Indian legal system needs to be overhauled Getting back to 2G, as a telecom entrepreneur, . 'This is not a scam. It's a crime. Punish the guilty. Get back the money'

Indian legal system needs to be overhauled to tackle corporate crime. Cr. Pc.  is only geared to look at individuals who commit petty or violent crimes. Forced bonhomie Manmohan Singh and A Raja play the role of coalition partners. There is no credibility left in any institution to handle such crimes.

Getting back to 2G, as a telecom entrepreneur, . 'This is not a scam. It's a crime. Punish the guilty. Get back the money'

 you sensed the murkiness way back. the Rs. 1.76 lakh crore telecom scam..Unless Indian consumers of news train themselves to pay for truth-telling, WHY POLITICIANS OF DIFFERENT POLITICAL PARTES HAVE NOT RESTORED THE POWER OF CHECK AND BALANCE UPON office of C& AG which was constituted under the scheme of the constitution of India to provide the restraint to the expenditure disproportionate from its own discretion by the relevant ministries was brought under the ministry of Finance and thereby giving the unbridle powers to the ministers and thereby overthrowing the constitutional mandate securing the safeguard over the whimsical expenditure. According to the legal opinion of the constitutional experts, the diversification of the financial powers to be utilised by the sole discretion of the bureaucrats without taking into consideration the Audit objections, which could have been made under the original constitutional scheme, was directly resulting into the notion of conferring the absolute power to the respective ministry. This was against the democratic, federal and republic set-up of our Constitution. The aforesaid concept of the parliamentarian democracy, providing the fraternity to an individual in preamble of the constitution, was an attack on its basic structure.  

Extravagance of Public Finance vis-à-vis curbing the power and duties of C&AG.
The constitution of India provides that the Comptroller and Auditor General of India shall be appointed by the President by warrant under his hand and seal who shall not be removed from Office, except in the like manner and on the like grounds as a Judge of Supreme Court. The term of appointment shall be for a period of 5 years and the condition of service and salary of the Comptroller and Auditor General of India shall be such as may be determined by Parliament by Law and until they are so determined, shall be as specified in the second schedule of the constitution. The Comptroller and Auditor General shall perform such duties and exercise such powers in relation to the accounts of the union and of the states and of any other authority or body as may be prescribed or under any law made by Parliament. The report of the Comptroller and Auditor General relating to the accounts so maintained of the union shall be submitted to the President who shall cause them to be laid before each house of Parliament . The report relating to the accounts of the states shall be submitted to the Governor who shall cause them to be laid before the legislature of the states. That the present accounting system applicable to most Ministries and departments in essentially external to Financial management function in that the payment made by the treasuries and accounts are compiled by audit and accounts offices under the control of the Comptroller and Auditor General on the basis of initial and subsidiary accounts received by them from the treasuries. This system worked fairly well when Governmental business was limited. With the increase ion the volume and variety of Governmental business and the continual set-up of developmental outlays, this system has proved inadequate to the administration task.
The scheme of separation of accounts from audit was to be implemented in selective ministries e.g communication, civil aviation, tourism, industries and civil supplies w.e.f April 1976, where the expansion regarding the expenditures and its audit was felt to be providing certain constraint and thereby resulting into the delay in implementation of the schemes at the relevant time. However by the gradual increase of the power with these ministries, the similar laxity in relation to the procedural safeguard was further provided the other ministries resulting into the defeat of the very purposes for which the office of the Comptroller and Auditor General was given the power through checks and balances. The effect of the aforesaid process has resulted in the departmentalisation of union accounts enacted in 1976 and the transfer of personnel was given effect by the enforcement of the Act no 59 of 1976 from Indian Audit and Accounts departments which was earlier under the control of C.& AG to the newly formed department of Civil Accounts under the Controller General of Accounts under department of Expenditure ministry of Finance. In this manner the office of C& AG which was constituted under the scheme of the constitution of India to provide the restraint to the expenditure disproportionate from its own discretion by the relevant ministries was brought under the ministry of Finance and thereby giving the unbridle powers to the ministers and thereby overthrowing the constitutional mandate securing the safeguard over the whimsical expenditure. According to the legal opinion of the constitutional experts, the diversification of the financial powers to be utilised by the sole discretion of the bureaucrats without taking into consideration the Audit objections, which could have been made under the original constitutional scheme, was directly resulting into the notion of conferring the absolute power to the respective ministry. This was against the democratic, federal and republic set-up of our Constitution. The aforesaid concept of the parliamentarian democracy, providing the fraternity to an individual in preamble of the constitution, was an attack on its basic structure. This has led to an inadequate financial control which would have been benefited to the nation if such power were remained with C&AG in India
That it would be relevant to point out that the office of the Auditor General of India was created under the Government Of India Act 1935 for exercising the control over expenditure incurred by Central And State Governments and for proper accounting thereof in such forms and in such manner as may be prescribed by him and he was also responsible for rendering a complied account of receipt and expenditure to the Centre and State Governments and he was also required to submit report on the result of Audit in his Audit report to the Governor- General and the Governor of the States for laying it before respective legislatures . That after coming over the constitution of India the Auditor General was designated as Comptroller Audit General of India under chapter V of the constitution.

