Just as a butterfly, our Scams has a life cycle too. The lifecycle of a butterfly comprises of the following stages
egg -> larva-> pupa -> butterfly
Similarly, scams go through four stages as identified below;
Irregularities -> Revelations -> Cover up -> Damage Control
Lifecycle of the 2G scam lasted 3.5 years and one price the citizens paid is 39 months of hunger. The point of this post is to walk through the lifecycle, because, as you read this right now, there are several other scams in various stages of the lifecycle. How does one cut the lifecycle of them?
For the impatient : skip the referred content (italicised bullets)!
References :
May 2007 : Raja gets appointed as Minister of Communications in PM's cabinet after a hectic brokering by some journalists and power brokers (Youtube Link1 @ 8:20 onwards) & (Barkha in Youtube Link2)
Oct 2007 : Raja started moving the pieces for the 2G scam.
It is obvious that the Prime Minister did not agree with the way DoT was handling the 2G spectrum allocation initially. While PM is not part of the irregularity, inaction and pussyfooting for 2 years implies he has contributed to the sorry state of affairs. While PM is the convenient face of the apathy of INC, who forced A. Raja into PM's cabinet?
New Revelations and More Irregularities (Jan 2008 - Nov 2008)
While A. Raja manages to evade and sideline opposition in the DoT, other organizations and courts start taking notice. The Congress high command is still hiding behind coalition politics.
Oct-Nov 2008 : Stake in Swan and Unitech, largest benefactors of Mr. Raja's actions, are sold to other companies for 6 times the price paid to DoT. This resulted in total evaluation of 2G spectrum at Rs. 70,022 crore, while it was sold to the 9 pre-selected companies to Rs. 10,772 crore. An instant profit of around 60,000 for the 9 companies, most of which have little prior presence in Telecom.
Cover ups (Nov 2008 - Nov 2010)
For two years subsequently, there have been consistent reports from various departments and courts. Any of these instances would have been a good time for the leader of coalition take stock and assess damage. But energy was invested in brushing aside the ample evidence and covering up the deeds.
May 2009 : Delhi High Court provides the first setback to Raja, in what is seen as first slap in the face to the GoI
April 28 2010 : Pioneer publishes a report about tapped conversations and becomes the first to connect these conversations to A. Raja and 2G telecom scandal
May 1 2010 : In Pioneer's editorial (All lines on this route are blocked), Chandan Mitra comments on intransigent Government in light of overwhelming evidence against A. Raja.
Apirl 9, 2010 - May 19, 2010 : 3G auctions yield around Rs 67,719 crore. CAG launches probe in 2G spectrum allocation.
September 2010 : Not much progress is made by CBI and ED until the Supreme Court intervenes in September 2010 on the PIL filed by Prashant Bhushan.
Nov 20 2010 : OPEN magazine publishes other tapes of Nira Radia conversations with politicians (A. Raja), journalists (Barkha Dutt & Vir Sanghvi) and corporate houses, laying bare the brokering that has been going on under the table, part of which was to give A. Raja the cabinet berth.
Nov 29, 2010 : Outlook published report "All lines are busy" putting the spotlight again on the tapped conversations.
In spite of ample evidence and parliament reaching a standstill for 3 months, GoI and Congress High Command drag their feet on launching a wide-ranged investigative committee until Feb 2011.
Dec 8, 2010 : CBI raids homes of A. Raja and other officials
Jan 7, 2011 : Kapil Sibal, the new minister replacing A. Raja, criticizes CAG for its report. Calls the report "utterly erroneous" and claims "The loss is Zero, nil,". Come to think of it, this needs to go into the "delusions" section, not "damage control" section
Jan 21, 2011 : Supreme Court terms the Kapil Sibal's remark as "unfortunate"
Feb 2, 2011 : Raja and other officials are arrested
Feb 16, 2010 : PM addresses a press conference as part of damage control exercise, but ends up further undermining the feeble stature of GoI in eyes of the public (more in later post)
Over and out!
egg -> larva-> pupa -> butterfly
Similarly, scams go through four stages as identified below;
Irregularities -> Revelations -> Cover up -> Damage Control
Lifecycle of the 2G scam lasted 3.5 years and one price the citizens paid is 39 months of hunger. The point of this post is to walk through the lifecycle, because, as you read this right now, there are several other scams in various stages of the lifecycle. How does one cut the lifecycle of them?
