Along with Swiss national, Guido Haschke, and Italian executive Carlo Gerosa, Christian Michel, a British citizen who has spent years in Delhi, is accused of paying off Indian decision-makers to seal the deal for 12 AgustaWestland AW-101 helicopters in which the Indian Air Force (IAF) could ferry Indian leaders in security and comfort.
The Euro 556 million deal was worth Rs 36 billion at the exchange rate prevailing in 2010 and is worth Rs 45 billion at current rates.
In September 2017, the CBI charge sheeted former IAF chief, Air Chief Marshal Shashindra Pal Tyagi and three of his cousins: Julie Tyagi, Docsa Tyagi and Sandeep Tyagi. Charge sheets have also been fined against lawyer Gautam Khaitan, alleged middlemen Michel, Gerosa and Haschke, former AgustaWestland chief Bruno Spagnolini and Giuseppe Orsi, the former chief of Finmeccanica (now renamed Leonardo SpA). Orsi headed AgustaWestland (a Leonardo subsidiary) in 2010, when the VVIP helicopter sale was concluded.
The charge sheet alleges the accused caused a loss to the exchequer of Euro 398.21 million. It said bribes worth Euro 62 million were were routed through Tunisia, Mauritius and other tax havens. The CBI could file a supplementary charge sheet after interrogating Michel.
Besides the CBI, the Enforcement Directorate (ED) also filed a charge sheet in July against 34 Indian and foreign nationals, included those charge sheeted by the CBI.
The CBI, which extradited Michel from the UAE after a months-long legal battle there, claims it has established the money trail by which payment was made through two channels, totalling Euro 41 million. In one channel, Gerosa and Haschke allegedly bribed service officers and bureaucrats, routing money into India through payments for software bought from Chandigarh-based firm, Aeromatrix. In the other channel, Michel – who allegedly received Rs 295 crore in slush funds – paid off political decision makers and managed media reportage.
Seeking to establish a direct link to the Gandhi family, the CBI has produced a handwritten note – which Haschke claims Michel dictated to him – listing payoffs made to “The family” (purportedly the Gandhis) and to “AP” (purportedly Ahmed Patel, Sonia Gandhi’s political secretary).
In an interview to CNN-News18 channel earlier this year, Michel alleged the CBI was pressuring him to falsely name the Gandhi family as recipients of payments from him.
In fact, Indian police agencies came late to the AgustaWestland investigation. It first captured public attention on February 12, 2013, when Italian prosecutors in Milan capped a long investigation by arresting Orsi (then Finmeccanica chief), and raiding AgustaWestland’s Milan offices to establish whether senior Italian executives had violated anti-corruption laws by inducing India to buy VVIP helicopters.
The defence minister at that time, AK Antony, immediately ordered a CBI inquirty, slapped a show cause notice on AgustaWestland and withheld further payments. In 2014, the National
Democratic Alliance (NDA) government cancelled the contract and encashed AgustaWestland’s bank guarantees.
On February 15, 2013 Antony issued a 2,100-word “factsheet”, publicly explaining that the decision that enabled AgustaWestland to win the contract was taken in 2003 by the NDA government.
The “fact-sheet” stated that, on November 19, 2003, Brajesh Mishra – then Principal Secretary to Prime Minister Atal Behari Vajpayee – decided to lower the helicopter’s operational ceiling requirement from 6,000 metres (19,685 feet) to 4,500 metres (14,750 feet). AgustaWestland, whose AW-101 helicopter could operate from 4,500 metres but not from 6,000 metres, thus became eligible for the tender.
Antony’s “factsheet” also explained that Pranab Mukherjee, who was defence minister from 2004 till October 2006, decided to expand the purchase from eight helicopters to twelve.
The Italian case, after sputtering along for five years, has been dismissed by two courts and is now facing a final verdict from the Italian Supreme Court.
The Italian prosecutors were focused less on unearthing bribery in India, and more on the routing of slush payments to political parties in Italy. Orsi was known to be close to the right-wing party, Lega Nord (Northern League), and prosecutors suspected that, out of the payments earmarked for middlemen in India to push the AW-101 sale, Euro 10 million were instead funnelled back to the Lega Nord.