MUST READ BOOK ON CORRUPTION BY Subramanian Swamy

Book review: And they scammed happily ever after

Book: 2G Spectrum Scam
Author: Subramanian Swamy
Har-Anand Publishers
304 pages
Rs595
Have you ever wondered why the prices of essential commodities are always on the rise in India? How come people in Bangladesh, Sri Lanka and Pakistan pay less for petrol and diesel, while we in India have to shell out higher fuel prices?
Even as the number of poor in the country rises with every passing day, India is flooded with luxury goods that are beyond the reach of even the upper middle class. How come the luxury goods segment of the country is doing roaring business while official figures estimate that more than half the Indian population is living in poverty?
Harvard professor of economics and former Union cabinet minister Subramanian Swamy has the answer: corruption and black money are at the root of all our woes.
This is the underlying message of his latest book 2G Spectrum Scam, which traces the genesis of the infamous scam, uncovers the role played by the various characters involved in it, and tracks how the black money generated from every scam is laundered through the hawala process.
Full spectrum loot
Incidentally, it was Swamy who first blew the whistle on the multi-billion dollar scam through his letter to Prime Minister Manmohan Singh in November 2008.
And this was much before the Comptroller and Auditor General of India came out with his report about the Rs1,76,000 crore loss to the government due to the spectrum scam.
In his letter to the PM, Swamy had provided details about the complex and illegal partnership between Swan Telecom and Anil Ambani’s ADAG Group. According to Swamy, Reliance Telecom, which is owned by Anil Ambani, managed to get spectrum allocation and licenses to operate telecom services in various circles of the country by paying exorbitant bribes to people in power.
How various businessmen walked away with telecom licenses, and how politicians, bureaucrats and industrialists colluded with one another to hoodwink the general public and amassed wealth form the content of the book.
Considered by many to be a maverick, it is worth noting that not one of Swamy’s allegations against anyone has ever proved to be false. One politician who is losing his sleep right now is none other than India’s super-articulate home minister.
Through a series of investigations and Right to Information queries, Swamy has sought to prove that Chidambaram is equally culpable in the 2G spectrum scam for a host of reasons, ranging from misinforming the PM about the pricing of the spectrum to, more damagingly, withholding key information he had received from the country’s security agencies regarding the spectrum license applications of Etisalat and Uninor.
Both Etisalat and Uninor had been blacklisted by the Intelligence Bureau and the Research and Analysis Wing for their illegal connections with Pakistan’s ISI and the Chinese PLA. Though the home ministry passed on the information to Chidambaram, suggesting that the telecom ministry should be advised against entertaining these firms, Chidambaram, the then finance minister, just slept over the file!
Swamy has devoted a section exclusively to describing the entire ‘spectrum’ business in a language that laypersons could understand. After unraveling the seemingly impenetrable jargon of GSM, CDMA, ITU, etc and the economic, social and global ramifications of spectrum allocation, Swamy moves smoothly to demystifying India’s hawala culture.
He explains how ill-gotten wealth, accumulated through bribes, is taken out of India and brought back to the country with the tacit approval of the state. The process of money laundering is explained with examples and anecdotes.
As a reporter, I have been covering Swamy’s press briefings since 1998. It was in February-March 2007 that Swamy forecast the impending telecom scam. He even spoke about the illegal telephone exchange operating out of Dayanidhi Maran’s residence. Unfortunately, no one took it seriously. Now the younger Maran is on the run.
How PNs play havoc
Another highlight of the book is the detailed description of the destructive role played by Participatory Notes (PNs) in the Indian economy. The economist in Swamy has been warning the country’s policy makers about such financial instruments, which could easily be misused to bring dirty money into the country for funding terrorist activities. What makes PNs so attractive is that operators need not furnish any details for buying and selling them.
“An Indian citizen has to furnish a hell of a lot of information for opening a simple savings bank account. But PN dealers and operators need not reveal anything, including the source of money, to the authorities. When SEBI questioned Goldman Sachs Investment for its failure to report the issuance of PNs to an undesirable company, the Securities Appellate Tribunal slapped a fine of Rs1 lakh on SEBI, the market regulator, for harassing Goldman Sachs,” writes Swamy.
The author further quotes MK Narayanan, the then national security adviser, who alerted the Union government about the manipulation of the Indian stock markets by elements using PNs. “Instances of terrorist outfits manipulating the stock markets to raise funds for their operations have been reported.
Stock exchanges in Mumbai and Chennai have on occasion reported that fictitious or notional companies were engaging in stock market operations, some of which were later traced to terrorist outfits,” said Narayanan, at a conference on security policy in Munich in February 2007. So didn’t the SEBI (Securities and Exchange Board of India) do anything about the use of PNs to manipulate the stock market? Well, Swamy points out that former SEBI chairman M Damodaran paid a heavy price for questioning the legality of PNs — he lost his job.
As for Narayanan, he remained silent on the issue after coming back to India, But there was one gentleman who made it a point to repudiate what he had said in Munich — it was none other than P Chidambaram, the then Union finance minister, who, ironically enough, would go on to become the country’s home minister.
The author poses also some inconvenient questions as he tracks the spectrum scam. “Why is India dilly-dallying over the United Nations Convention Against Corruption adopted by the General Assembly in October 2003?” asks Swamy. “Its asset recovery provision is very appealing and yet the Indian government has not yet moved to ratify the Convention.”
The book does have its shortcomings — it could have benefited from better copy editing and production values. Butit is a must read for anyone interested in understanding why no government will ever muster the ‘political will’ to act effectively against corruption — the stakes for the cabal of politicians, bureaucrats and businessmen who effectively run the country are far too high.
That’s why today we have civil society groups, with the support of the average citizen, applying pressure on the government so that the country gets an effective anti-corruption bill.