They will always be hostaged to advertisers and vested corporate interests. Tricky tie-ups Mukesh Ambani and Ratan Tata helped Radia succeed while Dayanidhi Maran was on the wrong side and Praful Patel an enemy

Niira Radia, daughter of Iqbal Memon, and her vaulting ambition for high-finance deals

The CBI is also probing what it calls her nexus with a slew of former bureaucrats whose brains she picked to bend rules to the benefit of her clients. These included conglomerates like the Tatas, Reliance, ITC and Mahindras, and big-bucks entities like Lavasa, Star TV, Unitech, Elder Health Care, Haldia Petrochemicals, Emami and the HIV/AIDS initiative of the Bill and Melinda Gates Foundation.

This week, one of her confidants, Pradip Baijal, the former telecom and disinvestment secretary who started the country’s much-hyped disinvestment process, was questioned by the CBI for over four hours for his alleged investments in African nations like Guinea and Senegal.

“The charges are serious,” admits ED’s Rajeshwar Singh, refusing to reveal details. CBI and ED officials told TEHELKA that there is enough evidence to prove Radia’s links with retired bureaucrats like Ajay Dua, former secretary, Department of Industrial Policy and Promotion (DIPP), CM Vasudev, former finance secretary, SK Narula, former Airports Authority of India chairman, and Akbar Jung, the former civil aviation secretary.

Tricky tie-ups Mukesh Ambani and Ratan Tata helped Radia succeed while Dayanidhi Maran was on the wrong side and Praful Patel an enemy

The IT investigations revealed that apart from managing the telecom licences for builder Unitech, among others, Radia also handled and facilitated cross-border transfer of funds. Intercepted conversations between Radia and the allottees of the new telecom licences suggest that she was a key adviser in staggering the inflow of funds from outside India so that no impression could be created that there was a windfall gain to the companies.

The biggest missing link in Radia’s operation was a full-fledged “think tank” that would take her to the big league of reasoned lobbying. Former AAI CMD Narula, who was parked in Radia’s Magic Air hangar, came handy in building inroads to top-level bureaucrats, who in their mid- 50s start looking for post-retirement opportunities with corporate India.

Despite Radia’s magic not working on former AAI executive director Gurcharan Bhatura, Narula is believed to have been the key man in getting two high-profile bureaucrats in Radia’s corner.

Poles apart, the controversial Baijal and the low-profile Vasudev, the former DIPP (Department of Industrial Policy and Promotion) secretary, were good cornerstones of Radia’s dreams of managing the bureaucracy. Rewarding Narula for having stuck around — he was also the non-executive chairmanship of Magic Air — Radia floated Neosys with Baijal, Vasudev and Narula as partners. In no time, a couple of Chinese companies including telecom major Huawei were being advised by Radia’s company.

THE SUDDEN rise of Radia, her frequent visits to Singapore and the prospective investors from West Asia and the Asia-Pacific raised many an eyebrow. Reportedly, some of the large cash transactions were found to be routed through a code name resembling hers.

With India’s two largest industrialists as her clients, earning her a rumoured Rs. 100 crore per annum, Niira left every established player behind

At the same time, her unhindered growth surprised many. Windfall gains came from managing a massive Reliance Industries Ltd (RIL) public relations mandate from Mukesh Ambani, India’s richest man. Radia formed Neucom to manage the RIL account. With India’s two largest industrialists in her fold, earning her a rumoured Rs 100 crore per annum, Radia left every established player far behind within six years of setting up shop.

Like some other public relations firms based in Delhi, Radia too branched out from working with corporates to doing PR for state governments. She worked closely with Telugu Desam Party (TDP) chief Chandrababu Naidu and Gujarat Chief Minister Narendra Modi. Naidu hired Radia for “strategic PR counsel” for Andhra Pradesh during his last stint while it is rumoured that she was instrumental in getting Tata’s Nano project out of a volatile Bengal and into Gujarat.

If the spectrum scam weren’t so big, with its potential to swallow many careers, one would say that this savvy survivor has enough fire in her belly to keep going. But the business she is in requires the confidence of both politicians and corporates and they’re in it for money, not love. Besides, it doesn’t pay to work with someone whose image is sullied.

LESS THAN three years after it was incorporated, Swan Telecom Pvt Ltd made a windfall gain, selling a 45 percent stake to Dubai-based Emirates Telecommunications Corporation PJSC, which operates under the Etisalat brand, for over Rs. 4,000 crore. In the intervening three years, former telecommunications minister A Raja and corporate lobbyist Niira Radia joined hands to bend rules, defy recommendations of the regulator and the Ministry of Finance to allot licences in 15 telecom circles to Swan Telecom, Unitech Wireless, Datacom and Aircel, according to a top-secret document in  possession prepared by the Income Tax Department, based on telephone intercepts.

“The conversation seems to suggest that the Minister Shri Raja and Mrs Radia too have equity interests in Swan and her associates as to be put on the board,” the documents said without elaborating. The licences were sold to Swan and five other companies, including Unitech Wireless, on a “first come, first served” basis in 2008 at a valuation decided in 2001, disregarding the urging of the telecom regulator to auction the licences to the highest bidder. On scrutiny, the government auditor found Swan and some of the other companies that were allotted licences had suppressed facts or given misleading information.

