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AGUSTA WESTLAND

THE DEAL
The story and scandal behind the Rs 3,546 crore deal for VVIP choppers that is under probe on corruption charges in Italy, reports MANU PUBBY

Contents
Indian helicopter deal sparks corruption row in Italy Antony orders probe into VVIP copter deal VVIP helicopters: Italian firm says deal above board India helicopter deal: Italy probes Euro 51 mn ‘payoff’ Antony seeks report on Italy chopper deal investigation Italian under probe was active in Indian defence sector Consultant in chopper deal held in Europe Get probe details from Italy, Antony tells officials in MoD Italy probe focuses on UK consultant Lens on chopper firm’s India head over commission Army officer sought $5 mn bribe: Italy probe Ex-IAF pilot among 3 Indians named in VVIP helicopter probe MoD asks Italy for info, promises strong action In taped conversations, middleman talks about his unnamed Indian boss Indian officials are ‘morons’, will take years to track links, middlemen said ‘I will tell Indian judges I spent 10-15 million euros on ballerinas, champagne’ Chopper deal kickbacks: 'India changed tech requirements to help Italian firm' Records confirm tender was altered, allowing AgustaWestland to qualify Chop-a-deal
PHOTOGRAPHS COURTESY : www.agustawestland.com

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Indian helicopter deal sparks corruption row in Italy
probe by Italian prosecutors into allegations of corruption against state-backed defence major Finmeccanica has cast a shadow over a multi-million dollar deal that the company signed with India for 12 VVIP helicopters. The Italian attorney general’s office began a probe last year into alleged unethical dealings by the company, which has now widened to include the Rs 3,546-crore contract with India, reports from Italy say. Finmeccanica subsidiary Augusta Westland signed the deal with the Indian Air Force in 2010. La Repubblica reported that the deal is being investigated, and that a senior company official, Lorenzo Borgogni, has told prosecutors that slush funds were generated after a “sudden” escalation

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of price by 10 million euros in 2010. While it is not clear whether kickbacks were paid in India, the money was allegedly used by a top Finmeccanica official to bribe Italian political parties. Augusta Westland is one of Finmeccanica’s most profitable subsidiaries. Another subsidiary, Selex Sistemi Integrati, which is also under investigation, recently won a 10 million-euro contract to supply radars and other equipment for India’s first indigenous aircraft carrier under construction in Kochi. Augusta Westland won the contract for the choppers — to be used by the President, Prime Minister and other top government functionaries — after its AW 101 edged out Sikorsky’s S-92 Superhawk.

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Antony orders probe into VVIP copter deal
day after The Indian Express brought to light allegations of corruption against Italian defence manufacturer in a deal to sell 12 VVIP helicopters to India, Defence Minister A K Antony on Friday ordered a probe into the matter. Sources said that Defence Secretary Shashi Kant Sharma has been asked to look into the allegations of corruption in the Rs 3,548 crore deal that was inked in 2010. The probe by the defence ministry has been ordered after it came to light that Italian prosecutors are investigating allegations of corruption against state-backed defence major Finmeccanica. The probe is part of a widening investigation into malpractices in the firm that has shaken Italy. Reports from Italy suggest that slush funds were generated after a “sudden” escalation of price by 10 million euros in 2010. While it is not clear whether kickbacks were paid in India, the money was allegedly used by a top Finmeccanica official to bribe Italian political parties. “The minister has asked the defence secretary to look into the matter. These allegations are a matter of concern,” an official said. While there has been no probe into the matter by Indian authorities yet, the deal had come under a shadow in 2009 when the Finance Ministry had objected

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to the steep price of the chopper and the elimination of the other contender that made it a single vendor situation. India had signed the deal to 12 choppers, eight of which would be used for VVIP transportation and four for other operations. The procurement was to replace the Mi-8/17 helicopters that are currently used to fly VIPs like the President, Prime Minister and visiting dignitaries. In 2010, Defence Minister AK Antony had said that the Finance Ministry scuttled a mega tender to procure mid air tankers to support fighter operations but cleared another contract to procure the VVIP choppers because of the ‘changed security scenario’. While several questions had been raised on the high price being quoted for the deal, Antony had said that the Finance Ministry supported the helicopter deal after the Special Protection Group insisted that new choppers are required because of the changed security scenario. “Not only the Air Force but the SPG also was involved. They told us due to the security scenario, we should consider this proposal and the Finance Ministry also agreed to take their comments and it was cleared in the Cabinet Committee on Security,” he had said.

VVIP helicopters: Italian firm says deal above board

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ays after Defence Minister A K Antony ordered a probe into allegations of corruption in a deal to purchase VVIP helicopters from AgustaWestland, the Italian firm has asserted that there was no “irregularity” in the deal and that it has not received any notice of an

investigation into the EUR 560 million contract. In a statement issued on Monday, Finmeccanica, the holding company for the Italian firm, has said the contract was signed in 2010 after almost two years of negotiation and there was a “reduction” in the final price as compared to the original

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offer. The statement came even as reports from Italy suggested that investigators have “informally” approached India for details of the contract that was signed in February 2010 as part of the widening probe into unethical practices by Finmeccanica to win contracts. Italian newspaper Il Messaggero reported on Monday that as part of the investigations, requests have been made “informally to Indian authorities”

for confirmation about the negotiations that led to the signing of the contract. However, sources here have said that they are not aware of this development. As first reported by The Indian Express, a probe by Italian prosecutors into allegations of corruption against state-backed defence major Finmeccanica has cast a shadow over a multi-million dollar deal that the company signed with India for 12 VVIP helicopters.

India helicopter deal: Italy probes Euro 51 mn ‘payoff’
n its biggest ever corruption probe into defence agreements, Italy is investigating whether a commission of 51 million Euros was paid by helicopter manufacturer Agusta Westland to a Switzerland-based consultant for a deal to sell 12 VVIP helicopters to India. Reports from Italy say that investigators have raided the offices of the consultant, Guido Ralph Haschke, in Switzerland after a former top employee of the helicopter company revealed that he was hired to “facilitate” the Rs 3,546-crore deal with India.

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Haschke is well-known in the close-knit defence business circles in New Delhi. He is know to make frequent trips to India and is very familiar Italy probes 51 m Euro ‘payoff’ to agent for copter deal with India with how the defence sector works. The 62-year-old consultant is believed to have dual citizenship of Switzerland and the US. For India, the investigation can have bigger ramifications if it is established that an agent was indeed hired by the company to facilitate the VVIP helicopter contract. As per Indian laws, it is illegal for companies to hire agents for defence contracts.

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After The Indian Express reported about the Italian investigations in February, the Defence Ministry had instructed the Indian embassy in Rome to follow the probe and report back. Haschke was also associated with the Emaar MGF group and as per SEBI records, was on its board of directors in 2009 and has been listed as an ‘Independent and Non Executive Director’ and Business Consultant. However, he is also mentioned to have resigned from the directorship the same year due to “personal reasons”. Italian investigators are reported to have acted on the testimony of Lorenzo Borgogni, the former head of external relations of Finmeccanica — the parent company of Agusta Westland — in which he has alleged that Haschke was initially hired as an “intermediary” for a sum of 41 million Euros. This “compensation” was alleged to have been hiked at the last minute by 10 million Euros. As per reports, Italian investigators are focus-

ing on this escalation of 10 million Euros, that was allegedly used by the helicopter company officials to bribe Italian political parties for plum postings. Several documents regarding this agreement are reported to have been recovered by prosecutors who raided Haschke’s offices in Lugano, Switzerland.

