#ChopperScam: The Italian Job

The reports of the investigation into allegations of corruption in the dealings of Italian aerospace and defense company, Finmeccanica in India, first emerged almost exactly a years back. Since then, The Indian Express reporter, Manu Pubby has been diligently pursuing the story as it unraveled. In fact, the newspaper has put together an e-book comprising the all the stories done by Pubby, while reporting the alleged corruption in the deal to supply India with 12 VVIP AgustaWestland AW101 helicopters, three of which have already been delivered.

These helicopters are special aircraft for transportation of heads of state and government, outfitted with a variety of self-protection measures that include Missile Approach Warning System (MAWS) and chaff and flare dispensers to deflect incoming heat-seeking projectiles as well as other counter measures.

Readers can download the 28-page e-book here.

But for the sake of brevity, we’ve put together a narrative of the alleged AgustaWestland corruption scandal unfolded, with links to the stories done by Pubby.

For those who come in late, the story so far…

Last year, around this time, reports surfaced of an Italian investigation into the Italian aviation and defense company Finmeccanica and its top leadership, over allegations of corruption with respect to deals that included contracts with India. It all began with revelations about corruption made by Lorenzo Borgogni, former head of Finmeccanica’s external relations.

The next day, Defense Minister Arackaparambil Kurien Antony issued orders for an inquiry into the reports.

The name of Guido Ralph Haschke popped up when his office was raided in Switzerland in allegedly because he was hired to facilitate the conclusion of the contract for 12 VVIP AgustaWestland AW101 helicopters with India for a reportedly EUR 51 million pay-off.

Then in April, Antony threatened the invocation of the integrity clause embedded in the terms of the tender as well as the contract in case of any impropriety.

Soon after, reports emerged that a EUR 10 million ‘slush fund’ was set up to facilitate the conclusion of the contract.

And in October, Haschke was arrested by Swiss police on charges that included money-laundering. It was also reported that he was a director in a Chandigarh-based aviation company called Aeromatrix, which also had as a director a gentleman called Carlo Gerosa. Investigators had recorded a conversation between Haschke, Gerosa and two other individuals in Switzerland, which referred to ‘payments of over 20 million euros allegedly made to various parties. Haschke reportedly talks about the money being routed through Mauritius and Tunisia, making it very difficult for investigators to trace.’

Right after this report, Antony told his ministry to get details of the affair from the Indian embassy in Rome.

Another name surfaced in this tale of corruption. British consultant, Christian Michel, was alleged to have recieved part of EUR 51 million from Haschke for allegedly ‘mediating’ the contract.

Finmeccanica’s representative in India, Girasole Paolo, was also allegedly implicated for involvement in money-laundering and receiving kickbacks for the contract.

Another helicopter tender came under a cloud with the report of possible graft in a second helicopter tender. A serving Indian Army brigadier who was part of the trial team for the procurement of 197 helicopters had allegedly demanded a USD 5 million bribe for favoring AgustaWestland. As events turned out, the tender ended up as a contest between Eurocopter and the Russian Kamov.

A few days later, The Indian Express reported the name of a former Indian Air Force officer cadet, Sanjeev Kumar Tyagi, cousin of Air Chief Marshal SP Tyagi (who incidentally served as head of the IAF from 2004 to 2007) for alleged involvement in the bribery case. Two other Indians, Praveen Bakshi, CEO of the previously-mentioned Aeromatrix and a lawyer, Gautam Khaitan, were also alleged to have been involved. Khaitan later issued a statement denying any involvement in any impropriety.

Antony again asked for a report on the entire affair.

Pubby then reported the presence of another player in the game. A mysterious unnamed Indian giving orders to Haschke and all of the others mentioned above.

Haschke and Gerosa were reported to have expressed confidence in wiretapped conversations about the gullibility of Indian investigators and judges.

It emerged that an associate of Haschke, Carmelo Messina, had introduced him to AgustaWestland. Haschke is alleged to have managed to get the Staff Qualitative Requirements (SQRs) or selection criteria, changed to favor the AgustaWestland aircraft. Messina said he received EUR 50,000 – 60,000 in cash as a ‘thank you’.

This was something later confirmed by The Indian Express.

An agreement between AgustaWestland and a company called Ganton Limited, dated August 07, 2009 also surfaced that indicated the appointment of Abhishek Verma, alleged to be commission agent for arms companies, as an agent for the Italian company for the attempted sale of AW helicopters to Delhi Police.