For the impatient : skip the referred content (italicised bullets)!
References :
- Violations, Timeline in 2G spectrum scam : J Gopikrishnan (Pioneer)
- canarytrap.in
- The 2G Tapes (Outlook)
Irregularities - Sowing the Seeds (May 2007 - Jan 2008)
- # A Raja becomes Union Minister for Environment and Forests in May 2004 and shifts to Ministry of Communications and IT on May 16, 2007. Raja’s friendly real estate companies want to become telecom operators and he informs his decision to Telecom Secretary DS Mathur for granting new licenses and spectrum to new players. But Mathur objects and argues for transparent auction and competitive pricing (as recommended by TRAI from 2003 onwards). Raja wants to grant licenses as per First-Come-First-Serve method (in a peculiar way – who first pays license fee and not who first applied) and old pricing fixed in 2001. In 2001, there were only four million mobile subscribers and it crossed 350 million in mid 2007. So Manju Madhvan, Member (Finance) of DoT, Finance Ministry also pointed out new competitive prices. But all ignored by Raja and he sent the file to Law Ministry for opinion and started procedures.
- # On September 24, 2007 DoT issues a press release (released in the late evening and appeared in next day newspapers), citing the last date of application (cut-off date) fixing to October 1, 2007.
- #Without Cabinet approval Raja allots Dual Policy or Cross Technology to Reliance Communications, Tata Teleservices and Shyam Telecom in October 2007 at a rate fixed in 2001. This technology allows CDMA operators to change to much wanted GSM Technology. CDMA operators were in bad shape and Raja’s decision became a boon to them. Here the corruption part is on allowing the much wanted GSM license at a six year old price. This move is Raja’s first major corruption in Telecom, which gave him courage to go ahead with 2G Spectrum allocation to new companies.
Sept 24, 2007 : 2G application cutoff set to Oct 1, 2007.
Oct 2007 : Raja tests the water with first major irregularity in DoT (Dual Policy or Cross Technology) and cleanly gets away with it. A template is now established.
Oct 2007 : Raja tests the water with first major irregularity in DoT (Dual Policy or Cross Technology) and cleanly gets away with it. A template is now established.
Oct 2007 : Raja started moving the pieces for the 2G scam.
- # On Nov 1, 2007, the Law Minister HR Bhardwaj rejects Raja’s plan and directs to constitute an Empowered Group of Ministers (eGoM) to form transparent procedures for 2G Spectrum allocation and new licenses.
- # Next day on Nov 2, 2007, by 8pm Raja wrote a letter to Prime Minister, objecting on Bhardwaj’s direction. “Law Ministry is out of context,” wrote Raja. This letter was delivered to PM’s residence
- # Within an hour (9pm), same day (Nov 2, 2007) – might be alerted by Bhardwaj- PM wrote to Raja to stop all procedures and directs him to get his concurrence in all future actions. This letter was delivered to Raja’s residence. Citing several wrong practices in the past, PM directs Raja to adopt transparent method by auction and new pricing.
- # Strong resistance by Telecom Secretary DS Mathur and Manju Madhavan prevents Raja from moving ahead. For suggesting series of steps for auction, Raja snubs Manju Madhvan, in an internal note dated Dec 4, 2007 who took VRS soon.(she applied well earlier).
- # On Dec 31, 2007, DS Mathur retires. Raja brings his trusted man Siddarth Behura as new Telecom Secretary, who worked as an Addl. Secretary with him Ministry of Environment and Forests.
- Within 10 days (Jan 10, 2008) at 2:45pm DoT uploads a press release saying that cut-off date was reversed from October 1, 2007 to September 25, 2007. The press release asked the new players to remit fee (huge money ranging from Rs.1500 cr- Rs.1600 cr) between 3:30pm -4:30pm on same day. It is a mystery that how Nine new companies made and remitted huge fee by demand draft within 45 minutes.
- #Here is the conspiracy angle. All the nine company owners/brokers were had a meeting with Raja on Jan 9, 2008 at his residence. All were informed by Minister 24 hours before the issue of press release. The cut-off date was reversed to September 25, 2007, because of Raja’s favorite company Unitech applied on Sept 24. Another favourite company Shyam Telelink also applied on Sept 24.