THE DEAL
The VVIP chopper contract was won by Agusta Westland in February 2010 after its AW 101 helicopters ousted Sikorsky’s S-92 Superhawk in the contest to supply 12 helicopters that would be used by the Indian PM, President and other senior government functionaries. The value of the deal was revealed as Rs 3,546 crore by the Indian government. The Italian helicopters are set to join the increasing fleet of VVIP aircraft that already comprises five Embraer 135 jets and three Boeing VVIP aircraft.

Antony seeks report on Italy chopper deal investigation
day after The Indian Express reported details of an Italian investigation into commissions allegedly paid for the procurement of 12 helicopters sold to India in February 2010, Defence Minister A K Antony asked for a fresh report on the matter. His ministry said any wrongdoing would attract the strict integrity clause. Antony has directed ministry officials to obtain a report from the Indian embassy in Rome into the investigations — reported widely in the Italian media — into the role of Switzerland-based consultant Guido Ralph Haschke, who allegedly received a commission of Euro 51 million (over Rs 350 crore) for the Rs 3,546-crore Indian deal. “I will seriously pursue the inquiry,” Antony

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said, adding that he had asked for reports in February as well. The matter was first reported by The Indian Express then. In a statement today, the ministry said: “Precontract integrity pact has been signed between (manufacturer) Agusta Westland and MoD. Any complaint or allegation will be investigated and contractual provisions invoked, in case any wrongdoing is established, in addition to action that may be required under law.” Agusta Westland denied any “irregular conduct”, which it said was “confirmed by a recent investigation by the Indian Ministry of Defence”. But the ministry made no mention of this. The BJP today demanded to know “what the government is doing in the matter”.

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Italian under probe was active in Indian defence sector

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he consultant whose offices in Switzerland were raided earlier this week by Italian authorities as part of a probe into corruption in a copter deal with India is an “offsets expert” who has been very active in the Indian defence sector. Guido Ralph Haschke, who claims to provide ‘Project Advisory Services’, has in the past few years worked with several Indian companies and individuals either interested in investing in Italian entities or hoping to forge offset partnerships with foreign firms that have won Indian defence contracts. He was also briefly on the board of directors of real estate giant Emaar-MGF. As reports from Italy indicate, investigators are probing an alleged Euro 51 million contract that Haschke got from Finmeccanica — the parent company of Agusta Westland that sold the VVIP choppers to India — reportedly as “offsets plan” for the Indian deal. The allegation is that Euro 10 million from this was pumped back as slush fund and used to bribe Italian politicians. Italian investigators are following leads provided by a former top employee of the company, who used to handle international relations. The Italian probe has again brought into question offsets contracts for the Rs 3,546 crore deal. As per the rules of defence procurement, foreign firms are obliged to invest more than 30 per cent of the value of any deal they bag into the Indian defence sector — either public or private. In case of the helicopter deal, Agusta Westland has to invest over Rs 1,000 crore in the Indian defence production sector. Earlier, the offsets package for the VVIP

deal was alleged to involve indirect and illegal offsets in violation of rules. The offsets have been complicated by the fact that the AW 101 chopper provided by Agusta Westland is a civilian variant — making it hard to invest money in the form of offsets into the defence sector in India. Insiders say not just in the offsets contract, Haschke had been active since the deal with India was inked in February 2010 and had been meeting Indian companies and investors. He was believed to have been working on behalf of Agusta Westland. Finmeccanica refused to comment on its relationship with Haschke, telling The Indian Express that it was unable to offer any view as “the matter is under investigation”. Haschke too did not comment on the matter. Well-know in closeknit defence business circles of New Delhi, Haschke is the managing director of more than seven consultancy companies based in Europe. He is also the chairman of a Luxembourg-based company, Jorissa SA. His listed business address in Lugano, Switzerland, was among those raided by Italian investigators. Educated in Milan, Italy, the 62-year-old consultant is believed to hold dual citizenship of Switzerland and the US. The company says it is in “no way connected with him or his businesses anymore”. “Since his resignation, Emaar MGF has had no business links or association with him in any capacity. He did not attend any board meeting during his appointment and, therefore, never participated in any company decisions,” a spokesperson told The Indian Express.

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Consultant in chopper deal held in Europe
olice in Switzerland have arrested a man who was raided by Italian authorities this year for allegedly taking a suspicious 51 million-euro commission in a deal to sell a fleet of high-end helicopters to the Indian government. Guido Ralph Haschke, a 62-year-old consultant who claims to provide “Project Advisory Services”, was arrested on Friday on charges that include money laundering. The Italians suspect he got the multi-million euro commission from helicopter manufacturer AgustaWestland to influence politicians and decision makers in Italy and India. India had in 2010 signed a Rs 3,546 crore deal with AgustaWestland to purchase 12 AW 101 choppers for use by VVIPs including the President and Prime Minister. Reports from Italy over the weekend said investigators have asked the Swiss for Haschke’s custody. Haschke is active in the Indian defence sector, and is a director in a Chandigarh-based firm called Aeromatrix, an “engineering and design support services organization” that works in areas that include aerospace. He was earlier on the board of Emaar MGF as an independent and non-executive director. The Indian Express reported in April that Haschke has over the last few years got involved in the Indian defence offsets business, and has had dealings with several Indian firms and individuals in the military business. Aeromatrix, which has 82 per cent foreign holding and claims an authorised capital of Rs 75 lakh, lists an Italian businessman called Carlo Gerosa as another of its directors. It has emerged that investigators secretly recorded a conversation between Gerosa, Haschke and two other individuals while there were travelling together in a car near Geneva in Switzerland.

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This conversation, which is among several other recordings and phone intercepts that have been placed in court by the Naples-based prosecutor probing the case, allegedly contains extensive references to the Indian helicopter deal, and names of Indians and Italians who were allegedly involved in “facilitating” it. The conversation reportedly also refers to payments of over 20 million euros allegedly made to various parties. Haschke reportedly talks about the money being routed through Mauritius and Tunisia, making it very difficult for investigators to trace. The Indian Express reported in April that the Indian defence ministry has asked New Delhi’s embassy in Rome to keep track of developments in the case. It is now likely to ask for an updated report.

BACKSTORY
IN February 2010, AgustaWestland won a Rs 3,546 cr contract for 12 AW 101 helicopters beating Sikorsky’s S-92 Superhawk. The helicopters were to join, in 2012, India’s VVIP aircraft fleet which already has five Embraer 135 jets and three Boeing VVIP aircraft. EARLIER this year, Italian investigators began probing allegations that AgustaWestland paid a commission of 51 million euros (over Rs 350 crore) to Switzerland-based consultant Guido Ralph Haschke to facilitate the India deal. INVESTIGATORS are acting on the testimony of Lorenzo Borgogni, a former top executive of Finmeccanica, the parent company of AgustaWestland. They are focussed on allegations that the helicopter company bribed Italian political parties and paid commissions in India.