“None of the companies had the minimum paid-up capital required to apply for a Universal Access Service (UAS) licence,” the nation’s auditor said in a report submitted to Parliament on 16 November. “The fact that the Department of Telecommunications could not confirm the correctness of the documents supplied by the applicant companies suggested that process of verification of applications before grant of bulk UAS licences in January 2008 was weak.”

Investigators are also probing the ownership of Genex Exim Ventures, which acquired shares worth Rs. 380 crore in Swan Telecom two months after the obscure company was incorporated with a paid-up capital of only Rs. 1 lakh. Genex holds a 5.27 percent stake in Etisalat DB, the new name of Swan Telecom. The remaining stake is held by Mumbai-based Dynamix Balwas Group that has interests in telecom, hospitality and real estate.

An inspection of the shareholding of Swan Telecom also revealed that at the time of applying for licences, Reliance Communications Ltd owned a 10.7 per cent stake in Swan, according to the government auditor.

“Since Reliance Communications was operating in all the service areas for which Swan had applied for licences, their application was not in conformity with clause 8 of the licence guidelines, and hence was not eligible to be considered,” it said. 'This is not a scam. It's a crime. Punish the guilty. Get back the money'

Corporate crime has begun to risk democracy itself. Rajya Sabha MP and former FICCI president Rajeev Chandrasekhar tells that the Indian legal system needs to be overhauled to tackle corporate crime

Rajeev Chandrasekhar, 46, first began writing to the prime minister in 2007 warning him about the impending 2G scam. As a former telecom entrepreneur and a member of the Parliamentary Standing Committee on Information Technology, he was uniquely placed to know what was going on but the PMO did nothing. In a season of bewildering corruption, Niira Radia and A Raja are just symptoms of a staggering new phenomenon in India — corporate crime at an enormous scale. Crimes such as the 2G spectrum scam, two times the size of India’s health budget, and the unfolding LIC scam shed no blood but bleed millions. How can we get our money back? How can we hold the powerful to account? How do we read the new landscape? Chandrasekhar has some urgent solutions: a new legal system for corporate crime; mandatory disclosure of transactions that involve a private-public partnership, national resources or tax-payers’ money. Excerpts: Rajeev, you wrote repeatedly to the prime minister from 2007 onwards forewarning him about the impending 2G scam; then later suggesting ways to rectify it. How did the PM respond?

It was a standard response from the PMO. He replied like he usually does. Thank you for your letter. We will look into it.

But you were on the Standing Committee on Information Technology, which included telecom. Did you all never meet? Were there no alarm signals going out from the others?

We did meet. But the Standing Committees are a part of the whole problem. They spend extraordinary amounts of time on issues like the land use of post offices and the quality of BSNL services but not on the fundamental question of oversight of the executive. Take the review of spectrum allocation for example. There is nothing in the system at present that can oversee the working of an independent regulator like TRAI. The only body that can do that is Parliament. And Parliament does it through Standing Committees. But if you look at the percentage of time these committees spend in doing that job, it will be a minuscule fraction. We don’t understand our priorities. We spend hours on completely irrelevant issues.

But why is that? Is it because these committees don’t have experts? Should they have civil society members?

We just need to be willing to put in hard work because it is hard work. It may be controversial for me to say this but the problem is when the Standing Committees meet to decide on the issues they will examine over the next 12 months, it all becomes about planning their trips, travel expenses and sightseeing — euphemistically called learning experiences. This is unfortunate because Parliament is the only body that can ask questions to the regulator. You and I, as individual citizens, have no locus or authority to challenge a regulator’s policy decision. The only way we can do it is to ask questions either directly in Parliament or indirectly through Standing Committees. So this oversight of Parliament on the Executive needs closer examination because the 2G scam has proved that corporates are capturing public policy.

Again, is there a problem with the composition of these committees? How do we fix things?

One of the ways to make sure this doesn’t become a cosy meeting place and functions as an effective arm of Parliament is to ensure that the transcripts of committee meetings are available to the public — both video and text. I have gone to the extent of saying these meetings should be open to the public. In the UK, for example, when the Chairman of the Reserve Bank deposes to Parliament, people can sit in the gallery and listen. In the US too, depositions like in the Texas Oil Spill are public. I had written to all parties proposing this. Only the Left supported it. Two national parties opposed it saying if you televise Standing Committee meetings, there will be too much grand standing and they will become partisan. But, at the very least, we need to make the transcripts public so people can scrutinise and understand the functioning of the committees.

Getting back to 2G, as a telecom entrepreneur, you sensed the murkiness way back. Can you talk about your own experience?

I entered telecom in 1991 with considerable idealism. It was Rajesh Pilot who bought me back from the US. There was this drive to do a lot of new things for India. You enter with that kind of thought then you run slap-bang into real India, which was Sukh Ram and the WLN scam. My company went bankrupt in 2001 and I saw first-hand how banks could be told by the government to either aid or cut off funding at the behest of a politician or corporate rival. It was obvious that public policy and institutions could be captured to benefit some and destroy others.

For all the hoopla around entrepreneurship, my own experience has been that you can be clever and hardworking but in India it takes very little to destroy someone’s business and make another’s bloom. I sold off in 2005 because, as I said on record, I’d been in telecom for 10 years and the only remaining challenge was lobbying for free spectrum. I was neither interested nor good at that.