- #On Jan 10, 2008, the CEOs Swan and Unitech (most favoured companies of Raja) sit at Private Secretary RK Chandolia’s cabin in Sanchar Bhavan. DDG Access Service (AK Srivastava) directs officials to go Chandolia’s cabin at 3pm. Chandolia asks official to collect application and demand draft from CEOs and directs to give No : 1 status to Swan and No : 2 status to Unitech. Then only counter was opened at eighth floor of Sanachar Bhavan to receive application/ fee from other seven companies. There was a mad rush to become first in the queue and physical fight taken place between rivals. Bouncers were brought. CEOs were quarreled each other some telecom officers were manhandled.. Though police arrived, no case was registered by instruction of Chandolia.
New Revelations and More Irregularities (Jan 2008 - Nov 2008)
While A. Raja manages to evade and sideline opposition in the DoT, other organizations and courts start taking notice. The Congress high command is still hiding behind coalition politics.
- #TRAI Chairman Mr. Nripendra Misra’s letter to Telecom Secretary Siddharth Behura on January 14, 2008 – objecting the policy, reversal of cut-off date and manipulating his recommendations. Later in the media Misra described DoT had “cherry picked” his recommendations.
- #DoT allots spectrum/licenses (including additional spectrum to existing players to settle anger) on March/April 2008. All files were signed by Raja. Unitech applied licenses in different names - Unitech Infrastructure, Unitech Builders and Estates, Aska Projects, Nahan Properties, Hudson Properties, Volga Properties, Adonis Projects and Azare Properties.
- # On Sept 13, 2008, Raja forces BSNL CMD Kuldip Goyal to enter into a un-precedented MoU with Swan, known as Intra-Circle Roaming Agreement. This MoU will help Swan to use all infrastructure (Towers, optical network etc) of BSNL. This MoU was executed just a week before, Swan’s Rs.4500 Cr deal (sale of 45 per cent shares) with Etisalat. Swan gives unsolicited application to BSNL. The BSNL management committee demands 52 paise/call from Swan. But this clause was absent in the MoU. Raja also transfers senior officials in WPC (Joint Wireless Adviser RJS Kushwaha and Deputy Wireless Adviser D Jha) for objecting Swan’s proposals to BSNL and DoT.
Oct-Nov 2008 : Stake in Swan and Unitech, largest benefactors of Mr. Raja's actions, are sold to other companies for 6 times the price paid to DoT. This resulted in total evaluation of 2G spectrum at Rs. 70,022 crore, while it was sold to the 9 pre-selected companies to Rs. 10,772 crore. An instant profit of around 60,000 for the 9 companies, most of which have little prior presence in Telecom.
- # On Nov 4 2008, Swan informs DoT that - it allotted Rs.380Cr worth shares (9.9%) to a Chennai based newly floated company Genex Exim. This is believed to the kick back from Swan to Raja. Genex was incorporated on September 17, 2008,
Cover ups (Nov 2008 - Nov 2010)
For two years subsequently, there have been consistent reports from various departments and courts. Any of these instances would have been a good time for the leader of coalition take stock and assess damage. But energy was invested in brushing aside the ample evidence and covering up the deeds.
- Nov 2008 : Chief Vigilence Commission sends showcause notice to Raja and after further investigation, sends report to PM demanding Raja's prosecution
- Nov 2008 : In a span of 1.5 years starting in Nov 2008, Dr. Subramanyam Swamy wrote to PM four times demanding sanction to prosecute Raja.
- #On May 29, 2009 (48 hours after Raja sworn in again as Telecom Minister), Delhi High Court (Justice Mukul Mudgal and Justice Valmiki Mehta) on hearing the PIL against First-Come-First-Serve (FCFS) policy observed: “It is like selling cinema tickets. We find it very strange that public exchequer and valuable resources have been involved and misused in this way. We are completely astounded.”. The Delhi High Court in 1994 termed the FCFS policy as a barbarian and said not a suitable one to a democratic government
May 2009 : Delhi High Court provides the first setback to Raja, in what is seen as first slap in the face to the GoI
- # July 1, 2009 – Justice GS Sistani of Delhi High Court quashed the DoT’s decision to reverse the cut-off date.