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Get probe details from Italy, Antony tells officials in MoD

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he probe into corruption charges by the Italian authorities into a contract for VVIP helicopters for India has taken a serious turn with the Defence Ministry being instructed to get details of the investigation from Rome. Sources said Defence Minister A K Antony has now instructed officials to write to Italian authorities, requesting for information about the ongoing probe into the 2010 contract in which India had ordered 12 VVIP helicopters in a Rs 3,546-crore deal. As first reported by The Indian Express, the deal had come under the scanner for corruption allegations and Italy has been investigating the role of two alleged middlemen who took a commission from Agusta Westland to influence government officials. With fresh reports indicating the case has progressed beyond the initial stage and that Italian authorities are probing the role of Indians in alleged malpractices, the defence ministry has decided to write to the Italian government. This marks a stronger interest in the case by the

Defence Ministry, given that in the past it had just instructed the Indian embassy in Italy for a report on ongoing investigation. The embassy report had earlier this year said there were no indications that the probe was specifically against the Indian chopper contract. However, recent developments that include the testimony given by Italian prosecutors in court, have confirmed that the investigation pertains mainly to the Indian helicopter contract. Defence Ministry officials said the reports are being taken seriously but refused to comment on what penal action is possible against the manufacturer, in case discrepancies are found. While the first of the 12 helicopters on order are expected to join service next month, the ministry can invoke clauses of the integrity pact that is standard for all defence contracts. According to the pact, bank guarantees can be impounded if graft charges are proven in the contract and a hefty fine can also be imposed. An offending company may also be blacklisted in case of serious charges.

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Italy probe focuses on UK consultant

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he Italian probe into corruption charges in the VVIP helicopter deal for the Indian Air Force is now focusing on a highly connected British consultant who was allegedly hired by the chopper manufacturer, Agusta Westland, to influence the contract. The consultant, identified as Christian Michel, is being investigated for receiving a portion of the Euro 51 million contract that was given by the manufacturer for Italian businessman Guido Haschke, who had been arrested last week by the authorities in Switzerland in connection with the case. The name has generated controversy here as Michel is a little known but highly connected consultant who has been very active in the Indian defence sector for the past several years and is known for his links within the Indian government establishment. Sources said Michel has been associated with Agusta Westland set up in India for the past few years and is still actively involved in the Rs 3,546crore VVIP helicopter deal that was signed in 2010. The consultant is known for regularly visiting New Delhi where is in regular touch with Agusta Westland officials. British citizen Michel has been named as “one of the two mediators” in the deal by Italian prosecutors, according to media reports from Italy. The

line of investigation being followed, reports say, is that Agusta Westland initially paid Haschke Euro 41 million as part of a contract for the Indian deal but this was increased by Euro 10 million with Michel coming into the picture. Michel’s role in both Italy and India is under investigation. For the Indian defence establishment, Michel is a name that came to prominence in a controversial case that was filed in French courts in 2004 in which he had sued aircraft manufacturer Dassault for allegedly not paying him a share in a contract to sell fighter aircraft to the Indian Air Force. Michel, who was the owner of a Panamanian company, Keyser Incorporated, had taken Dassault to court, alleging that the manufacturer had failed to pay him a commission for the purchase of 10 additional Mirage 2000 jets at a cost of Euro 350 million by the Indian Air Force in September 2000. The lawsuit was however struck down as the courts held that the contract to share commission between Michel’s company and Dassault had expired two years prior to the signing of the contract with the Indian Air Force. With the Defence Ministry now requesting Italy for sharing of information on the ongoing probe into the VVIP helicopter deal, the role of the British consultant and his contacts in India are likely to come under scrutiny.

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Lens on chopper firm’s India head over commission

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he India head of helicopter manufacturer Finmeccanica, which is being probed for alleged corruption in a deal to sell VVIP choppers to the Air Force, has come under the scanner of Italian authorities who tapped his phone conversations with the alleged middleman in the Rs 3,546 crore contract. Italian prosecutors, who have been investigating a series of corruption charges against Finmeccanica, tapped the phone of alleged middleman Guido Haschke as part of the probe into the deal and have informed the court that they found strong clues that a part of the commission paid was routed through Mauritius and Tunisia. Investigators also claim to have taped conversations between Haschke and unnamed Indian individuals. Details of the Italian probe into the deal are contained in a 100-page court order issued by the Tribunal of Naples Tuesday on the detention of former commercial director of Finmeccanica, Paolo Pozzessere. The Indian defence ministry has so far only sought ‘reports’ on the probe in Italy from the embassy in Rome. While the court order, a copy of which is with The Indian Express, mainly focuses on Pozzessere’s dealings in selling military equipment to Panama and Brazil, a section is devoted to the controversial Indian deal for 12 helicopters. In this section, the court has noted that Italian investigators are probing allegations that Swissbased consultant Haschke was paid 51 million euros to swing the Indian deal and that a part of it 10 million euros - was routed back to Italy and distributed to a political party. However, responding to the court order, Finmeccanica said in a statement that the group or any of its companies “have not paid any form of compensation for mediation connected” with the

contracts in question. It has said that Pozzessere stood aside as commercial director of Finmeccanica Group in September 2011 and had since been assigned a role in Russia, as part of industrial activities relating to partnerships in the regional aircraft and defence electronics sectors. While the court document does not have any details about investigators having evidence that money was also paid to Indian officials, it says the prosecutors tapped phone conversations of Haschke with the India head of the Finmeccanica, Girasole Paolo, as well as some unnamed ‘Indian individuals’. “Thanks to phone taps between Haschke and his partner Gerosa Carlo and other Italian and Indian individuals including Director Finmeccanica India Girasole Paolo, elements were found that the money was routed to Tunisia and Mauritius,” the document says. As reported by The Indian Express earlier, Haschke and Carlo are partners and jointly run the Chandigarh-based services company Aeromatrix that specialises in aerospace among other sectors. Haschke was on the board of Emaar MGF in the past and is known for his connections in the Indian military sector. The court order dwells on the Indian VVIP helicopter deal probe as part of the evidence against Pozzessere, who was in charge of foreign sales. “With reference to the supply of 12 Agusta Westland VVIP helicopters to the Indian government, accusations have emerged from the interrogation of Borgogni Lorenzo (a former employee) that Guido Ralph Haschke obtained 41 million euros for mediation, which is forbidden by Indian law,” the order says. It goes on to say that the allegation being probed is that the 41 million euros fees was increased to 51 million euros allegedly to create

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‘black funds’ and route it to Italian political parties, “especially to Lega Nord”. Investigations into alleged corruption in the deal picked up pace last week with the the arrest of Haschke, who has since been released on bail. Haschke, who advertises himself as providing ‘Project Advisory Services’, was arrested by Swiss authorities for money laundering and other charges. Educated in Milan, the 62-year-old consultant has dual citizenship of Italy and the US. He was believed to have been working on behalf of Agusta Westland which won the VVIP chopper deal in 2010 in an international competition for new generation helicopters that would be operated by the IAF. Another ‘middleman’ who has come under the scanner of Italian authorities is Christian Michel a little known but well-connected British consultant who has been very active in the Indian military business.

