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Why the 2G spectrum buck doesn’t stop with Raja

6 Feb. 2012 11:36 PM IST

A. Raja’s subversion of 2G spectrum licence allocations, revoked by the Supreme Court last week, would not have occurred in the first place without powerful patrons guaranteeing him protection from the consequences of his malfeasance. Since the malfeasance was evident as early as September 2007 through the media and official government documentation – now in the public domain – it carried great risk of exposure. Raja’s protectors were therefore obviously playing for very high stakes.
Those stakes centred around the May 2009 Lok Sabha election for which key allies within  the  UPA  needed large funds. The genesis of many of the scams in UPA-1 – CWG, 2G spectrum, Scorpene submarines – lies here. Need and greed have a nodding acquaintance with each other. Funds are fungible. Those designated for a party’s electoral needs and those which, through greed, flow into individual bank accounts are difficult to separate.
Through 2007 and early-2008, the Indian stock market was going through a bull phase, scaling 21,000 in January 2008. New real estate companies – many of them fronts for politicians’ black money – proliferated. In this fertile atmosphere, Raja and his cohorts set about methodically – and brazenly – to subvert the political, business and bureaucratic ecosystem. By February 2008, they had completed their theft of the public exchequer. 
A year later, following the well-funded May 2009 Lok Sabha poll, when ministerial portfolios were being allocated, the subverters wanted control of key ministries to: a) continue their hold over natural resources; and b) ensure that all incriminating paper-skeletons remained firmly in the closet. The prime minister, bruised by his long battle over the Indo-US nuclear deal, culminating in the infamous cash-for-votes trust vote in parliament in July 2008, had neither the strength nor the will to stop the subversion.
Who could have? Obviously those who benefited from “coalition compulsions” – principally the leaders of the Congress and the DMK. That they did not stop Raja is why UPA-2 stands exposed today as the most dysfunctional and tainted government in independent Indian history.
The prime minister was clearly upset with Raja’s buccaneering ways. But he eventually gave up what he knew was a losing battle. After the UPA government was voted back to office in May 2009, the prime minister held out against reappointing Raja as Telecom Minister in UPA-2. Again, political forces with greater power than him stayed his hand. Recuctantly – for by now he knew exactly how Raja had subverted the 2G spectrum licence process between September 2007 and January 2008 – the PM accepted Raja back into the UPA-2 cabinet in his old ministerial portfolio, telecom.
The PM had resisted the move to re-induct Raj for six days between May 16, 2009 (when the Lok Sabha election results were announced) and May 22, 2009 (when the PM was belatedly sworn in). In those six  crucial days the PM opposed both Raja’s re-induction as well as handing other “lucrative” portfolios to DMK nominees. He was over-ruled. It was during these six days that many of the taped conversations between lobbyist Niira Radia and a cabal of journalists, politicians, businessmen and assorted middlemen took place.
So where does the 2G spectrum buck really stop? It stops firmly at the doorstep of the two leaders in the UPA government who had the power to stop Raja but did not – UPA chairperson Sonia Gandhi and DMK chief M. Karunanidhi. The very structure of the UPA government with its duality – power without accountability for the UPA chairperson and accountability without power for the prime minister – is unsustainable and undemocratic. It lies at the root of this government’s sins of omission and commission.
Justice O.P. Saini’s 65-page order rejects the allegation that then Finance Minister P. Chidambaram was guilty of criminal conspiracy. But at the same time the judgement accepts unequivocally that Chidambaram was party to two critical decisions Raja took. First, fixing the 2008 2G spectrum licence fee at 2001 prices; and second, allowing dilution of equity by two new licencees (Unitech and Swan) within months of receiving their licences at throwaway 2001 prices, leading to windfall gains in the two recipient Indian companies’ shares premium reserve account  even while depriving the public exchequer of the full benefit of the mobile telephony sector’s burgeoning 2008 market value.
The argument that Raja alone subverted the first-come, first-served policy into a first-cash, first-served policy is implausible. But criminal conspiracy is a notoriously hard charge to establish legally. The high bar Justice Saini has set for ministerial complicity to be considered tantamount to criminal intent will now be tested in the Supreme Court.
The 2G saga has diminished many reputations. A section of the media has been tarred. The two apolitical pillars of a democracy’s four estates – the judiciary and the media – have a fundamental obligation to be – and be seen to be – politically neutral. If, for example, a journalist or a former judge accepts an award (such as the Padma) from the executive or legislative branches, that neutrality can – sometimes unfairly – be called into question because it closes the distance between, on the one hand, the government and the legislature and, on the other, the media and the judiciary whose role is to provide the necessary checks and balances between the four estates. What next? The government now gains twice over. The new 2G auction the Supreme Court has ordered within four months will fetch the deficit-hit treasury an estimated Rs. 50,000-70,000 crore. That will – even though it exposes Kapil Sibal’s zero-loss theory to ridicule – allow UPA-2 to finance its ambitious food security bill and other social welfare schemes apart from reducing next year’s fiscal deficit. The new 2G spectrum auction could also present one more opportunity to middlemen acting for their political masters to skim off a small percentage as “facilitation fees” from the new bidders. Meanwhile, even if the government has to return – though only under legal duress as Sibal has insisted – the fees paid for the 122 cancelled licences, that figure will amount to less than Rs. 10,000 crore since the licences were deliberately underpriced by Raja and his accomplices. Who precisely those accomplices were will be known as the trial unfolds.
The big losers in all of this are foreign telecom investors. A part of their investment was allegedly siphoned off as bribes for party and personal funds by Raja and his cohorts in the DMK and beyond. With investors like Russia’s Sistema, Dubai’s Etisalat and Norway’s Telenor severely affected by the Supreme Court’s cancellation of 2G spectrum licences, some may sue the UPA government for a malfeasant cabinet policy and its fraudulent implementation that has caused them a potential loss of several billion dollars.
That is the collateral damage India could suffer for the UPA’s “coalition compulsions” – a poor euphemism for institutionalised corruption.

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Minhaz Merchant