Politicians, industrialists and journalists take role in Indian 2G scam

It was never unknown that many politicians are corrupt or the so called “noble journalism” is a phenomenon of the past, or indeed that corporations today control both government and media. At least in India, these are quite observable facts. Common Indians live with it.

In India, a boom in any sector is bound to come with a scam. The same happened with the Telecom sector. The boom did come with a scam – all of the 2G and 3G spectrum drama.

Exposing the dark sides of “booming” India telecom, a couple of leading media houses – Outlook Magazine and Open Magazine – have published the audio tapes of telephone conversations between former telecommunication minister A Raja and Nira Radia, a lobbyist for industry tycoons Ratan Tata and Mukesh Ambani.

Raja was even heard saying to Radia, “Go and tell Sunil Mittal (Bharti Airtel Chairman) that he has to work with Raja for 5 more years.”

It is quite observable from the tapes that Radia, who also owns a few PR agencies, was lobbying for A Raja and other DMK ministers to get key portfolios, including telecoms, owned by industrialists like Bharti Airtel, Reliance and Tata Communications.

Even senior Indian journalists like Barkha Dutt, Vir Sanghvi, and Shankar Aiyar were heard in a conversation with Radia regarding the allocation of portfolios.

The audio tapes may never get fully exposed given the powerful constituents such as politicians, industrialists and media involvement.  But it is surprising to observe the so called “un-biased” media is relatively silent over the issue. What happens to tax-payers’ money has to be questioned now.

A Raja and 2G scam

In 2008, the 2G spectrum licence allocation raised eyebrows with Raja’s decision to grant pan-India 2G licences at Rs 1,650 crore ($336 million) was questioned for the first time.

The Finance Ministry reportedly had evidence proving the DoT  (Department of Telecommunications) compromised the exchequer’s revenue, by giving pan-India 2G licences at the old price of $375 million (Rs 1650 crore).

It implied that licences were awarded at one-fourth the market price, with a revenue loss of over $5 billion (Rs 25,000 crore) compared to the 2008 price.

The Finance Ministry then suggested the DoT should have fixed the price at 3.5 times the cost allotted in January 2008, but, despite the opposition from the Finance Ministry, the DoT stuck to its guns. The Finance Ministry’s suggestion could actually have been helpful, while India was going through a tough financial phase. As a result, consumers will have to bear the burden of the deficit by paying higher taxes. 

The feud had spilled over into 3G as well, as senior Finance Ministry officials and opposition parties alleged that the DoT has actually violated 3G guidelines.

What are the powerful constituents are saying in defense?

Ratan Tata has filed a petition asking the Centre to probe the leak of the tapes. Tata has also reportedly said that these are private conversations and are not meant to come to public light.

Refuting the industrialist’s petition, Prashant Bhushan, the lawyer who filed a public interest litigation against A Raja, said these are not private conversations as they indicate fixing and deal-making and show quite clearly how the whole ruling establishment functions.

Nira Radia, the face of all the leaked tapes, has been questioned by the Enforcement Directorate (ED) for nine long hours. Sources say that Radia’s role in the 2G could be vital for investigations as lot of foreign transactions and offshore deals might get exposed. It won’t be surprising to see that the investigations could possibly expose money laundering in the 2G spectrum allocation.

ED has interrogated her on links with some of the telecom companies that were allocated 2G spectrum in 2008 by A Raja, the then telecom minister.

Vaishnavi’s earlier tape controversy

This is not the first time that Nira Radia’s hogged the limelight. Earlier this year in April, a similar controversy erupted when Parliament saw a debate between home minister P Chidambaram and Opposition leader Arun Jaitley on the subject of phone tapping, and the role of corporate lobbyists.

Vaishnavi Corporate Communications, a PR firm, headed by Nira Radia, got into this controversy in April when allegations were levied that all of Vaishnavi’s interactions with the government on behalf of the Tata group were related to seeking a level playing field. There were allegations of payouts and seeking undue favours.

Tata clarified, saying activities of Vaishnavi, its corporate communications agency, had never been involved in “payouts or seeking undue favours”.

There are alleged conversations between recently-resigned former communications minister A Raja and Ms Radia on awarding telecom licences.

Meanwhile, journalists like Barkha Dutt and Vir Sanghvi gave the names of journalist source conversation.