What the Italian court document says Investigators are probing allegation that commission of 51 mn euros paid for Indian VVIP chopper deal of 2010 Illegal commission paid to Switzerland-based consultant Guido Haschke Haschke was in touch with Girasole Paolo, India head of choppermaker Finmeccanica TAPPED phone conversations between Haschke, Paolo and unnamed Indians suggest that commission money was routed through Mauritius, Tunisia VVIP chopper deal In February 2010 Agusta Westland won a Rs 3,546 cr contract to supply 12 AW 101s after beating Sikorsky’s S-92 Superhawks. The helicopters were set to join this year a fleet of aircraft used by the PM, President and other senior government functionaries. Earlier this year, investigators in Italy began a probe into alleged corruption by AgustaWestland in securing deal.

Army officer sought $5 mn bribe: Italy probe
talian investigators probing suspected graft in the AgustaWestland VVIP helicopter deal with India say they have found what they believe are documents of another tender for Army helicopters that claim an Indian Army brigadier demanded a bribe of $5 million to swing the contract for the firm. A ‘memorandum’ seized from the home of alleged middleman Guido Haschke by Italian prosecutors says the brigadier, who was in charge of the flight trials of a contract for 197 light choppers, asked for the money in January 2010, days before the trials began. The “highly confidential” letter is part of a preliminary chargesheet filed by Italian prosecutors in

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a Naples court. The letter and other documents were allegedly seized on April 23. The letter claims the brigadier “made contact” in Bangalore on January 16, 2010 and volunteered information on the progress of the contract. He allegedly shared details of the deficiencies found in the competitors for the contract — Russia’s Kamov, Italian AgustaWestland and Eurocopter — and asked for the money to slant the trial in Agusta’s favour. “If an agreement is struck, the issues above will become irrelevant. Furthermore, the trials will be conducted in such a way as to favour his sponsors. His request is 0.5 per cent, equal to approximately USD 5 million, payable upon release of the final technical report if contents are as promised,” the

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letter says. The Army refused to comment, saying it is not aware of the letter or its contents. AgustaWestland was eventually disqualified from the bid in May 2010. The Army went ahead with trials involving Eurocopter and Kamov. The defence ministry expected to take a final call on the deal this month.

The seized letter details the “meeting” with the brigadier and says he “offered his services to help eliminate the competition on technical grounds”. “He is very keen on this as it is his last major assignment before retiring,” it says. “He has requested a reply by tomorrow Jan 19. We have said... we will give a final answer by close of business Wednesday Jan 20,” it letter says.

Ex-IAF pilot among 3 Indians named in VVIP helicopter probe

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hree Indians are among 15 people being probed by the Italian police in connection with the suspected payment of bribes and money laundering in the deal for VVIP helicopters for the Indian Air Force from AgustaWestland, a preliminary report submitted to a court in Naples has said. The 568-page report, a copy of which is with The Indian Express, contains extensive details of the investigation into the Rs 3,546 crore deal and covers several businessmen, consultants and employees, including Indians. While the probe is still on, a preliminary inquiry report was given to the Naples Tribunal in July. Besides alleged middlemen Guido Haschke and Christian Michel, the report given to the Naples court names Praveen Bakshi, the chief officer of Chandigarh-based firm Aeromatrix, Gautam Khaitan, a Delhi lawyer who represents Aeromatrix, and Sanjeev Kumar Tyagi, a Delhi businessman and former air force pilot, as those being investigated. Aeromatrix, a services company which specialises in aerospace, among others, is owned by Haschke and his partner Carlo Gerosa, who is also being probed. The report, which includes intercepted phone calls and transcripts of conversations

recorded through bugs planted on Haschke, makes a strong case for investigating allegations that politicians and officials were bribed in Italy and India to ensure the deal goes through. It has several references to the above mentioned names in phone conversations and other recordings. The report says Girasalo Paolo, the India-head of the helicopter company, is also being probed. Bakshi and Khaitan, when reached for their comment by The Indian Express, denied they had any role in dealings related to the defence business. Bakshi said he is an officer of the company performing administrative roles and heard about the VVIP helicopter deal only from media reports. Khaitan, who is currently abroad, said he was in touch with Haschke as his attorney and is in no way involved in or aware of any defence dealings. Tyagi could not be reached for his comment. The report says the probe is focusing on: “A) Alleged corruption perpetrated by some top managers of the subsidiaries, through bribes (also international bribes) paid by Finmeccanica and its subsidiaries to win tenders in foreign countries and B) other practices involving top managers of Finmeccanica subsidiaries and some political parties and their leaders, who were recipients of

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‘dirty’ money coming from operations in point A.” AgustaWestland is a subsidiary of Italian conglomerate Finmeccanica. The interrogation of a former senior employee of AgustaWestland, corroborated by phone interceptions, bugs in cars and houses of the suspects and seized documents indicate that a “criminal conspiracy” was hatched to commit crimes like “international corruption, money laundering and illicit funds to political parties”, the report says. Phone records produced as evidence in court has several references to alleged bribe money being transferred or hidden by Haschke. “AgustaWestland is believed to have paid the mediators a commission of 41 million euros which later became 51 million,” the report says,

adding that Lorenzo Borgogni, a former senior employee of the company claimed that two agents were hired to push the India deal. “In particular, Borgogni talked about international commercial operations and especially about the supply of 12 helicopters from AgustaWestland International Ltd. to the Indian government thanks to the mediation of Guido Ralph Haschke and Christian Michel. Indian law does not allow any compensation for mediators,” the report says. Incidentally, when the helicopter deal probe was first reported by The Indian Express in March this year, Defence Minister A K Antony had informed Parliament that “no specific probe is being conducted about India-related transactions” by Rome.

MoD asks Italy for info, promises strong action
day after The Indian Express reported that Italian investigators had stumbled upon documents that claim an Indian Army brigadier demanded a $5 million-bribe to swing a deal for army helicopters, the Defence Ministry said Friday that it has written to Rome requesting information on the alleged involvement of the officer. Referring to a series of reports in this newspaper about the suspected corruption in the VVIP chopper deal, the ministry issued a statement saying the Italian government has been asked for an early response to its request for information about the probe there. It also said that “strong action will be taken against the offenders detected through this probe”. Sources said Defence Minster A K Antony is “very concerned” about the corruption allegations. “In response to media reports alleging irregu-

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larities in the contract for 12 helicopters from AgustaWestland for VVIP use, the ministry of defence has once again taken up the matter with the Italian government through the ministry of external affairs and has asked for an early response on the issue,” defence ministry spokesperson Sitanshu Kar said. Separately, AgustaWestland also denied any wrongdoing. “AgustaWestland has not committed any form of irregularity during the tender for the supply of AW101 helicopters to the Indian defence ministry,” it said in a statement. The ministry, which in the past said it would not react to media reports on the issue, has also asked Italy to clarify if the role of middlemen in the deal has come through. “The Italian government has been requested to provide details of the existence, if any, of any middlemen or any individual or Indian entity in the above mentioned contract,” Kar

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said. The Italian probe has referred to the role of two middlemen, Guido Haschke and Christian Michel, in the Rs 3,546 crore deal. While Haschke was arrested in Switzerland and has since been released, Michel is yet to be questioned. On the letter found by Italian investigators referring to a deal for light helicopters for the Indi-

an Army, the ministry said that details have been requested. “The MoD has asked the Italian government and concerned agencies there through MEA to provide the name and relevant documents relating to the alleged involvement of a brigadier in the ongoing process for the acquisition of 197 light utility helicopters for the Indian Army,” the statement said.

