Home » Politics » Best bet: why the Goa bribery scam is a gift for the BJP
 

Best bet: why the Goa bribery scam is a gift for the BJP

Sanjeev Shivadekar | Updated on: 28 July 2015, 17:24 IST
QUICK PILL

The scam

  • US-based firm Louis Berger paid just under $1 million to bag a project in Goa
  • The project: to build and expand water and sewerage facilities
  • The firm also bribed officials in Assam to secure a similar contract
  • Its contract for the Mumbai metro 3 project is also under the scanner

The discovery

  • Internal audit revealed firm paid bribes in India, Indonesia, Kuwait, Vietnam
  • Former executives Richard Hirsch and James McClung were prosecuted
  • They pleaded guilty; the company paid $17.1 million to resolve the charges
  • Prosecutors said firm kept a diary of the bribes paid, but didn\'t give details

The fallout

  • The BJP is hitting back at the Congress, during whose rule the scam took place
  • It wants CBI probe into Louis Berger deals in other Congress-ruled states
  • Its aim: to undercut the Congress\' campaign against its allegedly tainted leaders
  • The opposition has deadlocked parliament over Lalit Modi row, Vyapam scam
  • The Congress denies wrongdoing, calls BJP\'s posturing \'vindictive politics\'

The Louis Berger scam in Goa could not have come at a better time for the BJP.

Under pressure from the Congress for the resignation of 'tainted' External Affairs Minister Sushma Swaraj and chief ministers Vasundhara Raje of Rajasthan and Shivraj Singh Chouhan of Madhya Pradesh, the BJP has latched on to the scam owing to its potential to embarrass the Congress.

[Update on 28 July: The Goa crime branch has asked then-CM Digambar Kamar and public works minister Churchill Alemao to appear before them for further inquiry. At the same time, Goa police has also arrested a retired chief engineer, who headed the Japan-funded project in the state which is currently under scanner. This move is likely to help balance the scales in the corruption battles being fought out between BJP and Congress in Parliament.]

Though the state is ruled by the BJP, the party is demanding a CBI investigation, clearly to embarrass the Congress, during whose government the scam took place.

What's the scam? The government had planned a project to build and expand water and sewerage facilities in Goa. The project was sanctioned in 2007. To fund the project, Goa took a loan of Rs 8,017 crore from the Japan International Cooperation Agency, or JICA.

Louis Berger International, a construction management firm based in the US, was as consultant on the project. Though it did not bid for the project, the firm partnered a consortium appointed as consultant.

This it did by bribing Goa's officials, including allegedly a minister, to the tune of $9,76,630 in 2009-10. The firm also paid bribes for a similar project in Assam.

Under a cloud

According to media reports, the corruption was discovered during an internal audit of the firm. Based on the audit report, the US Justice Department prosecuted two former executives of the firm - Richard Hirsch and James McClung, who had served as senior vice president for the firm's India operations.

Both pleaded guilty to bribing officials in India as well as in Indonesia, Kuwait and Vietnam to secure government construction management contracts. The firm has since paid a $17.1 million fine to resolve the charges. But neither Louis Berger nor the US Justice Department have revealed who the bribes were paid to. This is now a subject of police investigation in Goa and Assam.

The BJP, however, wants the CBI to get involved. "The firm's representatives may have confessed to bribes in Goa, but one can't rule out the possibility of the firm using similar tactics to win contracts in other states," said BJP legislator from Mumbai Atul Bhatkhalkar. "Therefore, the CBI, instead of focusing on Goa alone, should probe all deals signed by the firm in India."

Louis Berger has been operating in India since the late 1990s and has secured major contracts in many states. The company is said to have offices in Mumbai, Chennai and Hyderabad.

The firm consulted on Mumbai's metro and monorail projects as well as the Navi Mumbai airport.

And just like Goa's water development scheme, Mumbai's metro 3 project has received huge loans from JICA. Indeed, the Comptroller Auditor General had, in a 2014 report, pointed out irregularities in the appointment of the consultant for the project.

Battling back

Emboldened by these revelations, BJP leaders claim that several other contracts bagged by Louis Berger in Maharashtra, Assam and Himachal Pradesh also involved kickbacks. So, they argue, a CBI investigation is in order.

Accordingly, Goa Chief Minister Laxmikant Parsekar is flying to Delhi to brief the BJP's national leadership. Other party leaders are also likely to call on Prime Minister Narendra Modi and Home Minister Rajnath Singh and demand a CBI probe.

Like Goa's water scheme, Louis Berger's Mumbai's metro 3 project got huge loans from the JICA

"We have asked the CM to take all papers related to the deal in his personal custody to secure evidence related to deal, if any," said Goa BJP president Vijay Tendulkar.

"The diary is important. It will help reveal names of Congress ministers and bureaucrats involved in the scam. And that's beyond the Goa Police's reach. Hence the priority should be to hand over the case to the CBI," he added.

According to the American prosecutors, Louis Berger maintained a dairy of bribes paid to officials in India and the other three countries. The diary's contents though have not been revealed.

A wide probe across several Congress-ruled states will give the BJP a stick to beat the opposition party with, especially at a time when it has deadlocked the parliament over the Lalit Modi row and the Vyapam scam.

Crying foul

The Congress has denounced the BJP's posturing as 'vindictive politics'. Both Digambar Kamat, the Goa chief minister when the contract was awarded, and his then PWD Minister Churchill Alemao have denied any wrongdoing.

'The diary is important. It'll reveal names of ministers and babus involved in the scam': Goa BJP chief

Sachin Sawant, the party's spokesperson in Maharashtra said, "We are ready for a probe. But is the BJP ready for a probe into scams and irregularities involving its ministers like Pankaja Munde and Ranjit Patil. Or will the ruling party use the agencies to probe cases against the opposition and spare their leaders?"

Political analysts, meanwhile, are of the opinion that the scam won't damage the Congress much. "The party's image has already been dented enough by the coal and 2G scams. Since no big leader is involved in the Goa scam, I don't think it would hurt the party the way earlier scams did," said an analyst who did not want to be named.

The prediction may be premature given that investigations have barely begun.

First published: 28 July 2015, 17:24 IST
 
PREVIOUS STORY
NEXT STORY