CIA document claims Sweden stopped Bofors inquiry to save Rajiv Gandhi and their own politicians

As per laws passed in the US, documents are put up for automatic declassification after 25 years unless they fall under certain 9 narrow exceptions. So a CIA document dated 4th March 1988 regarding the Sweden’s Bofors Arms scandal was approved for release in 2014, and seems to have ended up in the public domain in December 2016 if one goes by reports. But before going any further:

What exactly was the Bofors scandal?

The Indian Government had finalized a $1.5 Billion deal with Swedish arms manufacturer Bofors in order to acquire 410 field howitzer guns. It was the largest defense deal in Sweden till date and like everything which looks too good to be true, it ran into problems. Allegations of bribery surfaced and it was reported that Indian Politicians and officials received kickbacks for the deal.

Ottavio Quattrocchi, who was a close friend of Rajiv and Sonia Gandhi, was reported as the main middleman in the deal. Its reported that Quattrocchi’s influence in the government was so high that Indian bureaucrats used to stand up when he visited them. This Quattrocchi connection among others ensured that Rajiv Gandhi got directly embroiled in the scam that eventually contributed to him losing the election in 1989.

What does this CIA document [pdf] say?
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In the summary of the document, the CIA claims that investigation into the Bofors bribery was called off by the Swedish authorities in a bid to to prevent future revelations, which might embarrass the then Prime Minister of India Rajiv Gandhi. It also claimed that Swedish politicians cutting across party lines were culpable in some form or the other for the scandal, hence the inquiry was buried.

Also, apart from India there were countries like Iran, Singapore, Thailand, Taiwan among others, with whom the transactions carried out by Bofors were under the scanner for violation of norms and possible bribery.

After investigations had revealed that Bofors might have bribed Indian middlemen and officials, the Swedes carried out a national audit which concluded that as much as $40 Million were paid as commissions to middlemen. Both the Govt and Bofors has claimed that these payments were used to close the contracts with middlemen after Indian govt wished to exclude them from transactions:

After the audit, the Swedish police had initiated a separate investigation into the Bribery to Indian officials which though was terminated after Rajiv Gandhi went on a trip to Sweden in 1988:

The declassified CIA document does raise the question of a possible deal between Rajiv Gandhi and the Swedish authorities and whether the investigation was called off only to spare him of ’embarrassment’ or if it would have led to bigger mess.

Conclusion

Whatever said and done, the CIA felt that payments were almost certainly made to Indian officials either directly or indirectly to secure the $1.2 Billion deal.

After the word leaked causing difficulties for Rajiv Gandhi back home in India. Noble Industries (Bofors’s parent) too wished to avoid a bribery indictment. And to ensure both, the two sides cooperated and the details of payment were kept secret and the investigation was eventually called off.

This above stated CIA document suggests that both the Swede and Indian politicians were neck deep into the scandal, providing a possible explanation to why the matter was hushed up leading to it not being solved till date.

The Congress party keeps claiming that Bofors is a “dead horse” and flogging it won’t achieve anything. The party insists that no one in the Nehru-Gandhi family are guilty of personal corruption.


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