In taped conversations, middleman talks about his unnamed Indian boss

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he alleged middleman in the VVIP helicopter deal with Italy has admitted in taped conversations that he laundered money in India and talks about an unnamed Indian from whom he takes orders. The consultant, Switzerland-based Guido Haschke, also expressed surprise in his conversations with colleagues that investigators found out the “correct amount” of commission that was allegedly paid for the deal. A conversation also reveals that he had an earlier agreement with

AgustaWestland for 5 per cent commission for deals with an unknown Indian associate. In a preliminary investigation report that runs into 568 pages, Italian investigators have detailed hundreds of hours of taped conversations in which Haschke and his business associates are heard to be speaking about commissions in the helicopter deal and ways that money would be laundered in India. In some conversations, Haschke and his partner Carlo Gerosa comes tantalisingly close to revealing

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the name of a person in India from whom they take orders. While the name has been recorded by the investigators, the transcripts of the conversation that are contained in the report list it as “incomprehensible”, possibly due to unfamiliarity with Indian names. Consider this conversation that was recorded in Haschke’s car (number TI304420) on March 3. Gerosa: They just need to say: I take orders (incomprehensible). I take orders from (incomprehensible) there in India, but we can’t tell this openly to Gautam (Khaitan, their Indian lawyer). Haschke: He knows it very well. G: He is our borderline. The orders of money laundering came from us, but he was doing the real job.We are a real criminal association/conspiracy. G: (incomprehensible) H: Yes, I was thinking about it earlier. Because if Gautam fears that Aeromatrix (Haschke’s Indian firm) might be involved, he already told me... you heard no? Praveen (Bakshi, the chief officer of Aeromatrix) is already very nervous G: And Praveen is the only one who has nothing to worry about. While the Italian probe is still on, the taped conversations point to a “criminal conspiracy” to fix the Indian deal. From the taps it emerges that AgustaWestland paid Haschke and Gerosa 20 million euros as a commission for mediating in the 12 helicopters deal with India (rest paid to Michel). It shows how the payments are made in favor of Tunisian companies managed by the two Swiss men, Haschke and Gerosa, and then from Tunisia again routed to India and Mauritius in favor of companies (Aeromatrix) managed de facto by Haschke, Gerosa and Indian partners, the Italian investigation report says. The report says that out of the Euro 51 million commissions, a majority part was allegedly diverted to British consultant Christian Michel, who is also under investigation. In this March 5 conversation between Haschke and Bruno Spagnolini , CEO

of AgustaWestland, Michel is discussed. Haschke: Sir, I with Chris (The report explains that they are referring to Christian Michel `the other mediator who got 30 million’) it has been a long time since we heard from each other. I mean, voluntarily. I wonder if I should call him about this matter Spagnolini: No no no no no. H: And that things go. S: I also have his contact. H: Exactly. S: Let’s see, I don’t know, I don’t think that. H: Yes, if there’s a need, you let me know. I hope that (incomplete).. Haschke has been recorded as being very surprised that the commission amount became known to investigators. Consider this conversation that was also recorded on March 5 between Hascke, Bruno Spagnolini , CEO of AgustaWestland and a third executive called Digennaro in which they discuss the Euro 51 million commission revelations. Digennaro: I mean, what surprises... Hashke: It’s the amount. Digennaro: It’s the amount and the precision. Haschke: That is what worries me. Spagnolini: No actually, about the amount, frankly speaking, I didn’t know. Because I came later, no? That is something that happened before, when that other man was called. I have never known all the amounts. Until we met over that lunch, remember?Hachke: Yes and that was the amount. This is what worries me. Spagnolini: That was the amount. Haschke: That was the amount. The taped conversations also have a reference to a contract with an ‘Indian counterpart’ for the VVIP deal by Haschke who says that he has figured out his ‘official position’ on the matter after sitting down with AgustaWestland lawyers. This conversation was in February this year: Haschke: In any case, we have already decided, together with AgustaWestland lawyer, which is our position, which is: Yes, initially I went there (to

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India) to make proposals about this VVIP deal, but I was told that in India you can have no aid/assistance, therefore the original 5 per cent contract was not effective because it was not signed by the... (Someone asks if the contract has been found by Italian investigators) Haschke: No, they haven’t found it. They haven’t seized any offices, but even if they find it, that contract is not valid because it was not signed by the Indian counterpart and anyway it expired much before the present contract.

Haschke: What was my role? Because I said ok, you don’t need my services fine, so I thought why can’t I outsource a portion of the work to Indian companies, and so I first worked for IBS (IDS) andAeromatrix and I was paid by them and not by AgustaWestland. This is the official version . There are several more references in the report to Haschke’s role with AgustaWestland, his conversations with top executives of the company as well as Indian connections. The tapes show that Haschke stopped travelling to India since February after his name appeared in the case.

Indian officials are ‘morons’, will take years to track links, middlemen said

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he alleged middlemen in the AgustaWestland VVIP helicopter deal bragged that even if Indian investigators probed their role, they would find no money trail as the payments were made in cash, and that they would not be able to identify Sanjeev Kumar Tyagi as the person behind the affair, taped conversations that are part of an Italian judicial report reveal. In a conversation between business partners Guido Haschke and Carlo Gerosa, the name of Tyagi — a Delhi-based businessman who is also known as Julie — comes up as the duo talk about payments being made in cash for the 2010 deal to procure 12 VVIP helicopters, and brag that Indian prosecutors would never be able to prove the corruption. A part of the 568-page report records Gerosa as saying that “the only one who is safe from judicial consequence is Julie as they (Indian investigators) are morons and that there is no link”. Tyagi, who claims to be a former Air Force officer but was not actually commissioned into the Force, is a Delhi-based consultant with an office in the city’s upmarket Ferozeshah Road area. He is believed to be active in the government sector,

particularly power. The following conversation that was recorded on March 1 between Haschke and Gerosa: Haschke: The important (thing) is that my name does not leak. Gerosa: Eh mine too. You are the first ring. H: Understood. G: If the first rings breaks I also come into the picture. H: Let’s try to avoid that the first rings breaks, first of all! G: We all agree. H: And in the meantime we go on with the job. G: The only one who has no risks is Julie, because we are those in the front. G: There is really no link there because, I mean... cash. H: Exactly, so they (the judges) will never be able to prove that corruption was there. They can say that engineering was expensive, though it is not even that expensive, but they can never say corruption was there. This is the essence. Italian investigators conclude from the longwinding conversation that Gerosa was afraid that Indian investigators could get some clues that cor-

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ruption took place for the Rs 3,546-crore deal. “Haschke says they can claim that the engineering was expensive and nobody can ever say corruption took place. Gerosa disagrees and says there are some clues, Haschke says with clues you can be remanded but you cannot be sentenced. Gerosa says it just needs the judge to be convinced that corruption took place, it is not important if you have the proof of how much was paid and to whom,” the report says. The two Italian consultants, who were extensively trailed, tracked and bugged by investigators, also brag about the fact that the commission paid has been routed through Mauritius and that it would take Indian sleuths years to track it down as they did not know about the Mauritius link. The duo express fear that their lawyer, Gautam Khaitan, may also get arrested if money laundering was probed. Here is another conversation that also took place on March 1:

Gerosa: It’s clear that if money is no longer there, it must have gone somewhere, don’t we want to say where? In this thing even Gautam will go inside (behind bars) because (incomprehensible) Mauritius. You know when the letter of request will reach Mauritius? (incomprehensible) If they wanted... (incomprehensible)... with the letter to Mauritius (incomprehensible).... Haschke: Before they send the letter to Mauritius, they have to understand it went there (the money). And to understand it went to Mauritius they first have to send a letter of request to Italy, then to Tunisia and then, maybe, in 10 years.... Italian investigators have also stumbled upon several Indians involved in the deal but have somehow not named them in the preliminary report. In one instance, the investigators summarised they learnt from shadowing Haschke and Gerosa as well as the conversations that were tapped THAT ....