In 2006, I got an opportunity of getting into politics. I didn’t have grand hopes of fixing the system but one of my main motivations was my desire to reverse the dysfunctionality and scams in the telecom sector. That explains my extraordinary letter-writing on the subject. So when this scam was developing, I wrote to all party leaders in 2007 asking them to support a discussion on this in Parliament. It wasn’t a fully cooked scam yet. I tried explaining it to whoever was interested. A few people in politics and media understood. But if you ask me why it’s taken so long for everyone to react to this, I’d say most of us didn’t get it.

Economic scams of today aren’t straightforward. It’s not about one person bribing another to get a pot of gold. It’s about fixing a contract and the underlying fine print of that and the value that accrues to you from that. It’s not boxes of cash anymore. It’s about contracts and deals.

We’ll come back to this larger issue of white-collar crime. For now, Raja’s been sacked. But how do we get the money back? How do we fix corporate culpability? And can it be fixed?

There are two basic minimum things people have to do when they take an oath of ministership. First, they have to make good the losses to the exchequer. If Raja or Niira Radia want to sign a cheque, they can do it, but the losses must be made up. Second, the CAG has confirmed a crime has been committed, so the perpetrators have to be punished. This is not an academic moral issue. It is about rule of law and sufficient checks and balances against creating a culture of kleptocracy. We have to make sure this kind of a scam does not happen every few years; or that every new minister, bureaucrat and businessman doesn’t create opportunities to make a killing.

For a layperson, the obvious option seems to be to cancel the licences and re-auction them. Is there any hitch with this?

Yes, that is the way. You have to think like a layperson. I don’t think it should be allowed to enter the sophisticated realm of legality. We should keep it simple. Take back the licences or get back the money. Actually there are three types of companies involved in this now. One is the existing operators like Airtel, Vodafone, Idea, Tatas and Reliance Comm who got extra spectrum. Then there are the new companies like Unitech and Swan who got spectrum and sold it off. Third are the companies who got spectrum but are sitting on it and not rolling out services. These three have to be tackled separately. The first guys have to be told you got the additional spectrum illegally not the licences, so you pay a fine of Rs. 3,000 crore each and keep the spectrum or surrender it.

With the second group, there are two problems. Those who sold off their spectrum should be asked to pay a retrospective windfall capital gains tax. The government should claim a 95 percent tax on it. As for the guys who bought these licences from the original buyers, they have to be told that either their licences will be taken back or they should pay massive penalties in the range of Rs.3,000-Rs. 5,000 crore each.

The third guys who’ve taken spectrum but are doing nothing with it should be told to forfeit the money they paid and the spectrum should be taken back. Through all this, there is one basic theme: we believe you have done wrong and we will make the penalty painful, not just a small rap on the back. What’s disturbing is that Kapil Sibal (who has taken over from A Raja) is already pushing this into an arcane realm of legalese. I can tell you his arguments for this right now. He is thinking if we cancel licences, both investors and consumers will be upset. Neither of these concerns is valid. To say investors will be upset is to say that a criminal will be upset for being put behind bars for a crime.

The fact is nothing is going to happen to investors if we take a strong stand on this. They will continue to invest. The simple stand should be if you do anything against the laws of India, you have to pay for it. The government can’t give an assurance that we shield you from being conned. In China, these companies would have been kicked out. Tax payers can’t be held responsible for the bad investment decisions of companies.

Absolutely! Protecting “investment climate” has become a ploy for dishing out favourable treatment to corporates that might be detrimental to India. I was appalled with Ratan Tata’s offer to clean up the Bhopal gas tragedy site, contingent on Dow Chemicals being let off its liability for Union Carbide in India. Dow has paid for UC liabilities in the US; why not in India? There was a flurry of letters in government worrying that holding Dow responsible would jeopardise their promised investments. That’s just one example.

Rolling out the red carpet is fine but rolling over and playing dead is not. India is a nation with a critical mass where companies want to invest money. You have to deal with corporations from a point of strength. We still haven’t learned how to attract investment with national interest in mind.

When UPA 2 was formed, I remember a quote from Shekhar Gupta where he said that “one of the big differences between UPA 1 and UPA 2 will be that CII and FICCI won’t dictate policy making.” I thought this is really heartening — here is a journalist who is pro-establishment who is saying this. But it has not worked out that way. Basically the problem is that too many businessmen are sitting around the government telling them what is good for the public. That ends up sacrificing public interest for business. Of course, business and entrepreneurship is good for India and the government should help the business community. But primarily, government policy should be about citizens’ interest. It can’t be the other way around.

You’re a businessman yourself. How do we break the damaging conflict of interest arising out of CEOs sitting on committees and legislating or advising policy decision on areas they will be doing business in — be it agri, pharma, aviation…

I agree with you. If Vijay Mallya is put on a civil aviation committee, it’s wrong and distasteful. But the number of businessmen in Parliament trying to influence policy is still limited. What is really criminal and absolutely unacceptable though is influence like Niira Radia’s and what goes on behind the scenes as the tapes have shown. You have a CII director general (Tarun Das) asking for five acres of land in exchange for...

But are just fines enough? Bernie Madoff is serving 150 years in jail. Satyam’s Ramalinga Raju was arrested. Given the sheer scale of this scam, is there a case for not just arresting Raja but all those who illegally got the spectrum?

