Readers of this column have reasons to feel vindicated by last week’s CBI raids in the telecom ministry as on various telecom firms that benefited from telecom minister A Raja’s largesse in early 2008 — he gave a handful of favoured firms valuable spectrum at prices exactly equal to those paid by buyers in June 2001. Readers would recall every vicissitude in this saga, from the wishy-washy Trai recommendations that allowed Raja to do what he wanted, to his announcing a “technology neutrality” policy to give CDMA-mobile phone firms like Reliance Communications (RCom) and Tata Teleservices a GSM-mobile licence after RCom paid the licence fees, and finally to the TDSAT verdict on the RCom part of this scam that ruled in favour of Raja’s ministry — in the event, they’re probably hoping the CBI will find enough evidence to nail those behind the scam that some estimate is worth $10 billion.
Given the CBI’s track record in investigations (think Aarushi) and the political interference in its functioning (think Quattrocchi), it is an open question as to whether it can conclusively prove the case. But there’s a far more serious problem the CBI has to deal with. Let’s assume the CBI gets all the proof it needs — where does it go after this to check how solid its legal case is? To Attorney General (AG) GE Vahanvati, India’s highest law officer. Well, when he was Solicitor General (SG), Vahanvati had opined in favour of much of what Raja’s done — how is the AG going to say that what he said as SG was incorrect?
Assuming he does, how does the CBI get around the fact that the TDSAT has also ruled in favour of Raja? The CBI cannot possibly complete its case without talking to the head of Trai since the regulatory authority is seen as independent of Raja’s ministry.
Well, the current Trai chief, JS Sarma, is the man who, in the TDSAT, ruled in favour of Raja — Telecom Secretary DS Mathur, who was against giving the licences at the 2001 prices and refused to sign on the file, was in the running for the Trai job but it was Sarma who got it eventually. How is the CBI going to bridge all these chasms?
Read, in this context, the affidavit filed by the government in the case registered by Dr Arvind Gupta against the allotment of the new licences. Gupta argued that while the government policy since 1995 had been one of auctions, Raja allotted licences on a first-come-first-served (FCFS) basis — on September 25, 2007, Raja announced he would accept applications till October 1, but later decided he’d process only those received till September 25 on a FCFS basis.
In response to Gupta’s case, in December 2008, Vahanvati okayed (“settled”, in legalese) a government affidavit saying there were no problems with what Raja had done — mind you, this was done long after the then Trai chief Nripendra Misra had said Raja had twisted his recommendations, it was done long after Swan and Unitech had sold part of their firms to Etisalat/Telenor, making it clear just how much the licences they got for Rs 1,651 crore were worth. A sample of the affidavit:
* After seven foolscap pages of the history of the procedure of allotting spectrum, it concludes, “The challenge to first-come-first-served is really academic, irrelevant and of no consequence… There is no person who is aggrieved by the first-come-first-served basis.” Apart from the fact, the arguments don’t lead to this conclusion, the conclusion is factually incorrect since the firms that had applied till October 1 but didn’t get the spectrum are all aggrieved.
* The decision to award the spectrum in 2008 at 2001 prices is justified saying the idea of making “the services affordable and viable… can never be achieved if the licence fee or the cost of spectrum is kept at a high premium… .” Well, there was an auction — only Unitech conducted it! And, in any case, Telenor’s tariffs will be determined by Airtel’s tariffs, not by the premium it paid Unitech for the licence. There’s even a chart in the affidavit arguing that the original cellular mobile phone firms paid a lot less than that paid in the 2001 auctions, so why should those getting it in 2008 pay more?! Surely an auction in 2001 would automatically suggest one in 2008 as well?
* As for the windfall profits made by companies like Swan, “this is a completely mistaken analysis”.
Given that Vahanvati is the government’s lawyer, it’s not surprising he gave his client (in this case, Raja’s ministry) the opinion it wanted. But his promotion to Attorney General suggests the prime minister and others — who try and distance themselves from Raja — were of the view that Vahanvati had done the right thing.
The TDSAT’s judgement on the ministry announcing its “dual technology” policy after RCom paid the money (this put it at the top of the queue for spectrum) is even more shocking — the tribunal called this “early completion of formalities” and said it was “not a matter that would require intervention at our level”. Despite this blatantly flawed judgement, the Prime Minister’s Office had no problem okaying Raja’s proposal to make Sarma the Trai chief instead of Mathur.
And we still expect the CBI to find evidence to nail the guilty? History, as Marx said, repeats itself twice, first time as tragedy, second time as farce.