Defence Purchases

Publisher and Managing Editor IKRAM SEHGAL  wrote this article for THE NATION which the DJ is re-producing with thanks.

Our politicians have reacted to reported kickbacks in defence deals like a pack of  hounds taking off after a fox in a fox-hunt no sooner the trumpet is blown. On the receiving end of accountability for the past year, it must be satisfying for the politicians to see the catchers themselves in the rye. Unfortunately their contention that corruption in arms trade is an evil confined to Pakistan alone in time and/or space is wrong, industrial conglomerates like the Germany’s Krupps actually orchestrated wars between nations at one time or the other in order to facilitate sales of their products. Remember Basil Zaharoff? Only a short time ago, the US Congress reverberated with revelations about US $ 600 toilet seat covers and US $ 120 screwdrivers, etc. In France former Defence Minister Cheysson is facing prosecution. Many major US firms have run afoul of the “Foreign Corrupt Practices Act”. Garage-to-riches wonder US businessman Ray Guerin of International Signal Corporation (ISC), the maker of cluster bombs (among other things), went to jail for fraud in the early 90s (that some senior officials from our Ministry of Defence were involved is another story). After a M1-8 helicopter accident in 1970, I was shocked to learn that a canvas pitot tube cover, costing about Rs 10-12 in Massey Gate Rawalpindi, was to be replaced by the (not-so-capitalistic) Russians by one costing nearly US $ 50. The Indian defeat on the McMohan Line in 1962 at the hands of Chinese revealed massive corruption in procurement deals. Very recently in Kargil, the Indian Army faced similar deficiencies in everything, from socks to boots to gloves and ammunition etc. And there was no corruption?

Arms and equipment procurement worldwide has historically been a tainted exercise, the Indian BOFORS case is quoted  as an example everywhere. In SIPRI’s book edited by Ravinder Singh Pal, “Arms Procurement and Decision-making” Volume I, pertaining to India, China, Israel, Japan, South Korea and Thailand, he identified, “four damaging consequences of excessive confidentiality in decision-making (a) insufficient examination of the rationale for weapon system procurement (b) greater likelihood of corruption in arms procurement (c) inadequately analyzed procurement policy leads to inefficiency and unhealthy consequences for national security and (d) opacity in decision-making processes damages public confidence in the Armed Forces which are consequently subjected to needless controversies. The military’s professional credibility and objectivity of government claims consequently suffer,” unquote. One of the world’s foremost anti-corruption experts, Joe Roeber of Transparency International, has done pioneer work in unearthing corruption in arms trade.

Prosecution of corruption cases in arms trade can be equated to that of rape. Most countries have enacted laws (or are in the process of enacting them) making it obligatory for the Prosecution not to identify the rape victim in public since the victim has already suffered considerable physical and mental anguish at the hands of the perpetrator/s.  Held up as an object of shame in some callous societies, she could very well suffer death for having “shamed the tribe”. Who but the Armed Forces are the victims when kickbacks are given Arms procurement? While the guilty certainly have to pay for their crimes, national security reasons require it cannot be done by public trial except behind closed doors by Accountability Courts specially constituted by the military themselves. But the guilty must not be allowed to hide behind the mantle of “national security”, exposure of defence deals “may be motivated to malign the Army” but that is a Catch-22 proposition. Under this fig-leaf camouflage, have the corrupt a God-given right to defraud the army and the nation?

Our problem is varying standards and selective amnesia, with a public schoolboy’s concept of honour which restrains him from reporting wrongdoings about his classmates. Depending upon area, school/college of education, Pakistan Military Academy (PMA) Course, Arm or Service, Regiment, friendships, relationships, etc a corrupt person has a “protection” of sorts, a somewhat similar association applies in the case of civilian personnel and that of the PAF and the Navy. Retired military men really started to become “agents” (sometimes called “consultants”) during the mid-70s, sometimes on “retainer” (if maybe US $ 2000-3000 per month) as well as commission.