We might instinctively want to put the crooks in jail. But the problem is we must also have some semblance of the rule of law and due process. What we don’t want to do is go witch-hunting and just arrest all those who have done wrong because of the absence of a system for proceeding against white-collar crimes. There is a real need now to overhaul and create a separate legislation for white-collar crimes.

‘The government is asking us to celebrate 9 percent growth rate — an economic model whose inside story is about robber barons and crony capitalism’

The Indian Criminal Procedure Code (CrPc) is only geared to look at individuals who commit petty or violent crimes. In today’s world, the much bigger crimes are those that are sophisticated and have silent victims. You and I and other tax payers never feel there has been a real crime against us — these are victimless crimes in that sense. Victims of white-collar crimes need a special dispensation. Our criminal code and public prosecution system is inadequate to prosecute this. The proof is Raju and how he is running around despite being charged under the CrPc.

The second urgent need is to introduce legislation that will reform the business chambers and lobbies. They are operating in an area where there are absolutely no laws. FICCI can give cock-and-bull stories to the government and get policies enacted based on such reports — and all of this is free from the provisions of law.

Give me an example of how others have cracked down on white-collar crime. How did it work with Madoff for instance?

After the FBI swung into action, a special public prosecutor was appointed to try him in court. He was convicted in just a year’s time and given 150 years in jail. The criminal is behind bars, some money has been recovered and redistributed to those who were affected and an effort is on to trace the rest of the money. So there is a cure. They can run but they can’t hide. But we have to have a legal framework and trained people to tackle this.

For lay readers, can you outline what exactly is a white-collar crime? And why has it proliferated so much?

White-collar crime is a case of a corporate scamming another corporate or, in India’s case, scamming the tax payer and the exchequer. A large percentage of such crimes is against the tax payer and is always done with the active collusion of someone within the government. So the criminals are aided by a system that is supposed to look after the victim. Because the victims are amorphous and not immediate, it all gets very diffused and confusing. Unfortunately, as I said earlier, the legal statute used to prosecute such crimes is the same as what is used against pickpockets, criminals and murderers. So a sub-inspector dealing with someone carrying a weapon is also expected to deal with someone like a Raju!

Publications like ours and civil society activists have been warning that the euphoria about the growth story in India is misplaced. Do you agree? Even Raghuram Rajan, (former economist with IMF and currently economic adviser to the PM) wrote recently that there has been a “privatisation through stealth” and most Indian billionaires have been created out of their proximity to political power. Does this worry you?

I’ll give you a small empirical fact about our growth. We’ve been talking about 9 percent growth. But the three main components of this are mining, real estate and construction which are growing at higher than average. Agriculture is 1 percent. Manufacturing is 3 percent. So the average is high only because of these three sections. There is not a man in India who believes that these sectors are not heavily politicised. And it’s these sectors that have thrown up the most number of billionaires. So the government is asking us to celebrate an economic model whose inside story is about robber barons and crony capitalism. If you are endorsing this percent growth rate, then you are basically endorsing crony capitalism.

It’s really heartening to have someone from the corporate community talking of this.

Shoma, believe me, I have been writing and speaking about this. We all want growth but we should define the kind of growth we want. Bureaucrats don’t give a damn — they will say 9 percent growth and hype it all up. But the truth is this growth is distorting our wealth creation and creating a small club of billionaires while 480 million of our people still live in sub-Saharan conditions. If you only enjoy spreadsheets and numbers, you can keep plotting graphs and marvel at how it’s going up. But the graphs hide a lot of things. That’s what Rajan says. If you allow this kind of wealth creation, you are, in effect, putting democracy at risk. It’s going to be a democracy not of the people, by the people, but of, for and by money.

Suitcase story Harshad Mehta releasing proof of his claim of bribing PM Rao to halt the 1991 probe into the stock market scam

Let’s get back to the spectrum issue. There was a talk about bailouts, about the sector being unviable. Can you explain that?

Raja has inadvertently done a couple of good things. Before he got into dishing out licences, the sector had only four operators. They were running a cartel, fixing prices of SMSes and calls. For example, the cost of an SMS for an operator is 5 paise, but every operator was charging Re. 1. With millions of SMSes a day, you can imagine the money involved.

On one occasion, all the operators had increased their prices for a certain service on the same day. I wrote to TRAI saying isn’t that cartel behaviour? The regulator Vipin Sharma wrote back saying it’s cooperative pricing and not a cartel. He had figured out a new English word for it! I challenged him. Because of these letters, overnight operators reduced SMS charges from Re.1 to 20 paise. So that was the margin they were making all along! And the regulator was doing nothing. By issuing all these licences, Raja altered the cosy economics of the four operators. He altered it in favour of the consumer for the first time.

Is it at all possible that neither the PM or finance minister were unaware of what was going on? They are all men of finance. Why was there no alarm?

It is impossible for them not to have known. There was so much correspondence. There was a letter from the finance ministry to the DoT. Competition Secretary Vinod Dhall also wrote to the DoT saying the spectrum should be auctioned. There was media discussion. There were two Parliamentary discussions between 2008 and 2010 on it. To say they didn’t know is a serious stretch of imagination.

