PAC's second report on 2G blasts PC, says PM was 'misled'

The PAC's second draft report again targets Prime Minister Manmohan Singh and then Finance Minister P Chidambaram. However, Chidambaram gets more brickbats while Dr Singh, the report says, was 'misled' by then Telecom Minister A Raja. Our Correspondent reports from New Delhi.

The 'rejection' of the draft report of Public Accounts Committee's chairman Dr Murli Manohar Joshi on the 2G spectrum allocation issue by members of United Progressive Alliance within the PAC has not dampened Dr Joshi from bringing out another report on the issue.

Dr Joshi, senior leader of Bharatiya Janata Party, has taken a lead in giving government some anxious moments on the issue since the last one year.

The first report 'indicted' the government for many policy violations and lapses. The second draft report again targets Prime Minister Manmohan Singh and then Finance Minister P Chidambaram. However, Chidambaram gets more brickbats while Dr Singh, the report says, was 'misled' by then Telecom Minister A Raja.

The second report, the copy of it is in possession of rediff.com, is likely to create pressure as the first report did but it is unlikely to be placed in the current PAC by chairman D Joshi because the National Democratic Alliance doesn't have the required majority inside the PAC.

Read the operative part of the report
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However, it will create a buzz till the Uttar Pradesh elections, scheduled for next year, and the shrewd Dr Joshi will wait for the new political alignments within the political setup to make this report official and make it a part of parliamentary records. Currently, neither the Bahujan Samaj Party nor the Samajwadi party is supporting the BJP on the issue within the PAC.

The reworked report of the PAC claims that the committee is "shocked and dismayed to note that the Finance Minister (P Chidambaram), in his note dated January 15, 2008, acknowledged that spectrum is a scarce resource and the price of spectrum should be based on its scarcity value and efficiency of usage but made a unique and condescending suggestion that the matter of recovery of money from those licenses who have already held additional spectrum be treated as closed. The committee believes that ends of accountability demand that any wrongful loss caused to the government is made good and the guilty brought to justice."

Dr Joshi's report further says that, "The committee views it as most unfortunate that the finance minister, the guardian of public-exchequer and trusted with the principal task of mobilisation of resources for public welfare, instead of initiating stringent and swift action against all those responsible for the whopping loss to exchequer pleaded with the prime minister to treat the matter as closed."

Joshi's new report also says that Prime Minister Manmohan Singh reached a conclusion to go by the first-cum-first-serve basis and not auction route for allotment of spectrum because of the finance secretary's note of July 4, 2008. The report says the Department of Economic Affairs note made the difference. The PAC says the "finance minister failed to protect the interest of the state by not pursuing either the auction method or any of market related methodologies suggested in the finance ministry's note of July 4, 2008."

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While talking about Dr Singh, the PAC's new report says, "The prime minister in fact was misled when he was informed by the minister (Raja) that that the issue of auction of spectrum was considered but not recommended by the telecom commission and also not recommended by Telecom Regulatory Authority of India." 

The report, while talking about Raja, says, "The minister was saying the half-truth (to PM Singh), concealing the other half, concealing his ulterior design. His assurance to the prime minister that he was not deviating from the established and existing procedures was a blatant lie as he deformed and distorted the first-come-first serve policy." 

On the issue of presumptive loss of 2G spectrum, the committee's unapproved report notes "with profound concern the nation-wide public shock and indignation over the gross irregularities in the allotment of 2G spectrum and the colossal fiduciary loss caused to the public exchequer."

The committee, while discussing the real amount of loss due to 2G spectrum says that, "Well before the CAG report was tabled in Parliament, in his petition to the Supreme Court, Subramanian Swami calculated a net loss of Rs 97,410.72 crore and B K Syngal, a well known telecom expert and former CMD VSNL, quantified the possible loss between rupees Rs 70,000 to 80,000 crore based on multiple indicators. Sitaram Yechury, MP, taking the 3G spectrum price, dual technology licenses and allotment of excess spectrum as benchmark, calculated the loss to the whopping order of Rs 190,000 crore."

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It further says, "The CAG based on a set of indicators assessed the presumptive loss between Rs 57,666 and Rs 176,645 crore. The CBI calculated the loss as roughly between Rs 40,000 to Rs 50,000 crore based on the premise of the profits made by Swan and Unitech from the sale of equity. The CBI however clarified that they were concentrating the investigation on criminal conspiracy and the money trail."

The PAC's new report takes strong objection to new Telecom Minister Kapil Sibal's statement that described the presumptive loss calculated by the CAG as "utterly erroneous and embarrassing to the government"

Dr Joshi's report says, "The committee disapproves the public criticism of the institution of CAG and Parliament itself."

The committee has criticised the fact that the finance ministry, TRAI and the Department of Telecommunication have so far not calculated the precise loss. Talking about the Central Bureau of Investigations, the PAC report says that even though FIR was filed in October 2009, the CBI started its raids only in October 2010. The report reveals that in 2G spectrum scam case the CBI has seized 1,626 documents running into 138,765 pages and has 115 witnesses. The committee has appreciated the volume of work CBI had to attend to but it said that such a plea cannot be taken as a valid reason for inordinate delay on the part of the CBI in investigating the 2G scam.

The PAC says, "The public perception remains, and quite justifiably, that the CBI's investigation gained momentum only after the Supreme Court started directly monitoring the case thereby fuelling the apprehension that the CBI was initially tardy in the investigation under undue external pressure."

Dr Joshi's second report also criticises industrialist Ratan Tata for writing a handwritten letter to then Tamil Nadu Chief Minister M Karunanidhi. It says, "The committee are (sic) surprised that a person of Tata's stature sent a personal letter to the DMK patriarch when the letter had nothing to do with framing and implementation of policies at the central level."

Talking about the Radia tapes, it says that, "The Radia tapes only reveal the proverbial tip of the iceberg and provides glimpses of the often unreported backroom deals, shady trade offs, the role of middle men who have acquired a certain halo of respectability by assuming more fashionable and modern nomenclatures, corporate wars, quid pro quos between lobbyists and certain journalists, insatiable greed for wealth etc."

No doubt, Dr Joshi knows how to keep 2G spectrum scam in the news till the elections in Uttar Pradesh are over.