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“Following press articles regarding the corruption over the 12-helicopter deal (in The Indian Express), they talk, revealing some minute particulars regarding the sale and some people including Orsi, Spagnolini, Haschke, Gerosa and other Indian individuals involved in the case,” the police report says. The Italian investigators have also concluded that the middlemen were receiving the “due payments” through moneylaundering operations in Tunisia and Mauritius. “It is understood that they are receiving ‘the

due’, that is the 20 million euros (rest went to Christian Michel) through fictitious operations in Tunisia. Afterwards, the money goes to Mauritius. It is also revealed that Orsi, Spagnolini and other top managers have full responsibility and complicity in the operation,” the report says, adding that the duo talk about other Italian and Indian individuals involved in the dealing. Italian helicopter manufacturer AgustaWestland has denied that it used agents or intermediaries for the India contract even as it admitted that it was aware of the preliminary investigation in the case.

‘I will tell Indian judges I spent 10-15 million euros on ballerinas, champagne’
bout 10-15 million euros of the suspected kickbacks in the IAF’s VVIP helicopter contract is believed to have been routed to India and the alleged middleman in the deal apparently planned to tell Indian courts, if he was questioned, that he blew up the money on “ballerinas and champagne”, according to taped conversations available with the Italian police. Discussing his line of defence in India if he was called to answer suspected corruption charges in the Rs 3,546 crore deal for AgustaWestland choppers, Guido Haschke, the alleged middleman, is believed to have said that he would deny the money was paid to anyone in India. Italian investigators suspect the deal involved total kickbacks of 51 million euros. With his defence that the money was “wasted”, Haschke is quoted as saying that Indian courts could at the most prosecute him for tax evasion. The alleged conversation with his business associate Carlo Gerosa took place on March 1, according to Italian police documents submitted in a Naples court.

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gerosa (pretending he is a judge questioning Haschke): Tell us, you collected the money, where have you kept it? Haschke: Eh I collected it, it’s my f***ing business where I have kept it, I didn’t pay anyone. G: Ok, but where have you kept it? H: I wasted it on ballerinas and champagne. And then, then.. G: Yes, but 10-15 million euros on ballerinas and champagne.. H: Ballerinas and champagne. They anyway have to demonstrate I took it [the money].. G: Well, given that these kind of instructions came from us, me, (lawyer) Gautam (Khaitan), everybody.. H: We wasted it, we wasted the money, we didn’t pay anyone. They can say we are guilty because we didn’t pay taxes. In the alleged conversations taped by Italian authorities, it has also been mentioned that Haschke talked about paying off the India head of AgustaWestland, Paolo Girasole, who has been

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named as the key link to the Indian VVIP chopper contract. The following conversation allegedly took place on March 3. Haschke: It’s true that right now I am very annoyed to give 10,000 to Paolo, frankly. Gerosa: You know they have nothing at all. But, you should also say... H: Because we should keep him close. G: Because all activities in India depend on him. H: Sure. G: Without him we can’t rely... H: I am not saying we don’t have to give him...but I am a bit annoyed.. — after some time — G: Anyway Paolo, in this moment..without Paolo we would not have the India thing. You, for a very long time, cannot go, until everything is set and calm. I won’t go to India, who knows for how many months. The only trait d’union we have is Paolo, who now, he comes and goes, we can meet in Rome, every month, when he comes back from India he tells us everything. Fortunately Paolo is there, otherwise... Haschke is also recorded as allegedly discussing a contract they had signed with the helicopter manufacturer that would have given them access

to business opportunities - possibly in the form of offsets - for getting the Indian contract. Haschke also boasts that there is no way investigators can trace the contract back to him. This alleged conversation took place on March 5 with AgustaWestland CEO Bruno Spagnolini. Haschke: Yes, it was a contract like if we take this job. Spagnolini: if we take it.. H: We give you some work. S: Exactly. H: Work.. S: Not “if we take this job, we give you a commission”. H: We give you some work worth. H: The beauty of all this is that there is no way, not even the agency contract, that can lead to me. S: Fine, but we need to have a logic. The 568-page report by Italian investigators also has a section which discusses in detail how the deal was initially fixed in India and how Haschke got in touch with AgustaWestland before being allowed to swing the deal for the firm. While New Delhi has asked Rome for information on its probe in the case, AgustaWestland has said that it has not committed any irregularity in the deal.

Chopper deal kickbacks: 'India changed tech requirements to help Italian firm'
ndia allegedly tweaked the technical requirements in the tender to procure 12 VVIP helicopters for the Air Force to help Italian manufacturer AgustaWestland enter the race, an associate of the suspected middleman in the deal has alleged in his confession to Italian prosecutors. In his testimony, the associate of Guido Haschke said the AW 101 chopper did not qualify
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initially as the requirements were being drawn by India in 2006. They were allegedly tweaked after Haschke struck a deal with the Italian company. Investigations have also found that the Indian businessman named by Italian prosecutors — Sanjeev Kumar (Julie) Tyagi — is closely related to former air chief marshal S P Tyagi, who was heading the force when the tender was floated in December 2006.
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S P Tyagi is a first cousin of Julie, a Delhi-based businessman. He is one of three Indians being probed for suspected corruption in the Rs 3,546 crore deal. The retired officer confirmed he was related to Julie but said they had no business links. Julie could not be reached for comment. Reached for its comment, the IAF did not respond until going to press. In his May 14 confession, business consultant Carmelo Messina says he put Haschke and his partner Carlos Gerosa in touch with AgustaWestland in 2006 to facilitate the Indian contract. He says Haschke was keen to get in touch with AgustaWestland as he “claimed he had deep knowledge of the Indian market”. “Haschke said he had good relations with a person from Indian defence. I think he met him during his studies in America,” the statement says.

Messina said Haschke boasted about his connections and claimed to have insider information that could help the Italian firm. Messina says AgustaWestland figured out its choppers would not qualify for the contract after it contacted Haschke. He says Haschke managed to get the requirements changed to accommodate AgustaWestland. “He told me he managed to convince the Indians, or actually the defence ministry, to reconsider the features of the helicopters so that Italian helicopters too could take part in the tender,” Messina says. “After some evaluation, it was found Haschke was right and the... ministry had really modified the technical features of the helicopters it needed.” Messina says he received “50,000-60,000 euros in cash” from Haschke as a “thank you sign” in 2009.

