The Latest in AgustaWestland Probe, Sonia Gandhi’s Role: An Explainer

What new information about the AgustaWestland deal, dubbed the ‘VVIP Chopper Scam’, has come out? What is the state of the Indian investigation? The Wire breaks it down.

What new information about the AgustaWestland deal, dubbed the ‘VVIP Chopper Scam’, has come out? What is the state of the Indian investigation? The Wire breaks it down.

Former IAF chief S.P. Tyagi, according to reports, has maintained his plea of innocence. Credit: PTI

Former IAF chief S.P. Tyagi, according to reports, has maintained his plea of innocence. Credit: PTI

New Delhi: A $450-million dollar deal involving the purchase of Italian helicopters for Indian government use, which made news in 2013 after Italian authorities arrested the CEO of the helicopter company over charges of bribery and money laundering, has assumed centre stage again after a recent Italian court judgement identified the role of former Indian Air Force chief S.P. Tyagi in receiving kick-backs to ensure that the deal went through.

The BJP is gearing up to target Congress leader Sonia Gandhi in the Lok Sabha and the Rajya Sabha in order to raise discussions over the Italian court order which has noted that the UPA government at the time was reluctant to “share critical documents with investigators”.

What new information about the AgustaWestland deal, dubbed the ‘VVIP Chopper Scam’, has come out? Have Sonia Gandhi and Manmohan Singh been exposed as The Pioneer claims? What is the state of the Indian investigation? The Wire breaks it down.

AgustaWestland Deal – 101

Stepping back, why was a helicopter purchase deal so controversial?  In 2010, the UPA government and the Indian Air Force agreed to purchase twelve helicopters from Italian company AgustaWestland. These helicopters were to be used primarily to transport the president, the prime minister and any other VVIP.

As with most public scams in India, the controversy around the deal revolves around with whether Indian government and air force officials received bribes in order to give the contract to AgustaWestland. In 2013, Italian authorities arrested AgustaWestland CEO Bruno Spagnolini and Finmeccanica (the parent company of AW) Chairman Guiseppe Orsi over charges that they engaged middlemen to bribe Indian politicians and Indian Air Force officials in order to secure the deal.

Shortly after this, the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) started their own investigations and the helicopter contract was put on hold. A majority of the money paid out to AgustaWestland has been recovered.

During initial investigations and immediately after the controversy broke, most attention was centred on Tyagi whose cousins allegedly received kick-backs through various north Indian shell companies. Tyagi also was in the limelight after the Italian authorities alleged that he used his position as air force chief to favour AgustaWestland by tweaking the minimum technical specifications required for the purchase.

What came out of this controversy?

After initial controversy broke, it quickly died down in the coming years. The Indian investigation has continued, but has been slow and is still examining the role of primary middle-man Christian Michel, a British citizen, whose father Wolfgang Max Michel Richard (a British businessman) was closely connected with the Congress between the 1980s and 1990s.

The ED’s investigation has been similarly slow-paced and has allegedly so far attached the assets of Michel and various members of Tyagi’s family.

The biggest reason for the lack of media attention and scrutiny was a development in 2014, when the Italian court investigating the case acquitted Tyagi of all corruption charges and acquitted Orsi and Spagnolini of “charges of international corruption”. In other words, according to the Italian court, the AgustaWestland deal appeared to be nothing more than a case of “false invoicing”.

Why is the deal back in the news now?

A few weeks ago, however, the Milan Court of Appeals completely overturned the 2014  judgement of the lower Italian court and noted that there was sufficient evidence to prove that the AgustaWestland deal was marked by instances of corruption. Furthermore, it noted that payments in case and through wire transfers were carried out out to members of the Tyagi family, some of which were to be sent to Tyagi himself.

Much of the court’s judgement relies on tapped phone conversations between the alleged middlemen of the deal – Guido Haschke and Carlo Gerosa. More importantly, it has also identified that the UPA government wasn’t overly enthusiastic in helping out Italian authorities during their investigation.

Tyagi, according to reporters, has maintained his plea of innocence. One aspect of the new court order, however, does go in his favour. A major charge against the former IAF chief back in 2013 was that he tweaked the helicopter flight ceiling specifications in order to keep AgustaWestland in the running for the contract. Any move to change these proposed specifications were vehemently refused by the Indian Air Force before Tyagi assumed charge.

The court, however, notes that there is “no proof that this move was against public interest.”

What about Sonia Gandhi, Ahmed Patel and Manmohan Singh?

The new Italian court order does mention the names of Congress leader Sonia Gandhi, former prime minister Manmohan Singh and senior Congress leader Ahmed Patel, but not with association to them receiving bribes or kick-backs. The order also does not indict these individuals.

The order references Michel’s letter to AgustaWestland’s India sales head, which notes that “Sonia is the driving force” and that her closest advisers should be targeted in order to clinch the deal. However, “Sonia as the driving force” behind the deal simply refers to the fact that the Congress leader no longer wanted to fly in the existing MI-8 choppers; not that she specifically wanted AgustaWestland helicopters.

Singh and Patel’s names are mentioned a few times order, but mostly under circumstances more closely relatable with corporate lobbying and not with any illegal wrongdoing. One instance that stands out however, is a handwritten note from middleman Orsi, asking his people to use Italian diplomats to ask Singh to “scuttle the probe by non-cooperation from the Indian Government’s side”.

The main contention that the Congress needs to grapple with, therefore, is the allegation that the UPA government didn’t do as much as it could have to help Italian authorities out with the investigation.

What will happen now with the investigation? What about Tyagi?

It’s unlikely that Indian investigation will move faster immediately or that Tyagi is likely to be indicted by Indian courts in the near future. According to The Indian Express, the CBI has approached the Ministry of External Affairs in order to get a copy of the Milan court order.

The CBI’s judicial requests to eight countries are still pending and it is likely that only after information is shared between the various parties that the investigation can start picking up pace.