Let’s look at the excuses being offered. Raja said he was only doing what others had done and what the regulator recommended. Let’s assume for a minute this was true. The independent regulator had recommended an action that caused immense loss. Why should the regulator not be taken to task for this? The second question is why could the government not overrule the regulator in the face of such obvious loss? It’s never been gospel truth; it’s been overruled on many occasions before.

The basic question is why did the new licences not get sold at the market rate? Raja said that if he would have increased the rates, the new players wouldn’t have been able to compete because existing players had got spectrum at cheaper rates. This argument falls flat because if Vodafone can pay $12 billion for Hutchinson and still price their calls at 60 paise per minute, that means there is a lot of margin to play around with.

Do you think there should be a JPC?

The answer is simple. In a mature democracy, the investigation would be done by the CBI. But we are in a situation where there is no credibility left in any institution to handle such crimes. Only Parliament can get to the truth. If political scores are settled in the process, so be it. At least we should get a realistic assessment of what went wrong.

Niira Radia can pick up the phone and call just about anybody. What is the legitimate space for lobbying? How do we read this bewildering phenomenon?

There are two things that characterise today’s government. It has unprecedented money to spend — this year’s budget was Rs. 10 lakh crore! Second, it has unprecedented discretion in the award of contracts and deals. Technically, the old Licence Raj has gone, but largesse remains. Such unprecedented powers have created a vibrant environment for lobbyists to thrive. One act of effective lobbying can mean profits of thousands of crores. Because the stakes are so high, the payback to the system is high too. That explains their reach.

What are the immediate course corrections?

There has to be a deterrent against robber barons and oligarchic capitalism. Policymaking has to become more transparent. If you read the manifesto of the Tories in the UK, they have promised unprecedented transparency. We also have to push for heightened transparency where tax- payers’ money is involved.

‘Rolling out the red carpet is fine but rolling over and playing dead is not. You have to deal with corporations from a point of strength’

Is bringing corporations under the ambit of RTI part of that process?

Yes, wherever there is a contract or memorandum between corporates and the government, which involves a private-public partnership, a use of national resources or tax-payers’ money, it should be under the purview of RTI and the CAG should be able to audit it. The problem is that with two million such transactions every year, even the CAG led by a good man like Vinod Rai and his four-member team cannot possibly audit all that. So we need to push for mandatory legal disclosures.

With the RTI, you need to ask a question to get an answer. But they should be disclosing without being asked. More disclosures from government, a better legal framework for prosecuting white-collar crime and heavy penalties will hopefully be a good deterrent.

But big business is always pushing for less government.

You cannot expect people who are in the business of wealth creation to regulate themselves. The government cannot abrogate its responsibility to make and enforce rules. Business does play an important role but it shouldn’t be laissez faire. The way to make corporates more honest is not to plead with them to be honest. It is really for society to lay down rules and define what is acceptable corporate behaviour. I was FICCI president for a year and I kept saying we can’t be lobbyists. We need to have stakes in modern India, democracy and equitable growth. The vision to have morally responsible corporates has to be driven by society articulating it to them. We have to tell corporates that irresponsible, greedy behaviour is unacceptable.

NIIRA RADIA — owner of PR company Vaishnavi Communications, among others — is not merely a fixer in the old sense of the word. She is a thermometer reading for a very ill society. In April this year, a clutch of mysterious documents had made their way to several media houses. At face value the documents seemed a synopsis of phone conversations between Niira — a powerful lobbyist for Mukesh Ambani and Ratan Tata — and a range of politicians, corporate captains and journalists. It hinted at the intense political jostling that had gone into securing DMK leader A Raja the ministry of telecom under UPA 2; it mentioned disgraced chief minister Madhu Koda demanding bribes from the Tatas for the renewal of mining leases in Jharkhand; and a daunting array of other corporate wrongdoing, involving several blue-chip companies.

The story went that the Income Tax department had sought permission from the home ministry in 2008 to tap Niira’s phones as she was suspected of financial irregularities. These taps had led to even greater revelations. Now the conversations had been leaked. Very few media houses, however, went public with the story at that stage. It was difficult to authenticate the papers or understand quite what they were referring to. There was no access to the actual phone taps. And the leak seemed a vested corporate manoeuvre: both selective and pernicious.

As the year progressed though, the story kept gathering heat. A couple of papers — The Pioneer and The Hindu — published portions of the documents (though the latter subsequently retracted). Finally, the 3G auction — and the vast difference in the money it earned the national exchequer — blew the lid off the 2G spectrum scam. The CAG report gave it further official stamp.

In many ways, Niira was inextricably linked with the scam. At the very least, she was symptomatic of the ugly crony capitalism, media manipulation and political favouritism that had enabled it. Last week, therefore, reputed advocate Prashant Bhushan attached her tapped conversations in a PIL in the Supreme Court on the 2G scam. This emboldened two newsmagazines Outlook and Open to go public with the transcripts of these infamous ‘Niira Radia tapes’ — with the simple caveat that though they still could not authenticate the transcripts or tapes, Bhushan’s PIL had already put them in the “public domain” and they were merely amplifying the act. In a season of staggering corruptions, this cracked open a whole new front.

These transcripts — which involve conversations between Niira and a range of journalists and editors like Prabhu Chawla, Vir Sanghvi, Barkha Dutt, Senthil Chengalvarayan, MK Venu, Navika Kumar, Ganapathy Subramaniam amongst dozens of others — have shocked readers and created intense heartburn and anger in the media fraternity.