Records confirm tender was altered, allowing AgustaWestland to qualify
n the first corroboration of the findings of the Italian probe into corruption allegations in the VVIP helicopter deal of 2010, it has emerged that critical technical requirements in the contract were tweaked by India, allowing Italian manufacturer AgustaWestland to enter the bidding competition. In the first tender floated to acquire 12 helicopters for ferrying VVIPs, the Italian firm could not make the cut as it did not meet the requirement of being able to fly at 6,000 m. This, it has been found, was lowered drastically by the Defence Ministry in a second tender in 2006, helping the AW 101 chopper qualify.

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This modification corroborates the events mentioned in the Italian investigation report. As reported by The Indian Express, the confession of a business associate of Guido Haschke, the alleged middleman in the deal, made before Italian prosecutors alleges that while the AW 101 did not qualify initially, technical requirements were tweaked after Haschke came into the picture and allegedly used his influence in India. After the Defence Ministry first announced the technical requirements, only two helicopters qualified — the Russian Mi-17 and a Eurocopter model. Subsequently, the Russian aircraft was also disqualified on some other technical grounds, result-

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ing in only one vendor remaining. After the Special Protection Group in charge of VVIP security redflagged this saying that the single-vendor situation would pose hurdles in procurement, the altitude requirements were tweaked to say the chopper should be able to fly at 4,500 m at least. This change allowed AgustaWestland to present its AW 101 helicopter for the contract. As it turned out during the trials, the AW 101 managed to fly at 4,572 m. Its only competitor, Sikorsky, lost out as it could not perform optimally at the high altitude. The Defence Ministry, which steered the acquisition, did not respond to a detailed questionnaire sent by The Indian Express. But officials claimed that the altitude requirements were changed as the earlier ones were too stringent and as a practical issue considering that VVIP choppers don’t require to operate above 4,500 m. None of the helipads where VVIPs are expected to land is located above this altitude, officials said. As reported earlier, in a detailed testimony before the judicial authority of Naples, a business associate of Haschke had explained how he put Haschke and his partner Gerosa in touch with AgustaWestland in 2006 to facilitate the Indian contract. In the 568-page investigation report — a copy of which is with The Indian Express — the associate, business consultant Carmelo Messina, says Haschke was keen to get in touch with AgustaWestland as he “claimed he had deep knowledge of the Indian market, which he devel-

oped with his partner Carlo Gerosa”. Messina, who was also in touch with top AgustaWestland officials, said the company figured out after the contact was made that its choppers would not qualify for the contract. “They came to know that actually the helicopters AgustaWestland could offer were not compatible with the technical features of the helicopters the Indian Ministry of Defence was looking for and that would have been the object of the future tender,” Messina has said. The confession says Haschke then managed to get the requirements changed to accommodate the Italian company’s product. “He told me that he managed to convince the Indians, or actually the Ministry of Defence, to reconsider the features of the helicopters so that Italian helicopters too could take part in the tender,” Messina says in the confession. “After doing some evaluations, it was found that Haschke was right and that the Indian Ministry of Defence had really modified the technical features of the helicopters it needed so that AgustaWestland could participate.” Only three companies — AgustaWestland, Russia’s Kazan and American Sikorsky — took part in the final RFP sent in 2006. While the Russians were disqualified apparently after not including the earnest money in their response, trials were held over the next two years on the AgustaWestland and Sikorsky machines before the contract was finally bagged by the Italians in 2010.

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Chop-a-deal
As Italian investigators probe alleged kickbacks in a Rs 3,546-crore deal involving an Italian company over the sale of VVIP helicopters to India, what’s unraveling is an elaborate network of businessmen, government officials and politicians

hen bad guy Raoul Silva (Javier Bardem) and James Bond face off in some of the most daring stunt scenes of Skyfall, a little role went unnoticed—that of two heli-

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copters, AW101 and AW159. In somewhat less heroic circumstances, one of these choppers, the AW101, finds itself at the centre of a probe in Italy over a deal with the Indian government.

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As Italy continues to probe the men and methods used to allegedly launder money, the Agusta deal points to an elaborate network of agents, businessmen, government officials and even politicians in India who could be involved in swinging the deal

In February 2010, AgustaWestland won a Rs 3,546-crore contract for 12 AW101 helicopters. For most observers of India’s military acquisition process, this deal was unlike any they had seen before. The process worked like clockwork—right from the time that tenders were floated in late 2006 to the trials, evaluations, government approvals and financial negotiations. It took the government just over three years to commit Rs 3,546 crore to AgustaWestland for the purchase of 12 new helicopters to replace the older-generation Russian machines that were used to transport senior government functionaries. So while other key acquisitions got shelved, the finance ministry, then headed by Pranab Mukherjee, cleared the chopper deal. In fact, the deal was pushed through after the Special Protection Group, then headed by B V Wanchoo, insisted that the helicopters were urgently needed due to security implications. At a press conference on February 16, 2010, when asked why the VVIP helicopters got preference over other acquisitions, Defence Minister A K Antony said, “Not only the Air Force but the SPG was also involved. They told us that due to the security scenario, we should consider this proposal and the Finance Ministry also agreed to take their comments and it was cleared by the Cabinet Committee on Security.” The helicopters were to join India’s VVIP aircraft fleet, which already has five Embraer 135 jets and three Boeing VVIP aircraft, in 2012. But earlier this year, Italian investigators began probing allegations that AgustaWestland paid a commission of Euro 51 million (over Rs 350 crore) to Switzerland-based consultant Guido Ralph Haschke to facilitate the India deal. As Italy continues to probe the men and methods used to allegedly launder money, the Agusta

deal points to an elaborate network of agents, businessmen, government officials and even politicians in India who could be involved in swinging the deal. As reported by The Indian Express in a series of articles, the names of several Indians have already surfaced in the preliminary inquiry report that has been filed by Italian investigators in a court in Naples. The investigation started last year after an open succession war between Francesco Guarguanglini, who was then heading Finmeccanica, the parent company of Agusta, and his successor, Giuseppe Orsi, who now heads the Italian company. Meanwhile, late last year, Silvio Berlusconi’s coalition government, which had as coalition partners parties such as the far-right Lega Nord (now alleged to have received kickbacks to swing the deal in Italy), was replaced by one led by technocrat Mario Monti. This prompted Lorenzo Borgogni, a former top employee of Finmeccanica and an Orsi-baiter, to blow the whistle on Agusta’s deal with the Indian government. Borgogni told prosecutors in a detailed statement that kickbacks were paid by AgustaWestland for the Indian contract through the use of middlemen and that the total amount came up to Euro 51 million. Borgogni detailed how the money was paid through a network of middlemen and consultants, with the main allegation being that at least Euro 10 million was funnelled back to Italy and paid to the Lega Nord party in return for its support to Orsi’s bid to become president of Finmeccanica. In his interrogation, which is part of the 568page report by Italian investigators, Borgogni says the company decided to divert funds for commissions, knowing how risky it is to hire agents for Indian deals.