Defence Purchases in Pakistan from abroad normally stipulate that no commission should be paid. Where commission is to be paid, it is declared as a very small percentage of the actual sale price, disbursed on a pro-rata basis in Pakistani Rupees along with the encashing of L/C. In theory, this makes the person liable to pay taxes and also makes it difficult for him (or her) to disburse large sums of money (kickback, bribes, etc) from the books of accounts without accounting for them. Therefore, acting as an agent of an arms and/or equipment manufacture is legitimate if the rules are adhered to, one cannot call every agent or consultant a crook. Obtaining the General Staff (GS) Requirements and creating “test and trial” reports in his own hand for the user units is not a legitimate part of such business.  Take the example of a person acting a sales consultant for a sniper rifle (cost about US $ 3000). With commissions closer to 20%, i.e.  US $ 600 per unit (or Rs 36,000 at today’s rate of exchange), sales of several thousand units would gross almost Rs 13 crore in commissions and that too only one item of purchase. This amounts to US $ 2 million in a secret account abroad. One particular hypocrite who acts as the conscience of this army (and the nation) operates under the camouflage of a very miserly existence to foster this sophisticated deception, this martyr “works out of sheer patriotism” and “love for the Armed Forces”. Garnering sympathy from former military associates and friends, he utilises it to get “access” while generally avoiding the dishing out of large sums of money as bribes. This also helps to avoid taxes in Pakistan, and for that matter in UK (or elsewhere). So if the person has US 2 million in a UK account, and remits to himself only Rs one lac a month as  “kitchen money” for expenses, he would still have well over US $ 1.5 million (over a 10 years period) not counting the sales to police, and other para-military forces. Consistent in his rhetoric  condemning corruption, this “patriot”  could well be the very re-incarnation of  Jesus Christ the Second. Unfortunately because of the double standards inherent in our culture, he “belongs”. So it is no surprise he became a “High Priest” in NAB, never officially, as anonymous as the “Letters to the Editors” he churns out under different names. So what if he is guilty of bribery, corruption, tax evasion, foreign exchange violations, perjury, etc, his friends will shield him. That such a person is supervising accountability of others sums up not only lack of the credibility in our accountability process but to an extent our dilemma, who is to cast the first stone?

Fortunately for Pakistan, the people involved in such corruption are only a handful and if the keepers of our conscience do not apply selective standards they can be taken to task. On the same logic that protects rape victims we need to protect the real victim of this rape, the Pakistan Armed Forces. Subjecting the uniformed lot to defamation and ridicule, and making ourselves the laughing stock of the world can be avoided by creating a special cell pertaining to corruption in Defence purchases since some issues may well transgress national security. And making sure the cell is not staffed by cronies as is the 3rd Floor of NAB. Adverse publicity will invariably be used by the enemy, this has to be avoided. Only those found liable should be brought before a closed-door Military Accountability Court headed by senior retired military officer appointed as ad hoc High Court Judge by the Chief Justice of the Supreme Court from a panel of non-controversial retired officers of known integrity, competence and impartiality. Like in rape cases we have to protect the victim, in this case the Armed Forces from being “raped” by motivated media attention.

In a vacuum of both information and knowledge, false accusations can also be made, some may well be exaggerated. When he says publicity is meant to malign the Army, the CE may well be right but failure to take action against the handful of corrupt is also not being fair to the honest, silent majority of uniformed personnel. The matter must be handled maturely, in a controlled transparent manner and in a balanced, sensible way that will preserve the fabric of integrity that holds the Armed Forces and the masses together. Any person who has secreted money abroad through commissions out of defence purchases is a traitor, so is anyone who protects him from retribution. As much as someone would like, public school moralities do not apply here, real-life integrity at the national level is a different ball game. Samuel Johnson rightly said, “patriotism is the last refuge of the scoundrel”. To retain their credibility the military hierarchy shall have to root out such scoundrels from this very convenient sanctuary.