They would. There is much to be shocked and angry and ashamed about. There is much that is cancerously wrong with the media, in fact. But Niira is only the reading. If any healing has to come from it, it’s imperative we get the diagnosis right.

IT IS always a delicate — and tricky — business for journalists to write about fellow journalists. But no one can deny that listening to the Radia tapes is a deeply dismaying experience. Even if one were to discount a lot of it as innocuous bazaar gossip, empty boasting and grandstanding, there is still enough left over for real dismay.

For instance, there is an embarrassing and collusive chumminess on display between Niira, journalists and politicians. On a first hearing there may be no obvious quid pro quo, no crude exchange of money for favours rendered. All the benefits seem to be in the intangibles: proximity, influence, news feeds that can pass for scoops, and everything that flows from such things. But Niira, it seems, can reach anyone. No journalist is hostile to her as she goes around peddling the anxieties of the men she represents and managing the media for them. What the tapes reveal, therefore, is an insidious and vast ecosystem, in which everyone knows the rules and nothing is what it seems: stories can be planted; headlines can be discussed; story positions can be dictated; corporate journalists “belong” to particular corporate camps and are obviously paid retainer fees; stories are slanted to serve patron interests; and journalists can be moulded to bridge between corporates and politicians. The conversations also point to how several corporates leverage every rupee of ad spend to either extract positive stories or intimidate the publication of critical ones.

Listening in, you feel trapped in a giant Truman Show. This, then, is the really murky takeaway from the tapes: the foundational separation between media, politics and business has collapsed dangerously. The ecosystem is eating away at the innards of Indian democracy. Big business has its tentacles everywhere. Almost all the premier publications and channels — The Times of India, Times Now, The Economic Times, CNBC etc — come across as compromised in differing percentages.

There is much that is cancerously wrong with the media. But Niira is only the reading. If any healing has to come, it’s imperative we get the diagnosis right

Prominence, however, commands a steep price. The publication of the Radia tapes should have triggered intense introspection and dialogue about the structural flaws in the media. But the focus of both the magazine stories and the sharp reactions they have evoked has largely been centred on a few select journalists: Barkha Dutt, Prabhu Chawla and Vir Sanghvi among them.

It can be tempting to lump all three together in a band of derision — and many commentators have done that. But the truth is, each of these cases separately point to one crucial thing: the Radia tapes offer a big opportunity for a muchneeded and long-overdue debate on media ethics. To get that, we must sift what we really should be afraid about in the media. And eschew overblowing or mixing the rest. It would be a pity to take an axe to something where a little pruning will do. Or just chop down what actually needs to be rooted out.

Very briefly, therefore, each of these journalists’ conversations bears individual scrutiny. Barkha’s conversations with Niira revolve around a period immediately after the general election when Cabinet formation is on and communication between the Congress and DMK seems to have broken down. There is obviously an acrid rivalry between Dayanidhi Maran and Raja, and Niira, who is rooting for the latter, calls Barkha several times asking her to speak to the Congress and get them to speak to DMK chief Karunanidhi directly, bypassing Maran. On a couple of occasions, Barkha agrees to talk to Ahmed Patel about this.

Prima facie, Barkha seems to have become a player in a script she should merely have been reporting on. If Maran and Raja were gunning for each other, shouldn’t she have been doing a story on their spat rather than trying to resolve the crisis? Should she have been the carrier of messages between two parties, to the detriment of one? Step back from the apparent inappropriateness of this and examine some of Barkha’s defence: She says she never spoke to Patel on Raja’s behalf and was merely putting on a standard show of exaggerated empathy to prime a source for news; she also challenges her critics to prove any personal quid pro quo or any slack in her own or NDTV’s coverage on Raja to prove that she was brokering a ministerial berth for him. The odds are, she would come absolutely clear on the latter, while no one can ever really prove the former.

So the question is, is a journalist wrong to string a source along into a comfort zone that will make them share information? Conversely, is it morally wrong for a political journalist, who depends on information flow from politicians, to trade in innocuous, non-privileged information between parties as Barkha might have done? Raja’s subsequent corruptions has made this a much more emotive question than it might ordinarily have been, but even Barkha’s harshest critics would concede that her actions do not count as the dark heart of the genuine media crisis in India.

Vir Sanghvi’s conversations, on the other hand, are much more ambiguous and difficult to defend. Approached by Niira to speak to the Congress on the same hectic crisis — of bypassing Maran and speaking directly to Karunanidhi — Vir is much more emphatic both in his offer of help and his selfidentification with the Congress. Even more damagingly, in another set of conversations with Niira on the Ambani brothers’ epic fight over gas in the KG Basin, he seems to be offering to script his widely read ‘Counterpoint’ column in concert with Niira’s specifications. He’s also recorded in a conversation offering to stage a pre-scripted interview with Mukesh Ambani.

Vir’s defence runs on similar lines as Barkha’s: he says he was stringing a source along and challenges his critics to read his ‘Counterpoint’ columns on the Ambanis and see if there is the slightest favour towards Mukesh, or whether he ever conducted the scripted interview. He also says his conversations have been spliced. While he might be right on all these counts — and his columns do display no bias — his tonality is much tougher to surmount. He comes across as someone peddling influence and journalistic propriety be damned.

