#dnaEdit: The Embraer deal

It looks like another defence deal scam is in the making. And interestingly, the report on the possible payment of bribes to a United Kingdom-based agent in the purchase of three Embraer jets worth $208 million equipped with Defence Research and Development Organisation (DRDO)’s AE&WC (airborne early-warning-and-control) radar systems for the Indian Air Force (IAF) comes from Brazil and the United States. The deal was finalised in 2008 when the United Progressive Alliance (UPA) was in power. The DRDO chief S. Christopher has said that it has asked for a report in the matter and it would react after receiving the report. But the ruling Bharatiya Janata Party (BJP) with its characteristic aggressiveness has fired the first political salvo in the matter. Union Minister for Telecommunication and Information Technology and senior BJP leader Ravi Shankar Prasad took the opportunity to attack the Congress as a corruption-tainted party. It was politics as usual and it would be difficult to blame the BJP for attacking the Congress on the issue. It is significant that Union Defence Minister Manohar Parrikar did not respond, and Mr Prasad did not speak as a minister but as a party leader because he used the party office to criticise the Congress in the matter.

There is, however, a need to get the big picture of the issue. It is not just the Indian deal that is under the scanner though it is understandable that the BJP and everyone else wants to see it that way. The payment of bribes involves Saudi Arabia and other countries as well. It is one of the employees of the jet manufacturer who seemed to have played the role of the whistle-blower, and the Brazil government is probing the matter. The United States Justice Department too is looking into the issue. The Americans have stepped in because some of the bribes might have found their way into bank accounts in the United States. So, the issue is more complicated than it appears to be. While the BJP can use the Embraer deal as a stick to beat the Congress with, there is need to step back and look at the whole business of defence procurement yet again. There is need to recall the AgustaWestland helicopter deal, which came to light because of internal inquiries. It would be difficult to view the issue of corruption in defence deals without bringing in partisan politics, but it is becoming clearer by the day that there is need for a multi-lateral initiative as is being done in the case of terror finance. It might be difficult for national governments to agree on a multi-lateral initiative because defence deals are sensitive and involve national interests. 

It would be useful to remember that multi-national corporations doing business across national frontiers and dealing with different national governments are involved in deals which are not above board. Wal-Mart has been caught on the wrong-foot in several instances, especially in India and Mexico, and it had come to light because of internal inquiry. There is then a need in India for all political parties and other stakeholders to recognise that corporate corruption is a big problem, and it has to be addressed in a broader manner. It is tempting for the BJP and the Congress to accuse each other of turning away from corporate corruption, but it does not help in combating the danger. Global capitalism brings with it advantages and problems, and one of the problems is corporate corruption.