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Files reveal links between Agusta, Embraer deals

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By Ashish Singh | NEW DELHI | 18 September, 2016 – The Sunday Guardian
ashish-embraer-story-edited-1The DRDO was not on board with the IAF over selection of the Embraer aircraft.
ashish-embraer-story-edited-2The CBI has registered a preliminary enquiry (PE) against unknown Ministry of Defence officials to probe the Embraer aircraft deal scam, in less than 12 hours after this correspondent revealed on NewsX the minutes of four meetings held in December 2006 to finalise the aircraft for the AEW&C project.

This correspondent has revealed that the Defence Research and Development Organisation (DRDO) was not on board with the Indian Air Force under then Air Force chief S.P. Tyagi over the selection of Embraer aircraft.

PE is the very initial measure taken by the CBI to examine any case before lodging a First Information Report (FIR) against suspected persons.

The CBI told this correspondent that “CBI has registered a PE (preliminary enquiry) against unknown officials of the Ministry of Defence (GOI) and others. This on a reference from the said Ministry on allegations related to M/s. Embraer employing an agent to facilitate various contracts. These include the contract for AEW&C project wioth CABS/DRDO for procurement of 3 aircraft”.

This correspondent has accessed the key 10-page documents that form part of the “Embraer files” that are being investigated by the CBI and the Enforcement Directorate. The documents contain the minutes of the four meetings held in December 2006 to finalise the aircraft for the AEW&C project.

In the first of the four meetings, held at Air Headquarter, New Delhi on 5 December 2006, the documents suggest, then Programme Director (AEW&C) Dr S. Christopher (who is currently the DRDO chief) had proposed two alternative options with different configuration and endurance for the aircraft as a platform for this project. He also pointed out that better options will be available with the change of aircraft. But the Air Force under S.P. Tyagi overruled Christopher’s arguments and stated that the DRDO will work with Embraer, the world’s third largest aircraft manufacturer that is now under the scanner of the US and Brazilian authorities for alleged kickbacks.

The Embraer files accessed by this correspondent reveal that four meetings had taken place on 5,6, 8 and 19 December 2006 among the Air Force officers, DRDO officials and the scientific adviser to the then Defence Minister, A.K. Antony.

“Dr. Christopher brought out that better options will be available with change of aircraft. The Chairman (the then Deputy Chief of Air Staff) stated that we need to work with EMB-145 and develop a prototype with the configuration that CABS will formulate and send to IAF for consideration”, stated the minutes that are available with this correspondent.

The minutes further state: “The Programme Director, AEW&C stated that CABS has proposed two options with different configuration and endurance. DCAS asked him to submit a clear proposal of what can be achieved with a 24T aircraft.”

The Defence Ministry is also expected to seek information from Brazil and the US through Indian defence attachés deployed in Indian embassies in the two countries.

According to the Brazilian newspaper Folha de Sao Paulo, Embraer had allegedly engaged a UK-based defence middleman and paid him kickbacks in order to ink the deal with India. Media reports further alleged that Embraer officials had paid commissions to middlemen in order to finalise similar deals in Saudi Arabia. The US Justice Department has been scrutinising Embraer’s deal with India.

The newspaper report claimed that the Brazil based company came under the US scanner after the US Justice Department smelled a rat in 2010 following the former’s contract with the Dominican Republic.

In 2008, a $208 million deal with Embraer was signed by the Defence Research and Development Organization (DRDO) for three ERJ-145 aircraft to build indigenous Airborne Early Warning and Control Systems for the Indian Air Force. The three aircraft were to serve as an air-borne radar system known as airborne early-warning and control systems or AEWCS for the Indian Air Force.

Significantly, the Embraer deal reminds one of the AgustaWestland VVIP helicopter scam due to the many similarities. Both Embraer and Augusta deals were inked when S.P. Tyagi was the Air Force chief and A.K. Antony was the Defence Minister.

Both deals were cleared between 2008 and 2010 despite alternative options being available. In both deals, UK based middlemen and aircraft company officials are allegedly involved.