Of all the three though, Prabhu Chawla’s conversations with Niira come closest to exposing some of what ails Indian media. Niira calls Chawla for some “perspective” in the aftermath of the Bombay High Court judgement on the Ambani brothers’ gas-sharing dispute. They talk casually and knowingly about how the court judgement has been “fixed” and what Mukesh Ambani must now do to reverse the judgement in the Supreme Court. There is no stringing of source here: Chawla openly admits that he wanted to get in touch with Mukesh Ambani to “forewarn” him about the impending judgement and to advise him on what people and routes he should use to swing things in his favour in the Supreme Court. No claim of loose talk or misrepresentation, therefore, can take the compromising sting out of this conversation. Going by this phone tap, there is very little to distinguish Chawla from Niira.

IN A sense, the Radia tapes are as much a window into a sociological phenomenon born out of the peculiar powerleavened corridors of Delhi as an exposé on the state of Indian media. The conversations in the tapes show a kind of moral flaccidity, a clouded vision born out of too much proximity, a kind of loose-tongued insincerity. So a former CII director general is on tape cadging for a five-acre piece of land. Some of India’s most influential businessmen are on tape wondering why ministers are behaving so unkindly towards them when so much has been done for them. And journalists are bending over for approval from those they should have been reprimanding. India’s political, corporate and media establishment sounds like a mobile cocktail party, gliding champagne glasses in hand, in and out of each others’ drawing rooms, television studios, boardrooms and award ceremonies like actors in an elaborate charade. For those watching from the outside, it looks apocalyptic. For those within, there is not even a redeeming self-awareness. The media’s cosiness with corporate India is almost suicidal. All the health indices — both of a self-respecting media and a self-respecting society — seem to be smudged. Where there should have been scepticism, distance, vigilance and creative friction, there is only a great and saccharine chumminess.

Despite this, it would be a mistake to interpret these tapes with excessive self-righteousness or too many broad-strokes — either from within the media fraternity or from outside. For one, it is segments of the same media that has gone after Raja; the CWG corruption; the Adarsh Society housing scam and the Bengaluru land scam — to name just a few of the recent victories the media has drawn up for itself.

For another, information gathering can be a complex business. The relationship between a journalist and a source, therefore, is a complicated one that needs careful and individual evaluation. What is a legitimate relationship? What counts for harmless play and what for collusion? What is the line that cannot be crossed? What constitutes mere friendliness with a politician or corporate and what constitutes favour or partiality? Are we misreading faux sympathy — a ploy journalists often use — because it has been pulled out of context? These questions need a calm and reasoned debate.

Equally, the tapes themselves come shrouded in many inconsistencies. Given its ambiguous origins, the talk is that there are 5,000 conversations that have been tapped. The CBI has transcribed only 3,000, of which only 104 or so are in the public domain. What’s worse is that some of these conversations are literally fragments, often cut off midway. Who has edited them? What has been edited out? Who decided what gets put out and what doesn’t? Who leaked the transcripts and tapes? Have people been made victim to some shadowy corporate war? Are we comfortable with having our conversations tapped officially and then being leaked into public? Do private conversations take on a different tenor when yanked out of context and made public?

The chagrin amongst some of the journalists on the tapes is that Outlook and Open did not take the trouble to frame their exposés with any of these admissions.

The Radia tapes are a complex mix of idle conversation, social banter and conversations with grave public impact.

Given all this, the pity is, where there should have been engaged debate, there is now largely a dangerous and unprofessional silence. Most news channels and newspapers have sidestepped the entire issue — choosing to duck rather than straddle the complexities.

As Rajdeep Sardesai, editor of CNN-IBN says, “We urgently need an open and transparent debate on the relationship between corporates and media. I am just very wary of the kind of shock and awe or sensational journalism that has surrounded these tapes because they detract from the genuinely serious issues that confront us.”

THE LIST of these serious issues is legion. One of the most damaging symptoms in Indian media today is its slavish relationship with corporate power. Political misconduct is often brought to book, corporate crime almost never. There are crippling structural reasons for this. In print, media must be the only business in the world that loses money on its selling price. Indians are willing to pay 50 for a packet of chips or a coffee but they baulk at paying that for a magazine or newspaper. Unless consumers of news train themselves to pay for truth-telling, they will always be hostaged to advertisers and vested corporate interests.

In television, the entrapments get even more complex. Set aside the launch and running costs of a television channel, just the cable distribution cost every year runs upwards of Rs. 50 crore. This is sheer profiteering but the government has done nothing to curb it. Given all this, the moment a television channel is launched, the economics militate against it doing the really hard-hitting, rock-boat stories. For media companies that are publicly listed, the corporate skulduggery is even more complex. Miffed corporations have been known to invest in media shares and drive the stocks up or down depending on their compliance.

Individual greed and misconduct. Individual loss of vision and moral sight is only a minor part of the problem. The greater challenges are the design faults. If the shock of the colossal corporate cronyism made visible by the hyperbusy, hyper-networking Niira Radia helps change the architecture of media practice in India, its damage would have been worthwhile.

But for that to happen, the media fraternity will have to give up its silence and take up its primary function: engender debate