Tuesday, April 03, 2012

India's Gen. V.K. Singh alleges massive bribery scheme

Indian army chief's whistleblower turn looks more like fragging.

GlobalPost (April 3, 2012)

By Jason Overdorf--NEW DELHI

As the world's arms suppliers trickled into New Delhi for India's largest ever weapons trade show last week, the country's army chief delivered a bombshell of his own, claiming that he was offered a massive bribe on behalf of a Czech vehicle maker soon after taking office in 2010.

Gen. V.K. Singh, who is set to retire in a few months after taking the defense ministry to court in a failed attempt to prove he was a year younger than the army records showed, clearly timed his supposed revelation for when it could do the most damage.

The fear of such corruption allegations is notorious for derailing Indian defense purchases, and experts say these new charges will hardly initiate a new golden era of transparency and efficiency.

“These allegations will only make the Indian defense bureaucracy more risk-averse and Indian procurement plans will once again suffer,” said Harsh V. Pant, professor in the department of defense studies at King's College, London.

But in the short-term, the general's unorthodox whistleblowing appears to have gotten results. The Central Bureau of Investigation (CBI) on Monday requested government permission to investigate the officer who the army chief accused of attempting to bribe him. And the defense minister granted “in-principle approval” to the army's long-delayed five and 15 year procurement plans.

Nevertheless, questions remain whether the army chief did more damage than good with his supposed revelations – by widening an existing rift between and military and the defense ministry and (perhaps) exposing the country's military weaknesses to its enemies.

“For India to break through the procurement logjam will require more than a general with credibility problems [due to his failed suit against the defense ministry] calling out the government,” said the Brookings Institute's Sunil Dasgupta, co-author of "Arming Without Aiming: India's Military Modernization."

Last week, Gen. Singh claimed that he was offered $2.8 million to approve a shipment of 600 substandard trucks from Tatra Sipox (UK), for which India ultimately paid double the going rate in Eastern Europe, according to press reports.

Days later, as if to counteract any negative impact on India's enthusiasm for arms purchases, a letter the general wrote to the prime minister revealing the sad state of India's military was leaked to the media.

Not only are the troops fighting with outdated gear, they are also running out of bullets thanks to bureaucratic sloth, the general wrote in the letter. India's air force is “97 percent obsolete,” the general claimed, while the army is in an “alarming” state and the tank battalions are running out of ammunition.

“Clearly, the leak is meant to be incendiary,” said Dasgupta. "Many of Singh's complaints are probably correct, but it is predicated on his view of threats to India. Not the views of the political leadership."

As Brajesh Mishra, a former Indian national security adviser, phrased it in an interview with the Indian Express, the general appeared to have gone “berserk” after losing his court case, and was now firing in all directions. But for insiders, including Mishra, the general's supposed revelations could hardly have come as a shock.

India has struggled to equip, much less modernize, its forces ever since the so-called Bofors scandal of the 1980s — in which then-prime minister Rajiv Gandhi and other prominent politicans were accused of taking kickbacks from Swedish weapons maker Bofors AB in exchange for selecting the company's 155 mm field howitzer.

Though those charges were never proven, the scandal was so toxic that India has failed to induct a single new artillery weapon for the past 25 years, despite emerging recently as the world's largest importer of other armaments. Indeed, a tender for a program to develop an Indian-made artillery gun was canceled three times — in 2007, 2009 and 2010 — simply because Bofors emerged as the winning bidder, according to India's Sunday Guardian newspaper.

“All the talk of India as a rising military power, especially in light of India's much touted defense modernization program, has been an exaggeration,” King's College's Pant said. “These inadequacies have been known to everyone, the military and the policy makers for a long time now.”

Already the world's largest weapons importer from 2007 to 2011, according to the Stockholm International Peace Research Institute think-tank, India plans massive military spending over the next five years to address a perceived threat from China. Apart from a nearly $20 billion contract for 126 medium multi-role combat aircraft recently awarded to France's Dassault Aviation, India plans to buy two aircraft carriers and billions of dollars worth of tanks, artillery guns and other equipment.

In that context, for American defense companies there could be a silver lining hidden in the general's step backward into the old corruption morass — even as bitter infighting continues this week.

Despite the world's best technology and experience tailor-making products in consort with the American military, US weapons makers have so far failed to capitalize on the warmer bilateral relations resulting from the 2005 Indo-US nuclear deal, according to California-based consultant Gunjan Bagla of Amritt Inc.

“If you look at who's got the good stuff, 15 of the [world's] top 20 defense contractors are American,” Bagla said. “The upside I see is that 13 of those 15 have yet to sell more than a billion dollars into India.”

Used to operating in the Washington DC beltway, US manufacturers have been slow to understand the importance of the Indian bureaucracy in decision-making.

Memories of US sanctions following India's nuclear weapons tests linger on. And though precious few in the American defense sector even remember the incident, many in India still remember the US decision to deploy the USS Enterprise to the Bay of Bengal to end an Indian naval blockade of Pakistan during the Bangladesh war of 1971.

With that uncomfortable historical legacy undermining talk of a budding “strategic partnership” and with India's cost-consciousness hitting US firms' claims of technological superiority, India's fears about bribery allegations could well become US weapons makers' biggest market advantage.

“No American company can think about violating the foreign corrupt practices act (FCPA), and no American company in defense can think about violating the international traffic in arms regulations (ITAR), so in a sense that makes it easier for American companies,” said Bagla.

“Everybody knows that's the case. FCPA and ITAR apply not just to the companies but to the individuals. If you violate the law, you go to jail, regardless what your company did.”

For gun shy Indian bureaucrats and politicians, that could turn out to be a big selling point.