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Sunday 5 February 2012

2G SCAM Rook, Bishop, King? The UPA government totters as the Supreme Court further exposes the political corporate nexus in the 2G scam. Should the PM resign before more bad news hits him?

Clouded view The 2G verdict casts a shadow on PM and FM
Rook, Bishop, King?
The UPA government totters as the Supreme Court further exposes the political corporate nexus in the 2G scam. Should the PM resign before more bad news hits him?

What They Had Said Then...
Raja has told me that what he did was to implement policies which were in place since 2003. One has to look at the problem in proper perspective. There was a policy which was in place before our government came into power.”
Manmohan Singh, Prime minister

What the SC says “The argument that all the licences granted 2001 onwards should be cancelled does not deserve acceptance because those who have got licence between 2001 and 24.9.2007 are not parties to these petitions and legality of the licences granted to them has not been questioned before this court.”

“Right from the beginning, we have been saying that it (2G scam) is a perception, the allegations are based on perception.”
Kanimozhi, DMK, Rajya Sabha MP

What the SC says “Respondents were
benefited by a wholly arbitrary and unconstitutional action taken by DoT for grant of...licences and allocation of spectrum in 2G band...who offloaded their stakes for many thousand crores in the name of fresh infusion of equity or transfer....”

“If you look at it in cost benefit terms, there is no public loss (through spectrum allocation). The government could have made money but at a loss to the consumer. Our policy is to maximise public welfare, not to maximise revenue.”
Kapil Sibal, Union telecom minister

What the SC says “But for enlightened citizens and NGOs who have been fighting for clean governance and accountability... unsuspecting citizens... would never have known how a scarce natural resource spared by the army has been grabbed by those who enjoy money power and who manipulate the system.”

“When Kapil (Sibal) said ‘no loss to the exchequer’, he kept saying you have to compare that against the benefits. I read him as saying that in net terms, if you count the benefits, probably there wasn't a loss.”
Montek Singh Ahluwalia, Plan panel deputy chair

What the SC says “The entire approach adopted by TRAI was lopsided and contrary to decision by council of ministers, and its recommendations became a handle for then telecom minister and officers of DoT who virtually gifted away the most important national assets at throwaway prices.”

In a boxing bout, the loser receives many punches and, at times, a big knockout blow. The 2G blows have been raining down on Prime Minister Manmohan Singh and the UPA-II regime. But just when we think this is the knockout blow, members of the ruling establishment stand up, totter and stagger around, but then with a swagger say that hey, the match is not over yet and in any case the other player was the one who began cheating!
On February 2, the Supreme Court scrapped 122 2G licences issued after January 10, 2008, during A. Raja’s tenure as Union telecom minister. The two judges said these licences were granted in an “arbitrary and unconstitutional” manner. The court also said that it is up to the trial court of judge O.P. Saini to decide if home minister P. Chidambaram should be formally investigated by the CBI for his actions as Union finance minister in 2008, when the telecom scam was engineered. A. Raja has been in jail for a year now, Chidambaram in the dock for almost as long. The latest court verdict should have been the big blow that should ideally have had the regime own up to the principle of collective and moral responsibility.
Instead, we had Union telecom minister Kapil Sibal saying that the prime minister is in no way responsible, neither was the former finance minister, as “the minister (Raja) did not heed the advice of the PM and FM”. He then went on to say that “I thank the court for giving clarity on the policy we now know is flawed. We expect the BJP to apologise to the people of India for initiating this policy in 2001.” I&B minister Ambika Soni said the same thing—“it was the cabinet that met in 2001 under the NDA that took the decision to pursue this policy”. Toeing an identical line, health minister Ghulam Nabi Azad told TV cameras that “the policy began in 2001 under the NDA”.
7 Netas Who Come Through Poorly
Manmohan Singh The Prime Minister initially defended then telecom minister A. Raja despite the overwhelming evidence against him. Later, he recanted and asked Raja to resign. Singh also defended Union home minister P. Chidambaram.
Palaniappan ChidambaramAs finance minister in UPA-I, the home minister could have insisted on auctioning the 2G spectrum licences. Instead, he allowed Raja's first-come, first-serve scheme. Now, his case has been referred to the trial court by the apex court. Hearings begin on February 4.

Kapil Sibal The telecom minister’s famous statement that there was “zero loss” to the exchequer was absurd when he said it. It has become that much more ridiculous after the SC cancelled the 122 licences. Also his argument that the government was only following the licensing policies decided by the previous NDA government didn't have too many takers.
Salman Khurshid The law minister tried to downplay the finance ministry note sent to the PMO which pointed out that the scam would not have happened had the then finance minister insisted on auctioning the spectrum. He also famously gave Essar a clean chit in the Loop case. Now the CBI has filed charges against the company honchos.

A. Raja His role as the prime mover in the scam has been well-documented. Through his first-come, first-serve policy, he favoured select telecom players. His case has been completely weakened by the apex court’s February 2 verdict. Ironically, the judgement came on the day Raja completed one year in Tihar jail.
Kanimozhi The DMK MP was a director of Kalaignar TV and held 22 per cent stake in the company. The channel received Rs 200 crore of the spectrum money indirectly. Kanimozhi was arrested and lodged in Tihar for over six months before being granted bail.