PMO

Modi government plans to launch team to probe defence scams

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By Pradip R Sagar Published: 18th September 2016 – The New Indian Express

CBI director Anil Kumar Sinha
CBI director Anil Kumar Sinha

NEW DELHI: With an extremely poor track record of probing defence bribery scandals, the country may have a special team to investigate such cases. Prime Minister Narendra Modi-led government is contemplating a proposal to constitute the team.

The proposal came up for discussion at a meeting in the Cabinet Secretariat recently where key officials suggested an independent team, which can be tasked to investigate only the high-profile scams that have hit the corridors of the defence ministry. Investigators can be drawn from the CBI to coordinate with the ED, to follow the money trail involved.

The government is planning to launch a special team only to investigate defence scandals. This comes in the backdrop of allegations of Brazilian aviation major Embraer hiring a UK-based agent and paying commissions to swing the $208 million deal for three Emb-145 aircraft inked with India during the UPA rule in 2008. The Defence Ministry has forwarded the matter to the CBI, which has filed a preliminary inquiry and initiated a probe.
From 1986 Bofors, HDW submarine, Tatra to AgustaWestland, Indian investigators have miserably failed on prosecution as majority of the scams hit dead-end and closure was filed by investigating agencies. Government believes that such scams not only bring bad image to the country, but also causes embarrassment globally. The only roadblock, however, will be sparing officials from the CBI, the federal agency which is already short-staffed. In a recent affidavit in the SC, the CBI informed that it has 50 per cent of its staff on deputation and has a vacancy of 754, against its sanctioned strength of 4,544. Of these, 283 vacancies are at the levels of inspector, 195 of constable and head constable, 65 at deputy and additional superintendent of police, 41 at SP and senior SP level and 12 are of Deputy Inspector General.

“Repeated failure of investigating agencies especially in probing defence scams is surely a cause of worry for the government, as it creates a lot of hype. Forming an independent team of selective officials to handle bribery allegations in defence deals will be an option, as most of these probes require overseas intervention,” said a high-ranked official. It ultimately turns out to be diplomatic loss of face for the government after naming foreign companies and middlemen during the course of investigation.

Like in the recent case of AgustaWestland choppers, despite so much of noise in Parliament, CBI has failed to arrest anyone.the-sunday-standard-18-september-16

Drdo

Government asks CBI to probe in allegations of corruption in purchase of three Embraer aircrafts

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By Express News Service Published: 15th September 2016 – The New Indian Express
NEW DELHI: The Central Bureau of Investigation (CBI) has started analyzing allegations of Brazilian aviation major Embraer hiring a UK-based agent and paying commissions to swing the $208 million deal for three Emb-145 aircraft inked with India during UPA rule in 2008.

The government had asked the agency to probe in allegations of corruption in the purchase of three Embraer aircraft for Defence Research and Development Organisation in 2008

The agency sources said officials are going through the reference and any decision to start a probe in the matter will be taken soon after analysing all the documents.

If the agency is satisfied that it has enough prima facie evidence to initiate an FIR, it will start or else it might register a preliminary enquiry to gather enough material for registering a regular case, they said.

Government had stated that the allegations were of a serious nature and the CBI will probe.

Defence Minister Manohar Parrikar had earlier this week said that, “If there is a criminal angle, then the CBI will probe as the Ministry cannot”. “If only procedural issues are involved, then the Defence Ministry can do an internal investigation,” he had said.

The deal for purchase of three Embraer aircraft during the UPA regime has kicked up dust with US authorities going into alleged payment of kickbacks. The deal has come under the scanner of the US Justice Department which has been probing Embraer for alleged payment of bribes to secure contracts.
Soon after, the reports of irregularity surfaced, the DRDO has already sought a report from the Brazilian firm, which has said it has been looking into graft allegations over the last five years.

DRDO investigation through report from Brazilian firm is a separate investigation. Parallel investigation has been started by CBI

The Special Investigation Team probing AgustaWestland bribery scandal will also probe this scam.

