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2G scam: Ashwani Kumar orchestrated the demand to keep PM’s name out, Vinod Rai says

Author: Sagarika Ghose
Publication: The Times of India
Date: September 13, 2014
URL: http://timesofindia.indiatimes.com/india/2G-scam-Ashwani-Kumar-orchestrated-the-demand-to-keep-PMs-name-out-Vinod-Rai-says/articleshow/42388732.cms

A day after former CAG Vinod Rai targeted Manmohan Singh for having full knowledge of the 2G and coal scams, he tells TOI his isn't a personal battle against the former PM and he has written his book only because he cares about transparency and exposing wrongdoing.

Q.: You've named Manmohan Singh as complicit in the 2G and coal scams. Are you targeting him, is this a personal battle?
A.: There is no question of targeting him. For 2G and the coal case, he was the PM and the issue reached him. He was certainly in the know of things. In the 2G case all the letters written by A Raja indicated what he was planning to do and the PM, unfortunately, gave very routine replies to them.

On the coal issue, it goes to his credit that the moment the then coal secretary Parakh made it known that the screening committee procedure was leading to windfall gains, pressures and lobbying, he understood. In November 2004, he decided that coal ministry would go for market- discovery process or the auction process.

 There's no question of any personal battle. We are at two very different levels. He's been PM for 10 years. He's a dignitary, a statesman, a globally-known personality. There's no way I can take him on. Our reports are based on facts and the issues did go up to his level. He chose to take the course of action that he has taken.

Q.: Why are you speaking now? Why didn't you speak then?
A.: Of course I've taken it up. But it is neither appropriate nor ethical for a CAG to be going to the PM or any minister. The correct procedure is that we give our draft findings to the ministry concerned, they give their response. We incorporate those responses and put out a report. But I was constantly calling on the PM and President, off and on, every six months as a matter of courtesy. I did raise these issues. But when Raja wrote on December 26 saying I'll issue licences or letters of intent, instead of giving routine replies, the PM could've said please bring this to the group of ministers. The outcome would have been very different.

Q.: Are you being sensationalist just to sell your book?
A.: I am not being sensationalist. All I'm saying is exactly what came out in the public domain following our report.

Q.: Your book does not talk of any serious pressure on you. Is that correct?
A.: On the sidelines of the PAC meeting, Congress MPs tried to persuade me to keep the PM's name out. Sanjay Nirupam, Sandeep Dikshit and Ashwani Kumar told me to keep the PM's name out. There were others too. It was orchestrated first by Ashwani Kumar. He said let's keep the PM's name out of this. The other MPs were with him; they were nodding. The PAC (meet) is in the morning, then there's a lunch. During lunch, or just before, Ashwani Kumar raised it with me. The Congress MPs were in a group. Ashwani Kumar raised it. PAC included Navin Jindal and others. But the 2G report had already been tabled in Parliament. I explained I cannot keep the PM out as the report had already been tabled and there were all the Raja letters which had been replied to by PM. When you come across such concrete records in course of audit, how can you ignore them? They were not trying to pressure me to influence the report; they were making suggestions on the trends of PAC discussions. Nirupam told my deputy your report is totally apolitical; it has got no political flavour, but we will convert it into a political thing.

The other thing is they were so unfair and used unparliamentary language in the PAC against the CAG when I wasn't present. This forced the chairman, Dr Murli Manohar Joshi, to send a written complaint to the Speaker about these two gentlemen, Nirupam and Dikshit. If any corroboration is required Dr Joshi be asked and Lok Sabha secretariat records checked ... whether he lodged a written complaint or not. To the best of my knowledge, the Speaker never replied to the letter.

Q.: Are you trying to suggest that the former civil aviation minister was acting against Air India interests?
A.: Air India had a perspective plan for purchase of aircraft. That plan was discussed within by the AI management over some years. It was presented to the ministry on August 2, 2004. At that meeting, the minister suggested that AI should look for a longer-term perspective and there should be non-stop flights to the US and Canada. Based on this, the then CMD of AI said this means purchase of 28 aircraft and he'd come back with a supplementary proposal. He was advised 'no, we have to go through procedures for purchase (and take it) to the finance ministry...please return with a consolidated proposal'.

 Our argument in the report is very technical. The AI management should've had the commercial intention to work out these details themselves rather than have the ministry or a secretary point it out to them. When we pointed this out, the CMD said okay let me come back. But he was sent back because the (civil aviation) ministry said no. Jitendra Bhargava (former AI director) has also written about this.

 Praful Patel was giving a definitive indication that come back with a far more comprehensive proposal, which was interpreted by the finance ministry to say that it was a supply-driven proposal. Audit did not point it out. The finance ministry pointed it out. It said the minister's proposal was not convincing and appeared to be supply driven. This means purchase a large number of aircraft and automatically AI will get employability for these aircraft. AI's share of all flights in those days in the country was 19%. Proposal to purchase planes would push up the proportion to 30%. This hadn't been done for the last several years. There was no roadmap for the upcoming period. So, the finance ministry was forced to say this was a supply-driven proposal, the logic being: Buy more aircraft; everything will automatically take care of itself.

 Everybody was aware that such a purchase would create a financial crisis for AI. When any purchase has a debt proportion of 97%, there's no way it can be commercially profitable. Within 5 years of the 777s purchased by AI, they had to be sold to Etihad, 5 for the price of 1.We bought one aircraft at one price and sold it at one fifth of that price.

