Hillary raised chopper deal with Govt, Russians pushed India too far: Michel

On Saturday, The Indian Express reported that Michel claimed to have lobbied with the Chopper deal then UPA Government when, as he describes it, the deal was “on the edge of the cliff” before it was sealed in 2010. Saturday also marked three years since Michel was extradited from Dubai.

In dispatches to AgustaWestland about last-ditch efforts made to nix the deal by competitors, mainly US aircraft manufacturer Sikorsky and the Russians, Michel writes about how Clinton purportedly took up the VVIP chopper deal with then Prime Minister Manmohan Singh, leading to a hectic round of lobbying and damage control.

The first reference to this comes in a dispatch dated December 4, 2008: “Last week, Sikorsky sent a letter to the Secretary stating that AgustaWestland had been shown undue favoritism and financial compliances have been overlooked. The letter threatened legal action. In short, he (the Sikorsky official) accused the CNC (Contract Negotiation Committee) of being compromised, and with a new Government coming which will investigate all actions…”

On August 28, 2009, Michel sent a dispatch to the company describing the purported intervention by the then US Secretary of State. “On the 19th of July (2009) to the 23rd, Hillary Clinton visited India. She had meetings with the Indian Prime Minister… she raised a point that was not in the agenda (Why is India buying the 101? How can India do it?),” he writes in an apparent reference to AgustaWestland’s AW-101.

To keep “good” India-US bilateral relations as “his legacy,” Michel claims in a fax, the PM “promised to look into it.”

In the dispatches, Michel claims that at the meeting of the Cabinet Committee on Security (CCS), the PM asked all Ministers to raise any questions on the deal to the Defence Ministry — and that they should be answered before the contract file is sent to the committee for a second time.

Michel claims that he and the AgustaWestland team were “stunned” by the “aggressiveness” of the Americans and beefed up the second CCS note. The deal was cleared at the second meeting of the CCS.

According to Michel, the PM’s intervention served two purposes: placate the Americans and ward off objections.

The purported objections raised by the then Finance Minister Pranab Mukherjee also find mention in dispatches quoted in the ED’s complaint. In a dispatch dated July 31, 2009, Michel writes: “What the PM has done is clear any obstacles to clearing the file. Any questions any Minister may have will be answered. If the Finance Minister wishes to make trouble, this process should outmanoeuvre him and we can expect a smooth passage of our file at the CCS.’’

In the same dispatch, he writes: “We think the Finance Minister is Okay now… At this time the whole team moved with every connection possible. If this team was not in place, the VIP (chopper deal) would never have been able to pass through this period.”

Interrogation records show that in response to questions on his access to CCS proceedings, Michel claimed this was mostly due to efforts of British diplomats. “I at no time accessed or used classified information of the Ministry of Defence to tilt the deal in favor of AgustaWestland. All I and my team did was to access information made freely available to us to enhance the transparency of the deal…,” he said.

In the second dispatch, he says that “without our political channel, Ambassador and Jeff Hoon (former British Defence Minister) we would have probably called their bluff, gone for escalation (of price) and lost the deal…”

During interrogation, Michel also detailed the purported Russian approach: “The Russians woke up. They had suddenly realised that they were about to lose the VIP (chopper deal). It was about to go through without them, so they launched a diplomatic and media attack.”

Confronted during questioning with a dispatch on April 10, 2008, the records show that Michel spoke about how the Russian competition was tackled. “The Russians thought they knew what they were doing and pushed India too far. It was deliberate on Russia’s side and it was no accident, except India meant what they were telling them and the Russians did not know that,” he writes.

According to records, Michel claimed that the Russian side also refused to give a bid bond or sign an integrity pact in order to avoid a “precedent”. Responding to questions, Michel claimed: “The Russians felt if they did that they would have to do it from there on and they wanted to be treated differently…someone, someone, very close to them who they trusted implicitly must have told them not to back down. So the Russians called India’s bluff and India threw them out…”

Speaking to The Indian Express, Michel’s lawyer Aljo K Joseph said that Michel’s trial “will only start after the investigation is completed”. According to him, “Michel is on hunger strike and his health condition is poor…Tihar jail will be giving medical assistance, if required.”

(Tomorrow: how the bribery case grounded other defence projects)