The deal was signed in 2008 between Embraer and the DRDO for three aircraft equipped with indigenous radars for AEW&C (airborne early warning and control systems). The first “modified” aircraft was delivered to DRDO in 2011, with the other two following later.

After several missed deadlines, the AEW&C project is now slated to be completed by December. Present DRDO chief S Christopher was the AEW&C programme director and head of the Centre for Airborne Systems (CABS) before he was chosen to head DRDO in May 2015 by the NDA government.

Sources claimed that role of the committee, comprised of officials from IAF and DRDO is also under scanner, which shortlisted the Embraer deal.

Brazil’s top newspaper, the ‘Folha de Sao Paulo’, had reported on September 8 that the possible bribery in the 2008 Indian deal was under the scanner of the US justice department, which has been investigating Embraer since 2010, after a contract with the Dominican Republic raised suspicion. The scope of the investigation has now been widened to examine Embraer’s dealings with eight other countries, including India and Saudi Arabia.

Drdo

After Agusta cloud, Embraer deal under scanner

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NEW DELHI, September 10, 2016 – THE HINDU

Brazilian aircraft major Embraer is alleged to have resorted to bribes, used middlemen to secure contracts.

Brazilian aircraft major Embraer is alleged to have resorted to bribes and used middlemen to secure contracts in India and Saudi Arabia. In India’s case, the payoff was done to a United Kingdom-based middleman in the deal for three Embraer aircraft ordered by the Defence Research and Development Organisation for building indigenous Airborne Early-Warning and Control Systems aircraft for the Indian Air Force.
Brazilian aircraft major Embraer is alleged to have resorted to bribes and used middlemen to secure contracts in India and Saudi Arabia. In India’s case, the payoff was done to a United Kingdom-based middleman in the deal for three Embraer aircraft ordered by the Defence Research and Development Organisation for building indigenous Airborne Early-Warning and Control Systems aircraft for the Indian Air Force.

India has asked an explanation from the Brazilian aircraft-maker Embraer following media reports of an international investigation into the alleged payment of bribes to secure an aircraft deal in 2008.

Embraer is alleged to have used bribes and involved middlemen to secure contracts in India and Saudi Arabia. In India’s case, the payoff was made to a U.K.-based middleman in the deal for three Embraer aircraft ordered by the Defence Research and Development Organisation (DRDO) for building an indigenous Airborne Early Warning and Control Systems (AEW&C) aircraft for the Indian Air Force. A Defence Ministry spokesperson said on Saturday that the DRDO sought an explanation and details from the manufacturer within 15 days.

Under watch since 2010

According to Brazilian newspaper Folha de Sao Paulo, Embraer had been under investigation by the United States Justice Department since 2010 “when a contract with the Dominican Republic raised the Americans’ suspicions.”

“Since then, the investigation has widened to examine business dealings with eight more countries,” the report said.

The newspaper reported that the company was cooperating in the investigations, and “is expecting to reach a deal soon with American authorities” and has even set aside $200 million to pay “any eventual fines that come about as a result of the process”.

The newspaper has quoted Albert Phillip Close, manager of Embraer’s defence area, as having admitted to the authorities as part of a plea bargain that in the case of India, the aircraft major had contracted a representative to assist in the sale of a surveillance system to the government.

$208-million deal in 2008

India had signed a $208-million deal in 2008 for procuring three Emb-145 aircraft. The planes were delivered beginning 2011 and the project is now nearing completion after a series of delays.

This is the second major defence deal under the scanner after the VVIP chopper case involving Agusta Westland and both the deals were signed by the previous United Progressive Alliance government.

Indian defence procurement prohibits the employment of middlemen in defence deals.

The Defence Ministry spokesperson when asked about the reports said the DRDO will seek explanation and details from manufacturers of Embraer aircraft on media reports on the 2008 deal.

“On receipt of information by the DRDO, further steps may be initiated,” he said.