- Oct 22, 2009 : CBI registers FIR against DoT and private companies for criminal conspiracy and loss to exchequer
- (March 2010) # DoT approaches Supreme Court through SLP to quash the HC verdicts. Janata Party President Subramanian Swamy impleads into the case. Sensing danger, Raja wanted the STel to withdraw from the case. On March 5, 2010, Friday evening after office hours, DoT issues an order asking STel to close its operation in three states, citing security reasons. There was no show cause was issued to STel and later Home Ministry revealed that they never raised any sort of security concern. Arm twisted STel surrendered before Raja on March 8, 2010 on Monday and declared that they have no troubles with DoT policy. Vahanvati produced STel’s surrender letter to Supreme Court, which was rejected and directed the company to file an affidavit. Due to Subramanian Swamy’s presence, Raja’s design failed and court said that thy will not interfere into the HC order declaring the change of cut off date as illegal.
March 2010 : DoT (under Raja) moves to Supreme Court and start softening the litigants, so as to avoid the repeat of the setback witnessed in High Court. DoT punishes the litigant, "STel" for its role in court proceedings. STel incidentally was a beneficiary of the Raja's rigging process. However, STel was unhappy with change of cut-off-date, as it meant they only got spectrum in 3 circles. In the end, forced to surrender, STel withdraws its objections.
March 2010 : Janata Dal's Sumbramanyam Swamy impleads into the case. And it is too late for Raja as Supreme court takes active interest in the case by now.
March 2010 : Janata Dal's Sumbramanyam Swamy impleads into the case. And it is too late for Raja as Supreme court takes active interest in the case by now.
- March 19, 2010 : Department of Personnel of the GoI, wrote to Subramanyam Swami the following "would be premature to consider sanction for prosecution at this stage".
April 28 2010 : Pioneer publishes a report about tapped conversations and becomes the first to connect these conversations to A. Raja and 2G telecom scandal
April 28, 2010 : Details of tapes establishing roles of Nira Radia and Raja in the 2G scam are published by J Gopikrishnana of Pioneer. Even after a potentially explosive expose, there was still an eerie calm in the in the media reporting and it ends out being just a ripple.
May 1 2010 : In Pioneer's editorial (All lines on this route are blocked), Chandan Mitra comments on intransigent Government in light of overwhelming evidence against A. Raja.
Apirl 9, 2010 - May 19, 2010 : 3G auctions yield around Rs 67,719 crore. CAG launches probe in 2G spectrum allocation.
September 2010 : Not much progress is made by CBI and ED until the Supreme Court intervenes in September 2010 on the PIL filed by Prashant Bhushan.
Nov 9 2010 : Parliament comes to a grinding halt with the opposition demanding action on all involved in the 2G scam.
Nov 14, 2010 : Raja is forced to resign in face of unrelenting opposition
Nov 15, 2010 : Kapil Sibal replaces A. Raja as Minister for communications and information technology.
Nov 16, 2010 : CAG estimates loss to exchequer from undervalued sale at Rs 1.76 Lakh crore.
Damage Control (Nov 2010-current)
Throughout these stages of the Scam's life cycle, conspicuous by their absence for the most part are, the so called "major national media outlets". Only exceptions are Pioneer and Outlook among the few. While the "major national media outlets" downplayed the magnitude of the incident, the expose gathers momentum of its own, thanks to Internet.
Nov 20 2010 : OPEN magazine publishes other tapes of Nira Radia conversations with politicians (A. Raja), journalists (Barkha Dutt & Vir Sanghvi) and corporate houses, laying bare the brokering that has been going on under the table, part of which was to give A. Raja the cabinet berth.
Nov 29, 2010 : Outlook published report "All lines are busy" putting the spotlight again on the tapped conversations.
In spite of ample evidence and parliament reaching a standstill for 3 months, GoI and Congress High Command drag their feet on launching a wide-ranged investigative committee until Feb 2011.
Dec 8, 2010 : CBI raids homes of A. Raja and other officials
Jan 7, 2011 : Kapil Sibal, the new minister replacing A. Raja, criticizes CAG for its report. Calls the report "utterly erroneous" and claims "The loss is Zero, nil,". Come to think of it, this needs to go into the "delusions" section, not "damage control" section
Jan 21, 2011 : Supreme Court terms the Kapil Sibal's remark as "unfortunate"
Feb 2, 2011 : Raja and other officials are arrested
Feb 16, 2010 : PM addresses a press conference as part of damage control exercise, but ends up further undermining the feeble stature of GoI in eyes of the public (more in later post)
Over and out!
