Sweden called off a troubling probe into the Bofors scandal to prevent embarrassment to the then prime minister Rajiv Gandhi in a ‘scheme’ with India that kept payments made to middlemen secret, says a confidential assessment by the US Central Intelligence Agency that has recently been declassified.
“Stockholm wanted to save Gandhi the troubles caused him (sic) by the Swedish leak and Nobel industries (the mother company) wanted to avoid a bribery indictment. The two sides cooperated therefore on a scheme to keep details of the payments secret.
Stockholm eventually called off the entire bribery investigation,” a secret CIA assessment titled ‘Sweden’s Bofors Arms Scandal’ reads. The detailed assessment was conducted in April 1988, two years after India signed a $1.5-billion deal for the howitzers. The West European division of the CIA shared inputs that Sweden and India worked together and that Bofors ‘almost certainly’ made payments to secure the howitzer deal.
The recently declassified CIA records accessed by ET reveal that the US was closely following the Bofors scandal and its possible fallouts in India and Sweden.
The document on the arms scandal has been heavily redacted but contains a detailed timeline of the investigations, including the fact that a national audit conducted by Stockholm indicated that $40 million was paid in commission to middlemen.
“This investigation was terminated in late January 1988, following a trip by Indian prime minister Gandhi to Stockholm. Sweden claimed inability to track the payments through Swiss bank accounts after making a half-hearted request for Swiss assistance,” the report dated March 4, 1988, reads. The assessment goes into other aspects of the Bofors investigation as well, including sales to Singapore, Dubai and East Germany.
However, it is most detailed on the Indian side of the story, suggesting that New Delhi worked closely with Sweden to suppress the issue. The CIA assessment then was that “Bofors almost certainly made payments — either straight to Indian officials or to middlemen who in turn paid off officials — to secure the $1.2 billion sale (sic) of howitzers”.
The aftermath of the Bofors scandal led to Gandhi losing the general elections in 1989 but investigations have lingered on, without coming to any certain conclusion.
A chargesheet was filed by the CBI in 1999, naming Swiss businessman Quattarocchi and Rajiv Gandhi and the case is currently being heard by the Supreme Court.
In the last hearing in December 2016, the CBI told the Supreme Court that it was refused permission by authorities in 2015 to appeal against a Delhi high court order discharging the Hinduja brothers in the case.