Q.: You say the KG Basin gas deal with Reliance was not transparent?
A.: I'm not suggesting it was non-transparent; I go a step further. The contract was skewed in favour of the private party, to the advantage of the private party. More importantly, we recommended that as and when periodicity of the tenure contract was to expire, the contract and principle should be reviewed. The government set up a high-level committee, chaired by Ashok Chawla, then finance secretary, who came up with a strong recommendation that the formula was skewed against the government. There was also a recommendation by the Rangarajan Committee, the PM's economic advisory committee, which also faulted this production-sharing contract. The government then set up the Kelkar Committee which is still in process. It's not as if we were the sole people faulting the production-sharing contract.

 We had not gone into pricing which was $4.2. We said that price cannot be changed during the tenure of the contractual arrangement. Regarding high capital cost, higher the front loading, bigger the operator's advantage. Much before we did the audit - the government advised us to - many concerns were expressed in Parliament and media that there was "gold plating", which means hiking up the capital expenditure.

Q.: Kapil Sibal called your figure of Rs 1.76 lakh crore as 2G loss absurd and said there was zero loss. Your reaction
A.: I never reacted to that. Because our report focused on three issues: 1) A Raja didn't follow procedures which had been laid down on - what's called the "first-come, first-served" policy; 2) He shifted the timeline; and 3) The computation of the loss. At his press conference, Sibal said he agrees with CAG on the first two points, but the third was exaggerated. Our report says that there was a loss to the national exchequer cannot be denied. Quantum can be debated. We gave four models on which the quantum could be. The government's own agency, CBI, said the loss was Rs 30,000 crore.

Q.: But was this a presumptive loss or a real loss?
A.: People haven't understood the significance of the word "presumptive". Presumptive doesn't mean presumptuous. It means presuming a higher degree of certainness. The word is used legally and financially. It's used in the government's direct tax code. There it's presumptive gain and presumptive income. When we're giving four models of the quantum of loss, we've to call it presumptive loss. That is, if you had followed this pattern, this would've happened. The Rs 1.76 lakh crore is simply a comparison of what the government got during auction in 2010 and what it got in 2008. It is the practice of auditors worldwide to suggest optimality of policies, and in case there are revenue losses, to quantify them.

Q.: Were you straying into policy making when your duty was simply that of an accountant?
A.: In the first page of the 2G report we said policy formulation is the sole prerogative of the government. We don't go into that domain. We didn't suggest auction for 2G or coal blocks. Before our report came out, government had switched to auction. Where was the question of straying into policy formulation? We never said auction.

Q.: But you set up an adversarial relationship with the government?
A.: By definition the auditor is contrarian. Whether in government or in the private sector, audit takes a contrarian stand. The government could've said we agree with some things pointed out by CAG but we don't agree with some and we'll take them to PAC. Unfortunately, the government went to the media and criticized us in public which was uncalled for. We were taken by surprise. CAG reports do point out issues that are unpalatable. The finance minister himself said it is the CAG's duty to point out lacunae in government functioning. We didn't want an adversarial relationship with the government but UPA mishandled a very routine situation.

Q.: There were suggestions that you were close to BJP leaders and they encouraged you to take on the UPA government?
A.: Where was the question of being close to anyone? Obviously, I have to talk to the PAC chairman who happens to be a leader of an opposition party. I was in constant touch with the PAC chairman. The CAG sits to the right of the PAC chairman. Where was the political agenda? Take on the CAG on facts, don't level personal allegations.

 I don't know Dr Joshi from Adam. He taught at Allahabad University. I was from Delhi University. I first met him during the 2G report. I haven't met him since I demitted office. My 35-year-long career in the civil service speaks for itself. It's in very poor taste to say I had a political agenda. I've dealt with Congress governments, with Marxist governments. My career is an open book.

Q.: Do you have any regrets, anything you would have done differently?
A.: Nothing at all, we proceeded by deliberation, we are absolutely sure of the facts. Credit must go to the audit and accounts department. It has robust procedures and a very apolitical approach. It has professionally sound officers.

Q.: But aren't the CAG and judiciary sometimes guilty of overreach?
A.: There are three wings - legislature, judiciary and executive. If one doesn't perform automatically the others gets in. There's no question of overreach ...The public has appreciated that judiciary stepped in because there was wrongdoing, and of a substantial nature.

Q.: Should bureaucrats, privy to privileged information, put it all out in the public domain? Isn't it a moral dilemma?
A.: This dilemma is always bothering people. As far as my book is concerned, I have not infringed on anyone's privacy. I know far more than I have revealed. I was privy to many other professional conversations which I have not revealed, I've chosen not to. I've not said anything not known in public domain. Time has come when bureaucrats must function more transparently and take the public into confidence.

Q.: Do you see yourself as an anti-corruption hero?
A.: No question of that. If I did, I'd be holding press conferences all the time. I had the good fortune to lead a team of professionals, we have all learnt a lot about governance structures of the country.

Q.: Are you the T N Seshan of the CAG?
A.: I'd never compare myself with Seshan. The media was very supportive of us. It was exceedingly aware and independent. I must give credit to the media.

Q.: Any chance of a political career? Reports were that you were going to be an AAP candidate...
A.: Have any of these rumours come true? Are any of these reports being borne out — first I am close to BJP, then I will be an AAP candidate? Let's not get carried away by loose talk.

Right, Mr Rai. All the best to you.
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