Dayanidhi Maran In 2006, as the then telecom minister, he did not clear the spectrum licence for Aircel till the company sold stake to Maxis—a Singapore company close to Maran. He had to resign from UPA-II in July 2011 as textiles minister after the CBI decided to investigate the scam.
Really a case of the pot calling the kettle black, as the UPA has had over eight years to reverse the decision to allot spectrum on a first-come, first-serve basis (rather than go for auction) taken by the NDA regime. Instead, a bad policy was allowed to become a stinking pool of corruption by the arbitrary process that Raja followed, with the obvious aim of benefiting a few companies at the cost of huge losses to the exchequer. As far as the UPA managers are concerned, the blame should stop at Raja’s doorstep as the others knew nothing.

Supreme justice 2G judge A.K. Ganguly at his farewell function. (Photograph by Tribhuvan Tiwari)
For the PM, it’s still water off the duck’s back. He has long taken the stance of someone who sees no evil, hears no evil. As a member of the cabinet says—“the preferred approach is to ignore the problem and hope it will go away and not take any dramatic step on grounds of the judicial process being under way”. On the day the court verdict came, the PM made a speech on the National Rural Employment Guarantee Act (NREGA), and tweets from the PMO quoted him as saying that if NREGA was made more responsive, it could be a model for overall development in the country. As a veteran Congress leader says, “The PM prefers to remain oblivious. It’s the only way he can continue.”


On the day the court gave its verdict, Manmohan Singh was making speeches on NREGA as a model for development!

But the apparent nonchalance is misleading. After the latest Supreme Court ruling, the possibility of the noose tightening has increased. What will happen if the trial court gives CBI the permission to investigate Chidambaram? In that case, how long can the PM hide from the principle of collective responsibility? Political scientist Zoya Hasan says that “the problem has been with both the policy and the process of allotting 2G. It exposes the crony capitalist model that this regime follows. The government has been in a quicksand, defending the indefensible. Now that the court has exposed them, the PM will have to take some moral responsibility, although I would not agree with the argument that the entire cabinet should resign. The BJP may be morally indignant yet they too must shoulder some of the responsibility for the 2G fiasco.”
Yet, the real crime was committed under Manmohan Singh’s watch. Ever since the scandal blew sky high in October 2010, however, the regime in Delhi has acquired the traits of a rubber band that stretches and shows great elasticity but is yet to snap. Everyone’s waiting and bets are now on as to whether this government will survive the budget session. The Manmohan regime may be too much of a liability for regional parties to carry the burden for much longer. And the exit of one ally could undo the entire structure. Mamata Banerjee has been straining at the leash, nixing legislation and policy initiatives. She is believed to be looking for an exit route from UPA-II.
The contingency plan has the Samajwadi Party with 22 MPs bailing out the UPA during the budget session in case Mamata leaves them in the lurch. But all this is based on the calculation that the Congress will help the SP form a government in Uttar Pradesh. With the verdict having come in the middle of a critical election campaign, it will certainly take the sting out of the Congress bluster against Mayawati’s corruption (see Advantage Behenji?). Moreover, the entire Congress strategy is built on the personality of Rahul Gandhi and cashing in on the desire for change. They were always on a slippery slope in UP, without a proven base or grassroots structures, and the Supreme Court verdict will inevitably lower morale in urban constituencies where the Congress has been hoping for upper-caste support. Although the UP elections are being fought on local issues, such a debate will impact on a national party hoping to build a positive mood in its favour. As a Congress leader says, “This verdict is excellently timed to trip us.”
So what can the Congress do now? Sources in the party say that Chidambaram himself has been told not to put in his papers till there is no way out, primarily because there is no alternative to Manmohan right now. Sonia Gandhi was in poor health last year and Rahul is yet to show any inclination for public office. As things stand, the UPA has to cross the hurdle of getting the budget passed after the assembly poll results in March. It’s touch and go. Right now, the Congress also does not have the numbers in the electoral college that chooses the president. Pratibha Patil’s term ends in July this year. The possibility of Manmohan, Speaker Meira Kumar or even Pranab Mukherjee being elevated to the post is very remote. The Congress would have to go along with a consensus candidate, and the most likely possibility remains that of vice president Hamid Ansari being backed by many parties because he would be seen as a symbol of the minority community as well as someone who also has support of the Left.
To save itself from multiplying embarrassments, the Manmohan Singh regime should perhaps have acted on moral principles and cancelled the 2G spectrum licences when the scandal blew up in 2010. It could have at least tried to appear to be doing the right thing, even in belated earnest. The prime minister could also have publicly offered to resign for allowing such a scandal to take place under his nose. Perhaps the resignation would not have been accepted. But his image would have been enhanced.

What Could Happen Next...
  • Best-case scenario The trial court spares home minister P. Chidambaram from being investigated. Congress claims a moral victory, government limps along hoping for a good showing in the Uttar Pradesh assembly elections.
  • Worst-case scenario I Court allows CBI to probe Chidambaram’s role. Resignation calls lead to loss of face for UPA. Congress does badly in UP, runs out of support. UPA collapses under its own weight. Fresh elections.
  • Worst-case scenario II Chidambaram under the scanner, heat rises towards Prime Minister’s Office, making Manmohan Singh’s position untenable. Will Congress find a replacement? Will other parties step in to help UPA avert polls?
  • Post-budget scenario If government survives, Congress and its allies do reasonably well in UP but are still left scurrying around for numbers for the next big test ahead of UPA: Presidential elections due in July.
Post Script: February 4, 13:34 PM: And the Congress's best-case scenario has come true with the trial court dismissing Mr Subramanian Swamy's petition against Mr P. Chidambaram.

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