Truth About Offset Partners

The details of my research and its findings are below:
  1. There are about 60 partnersbesides DRDO, the single largest beneficiary of offsetsthat Dassault Aviation, Thales and Safran (the three main manufacturers) have contracted with for the offsets.
  2. With the exception of one entity, the partners are all corporate entities. Many are listed companies; some are Indian subsidiaries of multinational corporations; and, a few are public sector undertakings and their subsidiaries.
  3. With the exception of 3 offset partners, the other partners are all legitimate business entities, which have been in the aerospace and related fields from a time prior to the finalization of the Indo-French deal. The three in question, namely, Dassault Reliance Aerospace, Safran Electrical & Power India and Thales Reliance Defense Systems, are privately held joint ventures and/or multi-national companies.
  4. NONE OF THE 60 ENTITIES IS A SHELL COMPANY. The list is provided in the tables below.




There are apparently 20+ other entities which are being considered for offset partnerships [Refer list below]. 


The award of offset contracts are expected to only commence from October 2019.

Scam or No Scam

So then, the moot question: WHERE IS THE SCAM?! Is it the figment of someone’s fertile (or, vile?) imagination??!!!

You be the judge!