The Hindu : Rulers of the dark

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Sunday, May 05, 2002

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Rulers of the dark

''Sharks''. That is what the top middlemen in defence deals are called. They operate with impunity, says Sandeep Dikshit.

INDIA OFFICIALLY banned middlemen in defence purchases after the revelation of their presence brought down a Government at the Centre over a decade ago. Since then, like the proverbial ostrich, civil society ignored their shadowy existence till a news portal's concealed cameras showed Army officers feting set-up artistes ushered by clerical cadre of the Defence Ministry.

No less shocking was the ease with which these so-called middlemen penetrated the highest offices in the land and managed to show that actual middlemen in defence deals had been operating with impunity despite the ban on agents since the early 1990s.

However, the news portal's revelations about official corruption were no news to those tracking the Defence Ministry, which has been considered by the rest of the population as the solitary untainted arm of the establishment. They knew that, like the rest of official India, the Defence Ministry has not been immune to inducements ranging from wine and women to jobs for siblings of those influential enough to swing purchase orders in favour of companies or countries.

Perhaps there is no sylvan colony in posh South Delhi which doesn't host middlemen of varying hues. The upper crust or the "sharks" include a war hero, a couple of businessmen originally from Rajasthan, a smooth-talking Maharashtra-based politician and a refugee from Pakistan who invariably buys the latest super-luxury car unveiled in any part of the world. Called "sharks" by wannabe middlemen because of their predatory nature, some of them are known to have purged challengers, they have a vice-like hold on the defence establishment and the ears of East European weapons manufacturers who are the main suppliers of armaments to the Indian defence sector on a single tender basis.

They are helped by the fact that civil society has rarely objected to purchases from the former Soviet Union and East European nations because of their long-standing and wide-ranging alliance with the Indian establishment. The sharks are said to have swung defence deals for some European companies as well.

The second category basically pushes files for the smaller companies whom the `sharks' would not deign to touch thereby sustaining the "food-chain" in the Ministry's civilian wing. Then there is the third grouping of State-level intermediaries who are into the provisioning racket, ranging from supplying poultry and food to spares for men posted in far-flung corners of the country.

A fourth bracket which has perhaps had the longest tenure in South Block has taken advantage of state regulation of production of ordnance and equipment by influencing the purchase of raw materials by the three-dozen munitions factories, about 40 research organisations and several public sector undertakings.

A sharp reduction in the defence budget in the late 1980s and early 1990s brought about by fiscal cramps saw an even more lucrative racket taking shape — upgrading of existing equipment. The `sharks' especially were quick to spot the opportunity and did not waste time gravitating to the gravy train. This segment offered an unprecedented opportunity because upgrades were in synch with the Third World psyche of making do with available resources and were not as attention-catching as purchases of brand new equipment.

Moreover, advancements in existing hardware is a nebulous business because the tendency is to bank on existing suppliers, most of whom are represented by the `sharks'.

Every major deal or <147,1,0>upgradation brings in its wake allegations of misdemeanour. Rumours have abounded of kickbacks running into hundreds of crores of rupees for major deals such as purchases of T-90 tanks, Sukhoi 30 MKI, MiG-29 BiS upgrade, Mirage-2000, M-17-B helicopters, torpedoes, missiles and even submarines.

The latest allegation is bound to involve the purchase of an aircraft carrier.

While some of the charges are levelled by competitors who lose out, especially the West Europeans, there are many deals in which allegations of corruption seem to have a ring of truth. But for the Bofors saga, in which a dogged media played a major part, all other charges have died a natural death.

Civil society, at least, has given up on the politicians for reforming the system unless massive public opinion either throws up a new lot or forces them to mend their ways.

The only hope is that some as-yet-unbent politicians would combine with the vast majority of honest services personnel and bureaucrats to reform the system. While hope will continue to linger, the prognosis is not promising for the arms bazaar appears destined to flourish.

The Intelligence Bureau is said to have details of the close nexus between middlemen and bent or pliable bureaucrats and politicians.

The amounts involved in pushing through a deal are mind-boggling and one of the players in each deal is invariably from the political or social elite; thus making him "untouchable".

Seeing the way the wind blows, especially the familiarity of the `sharks' with politicians whom they are known to generously fund in times of need, many serving officers are known to have aided them in the hope of employment after entering the void of retirement.

As is the case the world over, middlemen and military-industrial establishments always viciously strike back at whistle-blowers as the celebrated Purohit case showed recently.

The navy officer had objected to diode crystals being bought for Rs. 35 and after a week for Rs. 17,000. A balancing piston was bought for Rs. 1,500 but after a month a similar piston was purchased for 25 times the price.

He was rewarded by being denied promotions and later was accused of being involved with defence contractors.

Zero tolerance for corruption was said to be one of the factors behind the dismissal of the former Navy chief and presently crusader for Dalit rights, Vishnu Bhagwat.

Having said that, it would be unfair to taint the entire defence establishment despite the fact that the ghost of middlemen looms large over practically every deal.

Most of the soldiers remain true to their uniform and the pledge taken at the time of induction.

A major reason for the presence of middlemen is the arms procurement decision-making and behavioural factors of society.

As a result of maintaining confidentiality in the interest of national security which stymies even well-meaning debates, many aspects of defence procurement go unchallenged.

The rationale for purchasing a weapons system largely remains unexamined and even the political Executive is denied access to official files.

In the present climate, what is required is a public debate that outlines how much confidentiality should be maintained in the national interest.

"It is important that national security does not become a standard argument for avoiding accountability for institutional waste, fraud, abuse, professional neglect or inefficiencies. The military's requirements for confidentiality are legitimate so long as they relate to its plans and capabilities. It is with processes, procedures and methods that abuses creep into the system unless there is accountability. The need therefore is to develop oversight and audit processes and skilled parliamentary committees assisted by professional expertise," notes an independent study.

But there is no move to initiate action on these fronts. The BJP and the Congress have shown no inclination to open a debate on these aspects while the Third Front's various avatars had promised much but remained embroiled in mutual bickering.

In the absence of any political initiative, accountability suffers, opacity gains and middlemen continue to enjoy unfettered access.

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