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A taped conversation between Haschke and Gerosa clearly points to Haschke’s knowledge that money was paid off in India and that illegal work was afoot. In the conversation, he worries about explaining his business in India to his wife

“Paid mediation is forbidden in India. And this is very risky because if India comes to know, it can cancel the contract and blacklist Finmeccanica, as it happened earlier with a French company, I think. So the money comes out of Agusta and goes to Haschke and to Michel, from Michel to Orsi, from Orsi to Lega Nord (political party),” Borgogni says in the investigation report. With this as the starting point, Italian prosecutors began an elaborate inquiry—involving planting of bugs, intercepting phone conversations, shadowing and tailing key suspects, scrutinising finances and recording secret audio and video clips—to establish if irregularities took place. The inquiry, which runs into hundreds of pages of evidence ranging from taped conversations to seized papers and confessions of business partners and associates of the key players, brings out several facts that point to money laundering and corruption in connection with the VVIP deal.

THE MONEY FLOW
While facts continue to emerge in the case, the money trail has allegedly led to two middlemen who managed to ‘fix’ the deal in India. One is Switzerland-based Guido Haschke, who was allegedly used by AgustaWestland to swing the Indian contract. Haschke and his business partner Carlo Gerosa, both Italian nationals, are old India hands. They are partners in Aeromatrix, a Chandigarh-based engineering and IT outsourcing company that is also being investigated for suspected money laundering. Haschke and Gerosa have closely worked with the AgustaWestland team in New Delhi and have, in the past, received contracts worth millions from Finmeccanica for various consultancy services and contracts in India. A taped conversation between Haschke and Gerosa clearly points to Haschke’s knowledge that

money was paid off in India and that illegal work was afoot. In the conversation, he worries about explaining his business in India to his wife. “She is vague. She’s fine, then angry, then she is all nice and sweet, then angry again...Now I have to think about what I should tell her...Somehow I have to explain to her what the f*#^ I earn from India,” he says. When Gerosa responds by saying he can explain that they are doing a project together, Haschke says, “At some point in time, she will want to know what we do together, given that we go to India together.” In other recordings, besides talking about money being funnelled into India and discussing their possible defence in Indian courts for laundering Euro 10-15 million, Haschke elaborates on how he has destroyed all evidence linking him to the Indian VVIP deal. “I cleaned every single piece of paper from my office. I completely cleaned the computer...Actually, you know what I did? I removed my old computer and now there is a new one where there is nothing. So even if they search for erased data, they will not find anything. Now I am deleting all emails which passed through Carlo’s (Gerosa’s) server in the office,” Haschke says in a conversation with Gerosa. For the Italian investigators, establishing the roles of Haschke and Gerosa in the deal wasn’t too difficult given their India business and the fact that Gerosa is an old friend of Indian businessman Sanjeev Kumar ‘Julie’ Tyagi. The Indian businessman, a known consultant in the power sector, is well connected in the power circles of New Delhi and even the military establishment. Former Air Chief Marshal SP Tyagi, who was heading the Air Force when specifications were drawn up and tenders were floated for the VVIP helicopter deal in 2006, is a cousin of Julie Tyagi’s. Investigations

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An Indian investigation, if any, will have to start from this point. So far, the government hasn’t been fast enough to respond to revelations that threaten to open a can of worms for India’s defence and political circles

reveal that Julie Tyagi is one of the rings in this complex web of middlemen who allegedly influenced the deal. In a conversation recorded on March 1 between Haschke and Gerosa, Julie Tyagi’s name comes up when they discuss how important it is for them to ensure that their names don’t leak. “The only one who has no risks is Julie, because we are those in the front,” says Gerosa. But the biggest fish in the pond so far is London-based Christian Michel, a British national who has allegedly been paid Euro 30 million, the lion’s share of the kickback that was meant to be distributed to those in the Indian and Italian establishments. Michel is a little-known but highly connected businessman who is said to have high-level political contacts in India and has won admirers for his easy access to top Indian politicians and members of the establishment. Little has emerged till now on his Indian connections in this particular deal but according to the Italian investigation, he was a crucial part of the contract and was the one who allegedly pumped back Euro 10 million into Italy—money that was paid to Orsi and handed over to the political parties. However, since Michel did not operate from Italy, the initial probe report does not record how he operated in the entire deal. There are several snatches of conversations and other evidence that do point to his role in the deal, including a “two step approach” by AgustaWestland in which the commission was allegedly divided between Haschke and Michel. According to media reports in Italy on the probe, prosecutors have named Michel as “one of the two mediators” in the deal. The reports say that according to the line of investigation, AgustaWestland initially paid Haschke Euro 41 million as part of a contract for the Indian deal

but this was increased by Euro 10 million when Michel came into the picture.

WHAT NEXT FOR INDIA?
So far, the Italian investigation has been limited to establishing that a) illegal commissions were paid, b) money laundering took place in which funds were routed to India through Tunisia and Mauritius and c) politicians and businessmen in Italy illegally benefited from the contract. The scope of the Italian probe will end at the point where the alleged commission money reaches India. The probe will not go into who was paid the money in the Indian establishment or how the funds were worked around within the power circles of New Delhi. An Indian investigation, if any, will have to start from this point. So far, the government hasn’t been fast enough to respond to revelations that threaten to open a can of worms for India’s defence and political circles. The defence ministry did request the Italian government for information on their probe, but it is a futile exercise since the prosecutors undertaking the investigation are unlikely to divulge information to a foreign nation’s defence or external affairs ministry. The government has now taken “serious note” of the alleged irregularities in the deal, with the Ministry of External Affairs calling in the Italian ambassador and telling him that New Delhi was serious about the information it had sought from Rome about the probe.

THE KEY PLAYERS
Guido Haschke & Carlo Gerosa

Haschke, a Switzerland-based businessman, has been operating in India for several years. He was allegedly one of the two agents used by AgustaWestland to swing the Indian contract. Haschke worked

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The low-profile London-based consultant allegedly got the lion’s share of the Euro 51 million commission. Michel is know for his connections in the Congress party and access to the governments —much like his father Wolfgang Richard Max Michel

closely with the Agusta team in New Delhi and has in the past allegedly received contracts worth millions from Finmeccanica, the parent company of AgustaWestland, for various consultancy services and contracts in India. He had been detained by Swiss authorities on money laundering charges but is now out on bail. Haschke, along with his partner Carlo Gerosa, another Italian and a old India hand, own Chandigarh-based Aeromatrix, an engineering and IT outsourcing company that is being investigated for suspected money laundering.
Sanjeev Kumar Tyagi

er ‘Jolly’ Tyagi has dabbled in politics in the past. The duo are known to be close to leaders and functionaries in the BJP. Former Air Chief Marshal SP Tyagi is Julie’s cousin.
Christian Michel

Delhi-based businessman Sanjeev Kumar ‘Julie’ Tyagi is an old friend of Gerosa’s. A consultant in the power sector, Julie has an office on New Delhi’s Feroz Shah Road as well as a house in the posh Sainik Farms. The well-connected Tyagi is known to move around in luxury cars and said to have major investments in real-estate. His older broth-

The low-profile London-based consultant allegedly got the lion’s share of the Euro 51 million commission. Michel is know for his connections in the Congress party and access to the government—much like his father Wolfgang Richard Max Michel had when he operated in India in the 80s and 90s. Old timers recall Wolfgang, who died earlier this year, as a controversial businessman who worked extensively in Indian government circles for several years. Christian’s sister Caroline heads the literary agency Peters Fraser Dunlop and was recently listed in the top 500 of the ‘Tatler List’ that rates influential people in the UK.

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