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DEDUCING THE INFAMOUS BOFORS SCAM


India saw one of its biggest arms deals over 30 years ago, which soon became a weapons-contact political scandal entangling the ruling party Indian National Congress at the time. A multi-million dollar contract was signed on March 24, 1986, for selling Howitzer field guns between the Government of India and the Swedish weaponry company Bofors. On April 16, 1987, the first reports of a potential transaction scam arose. Bribes worth $6.9 billion were allegedly paid to people in India, including key politicians and bureaucrats, and defense personnel to finalize and formalize the agreement.


HOW DID IT HAPPEN?

Bofors AB, the Swedish arms manufacturer of the internationally renowned howitzer gun, and Indian defense ministry officials signed a $1.4 billion contract in March 1986. The agreement called for the sale of 410 field howitzer guns to India. This massive scam was busted by Swedish radio and then by a Swedish newspaper, which alleged that Bofors AB had paid a large amount of money as a bribe to Indian government officials and members of the ruling Congress party. It was the biggest arms deal in Sweden, and money marked for development projects was diverted to secure this contract at any cost. The investigations revealed flouting of rules.


After the report of Sweden’s National Audit Bureau and a subsequent report published by ‘The Hindu’ newspaper on companies dealing with trading in guns in India and the bank accounts related to the deal. It was after this that the Comptroller and Auditor General of India had taken on this case to investigate further.


The case acquired immense political overtones, a battle ensued between the Congress party and the Opposition. Prime Minister Rajiv Gandhi’s defeat in the 1987 general elections was due to the role of the Congress party in the scandal. In the later investigation, Ottavio Quattrocchi, an Italian businessman who had close connections with the Gandhi family was revealed to be the middleman involved in the scandal and emerged as a powerful broker in the 1980s between big businesses and the Indian government. While the case was investigated, Rajiv Gandhi was assassinated. Later the Swiss banks released 500 documents after years of a legal battle. The Indian government lifted its ban on Bofors. The lifting of the ban came during the Kargil War when the Bofors guns proved efficient but were affected by a shortage of spare parts.


Sweden’s National Audit Bureau had released a report highlighting the payment of $40 million by the Swedish company, Bofors, to Indian middlemen but still, quite a bit of the complete report was not revealed as it involved bank secrecy protocols. When the NDA government led by the BJP was in power, the Central Bureau of Investigation (CBI) filed the charge sheet against Quattrocchi, Win Chadha, Rajiv Gandhi, and the defense secretary S.K.Bhatnagar. The Delhi High Court halted all proceedings in the lawsuit in June 2002, but the Supreme Court of India overturned the decision in July 2003.



In 2006 the CBI acceded that roughly ₹210 million, about US$4.6 million, in the two accounts were withdrawn by the accused. CBI claimed in an affidavit filed before the Supreme Court that they were still pursuing extradition orders for Quattrocchi. The Interpol, at the request of the CBI, has a long-standing red corner notice to arrest Quattrocchi. He was detained in Argentina, As there was no extradition treaty between India and Argentina, the case was presented in the Argentine Supreme Court. The government of India lost the extradition case as the government of India did not provide a critical court order which was the basis of Quattrocchi's arrest. Later Quattrochi died of a heart attack in Milan.


CONCLUSION

This was, in essence, a textbook case of corruption involving an armaments manufacturer/seller and a government buyer. The procedures used by this specific gun dealer were nothing out of the ordinary. In the Bofors case, the true beneficiaries could not be identified because of manipulation at the highest levels. Since 1989, almost all parties have been in power but the system has hardly changed. The rot of unaccountability runs deep and is perceptible in all institutions where the country's most literate and conscious population works. It was estimated that 2,500 companies vanished in the 1990s, leading to monumental losses to the public. The nation facing an increasing number of scams and breakdown of systems. Those in power are unaccountable since they work in a system of silence and surround themselves with sycophants. When will we learn to fix responsibility?


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