This is a case that does not concern India alone: this enterprise carried out its illegal activities within the territory of the US, over the span of several years
In June 2013, Department of Justice (DOJ) indicted six defendants in $18.5 Million #TitaniumBribegate scam including KVP Ramachandra Rao, a sitting MP (Rajyasabha) who was also a close adviser to former CM (Andhra Pradesh) Y.S. Rajasekhara Reddy.
The first defendant Dmitry Firtash was arrested March 12, 2014, in Vienna, Austria. Firtash was released from custody on March 21, 2014, after posting 125 million euros for bail
The six defendants are Dmitry Firtash, aka “Dmytro Firtash” or “DF” a Ukrainian national, Five other defendants remain at large: Andras Knopp, a Hungarian businessman; Suren Gevorgyan, of Ukraine; Gajendra Lal, an Indian national and permanent resident of the United States who formerly resided in Winston-Salem, N.C.; Periyasamy Sunderalingam, aka “Sunder,”, of Sri Lanka; and K.V.P. Ramachandra Rao, aka “KVP”.
It all began in 2006 when the defendants planned to obtain the license from the eastern coastal Indian state of Andhra Pradesh for the mining project of Titanium products. They expected to yield more than $500 Million annually from the sale of these products.
The mining project required licenses and approval of both the Andhra Pradesh state government and the central government of India. Firtash the first defendant is said to have met Indian officials (Including former CM Rajashekar Reddy) to discuss the project. Allegedly, the bribe amount was paid for legitimate commercial purpose, he also appointed various subordinates to ensure a smooth flow to obtain the licenses.
Who benefited from this project?
For several years, Firtash and Knopp were the most benefited from this project and of course, the other defendants involved were also at the receiving end.
The first defendant Dmitry Firtash was arrested March 12, 2014, in Vienna, Austria. Firtash was released from custody on March 21, 2014, after posting 125 million euros (approximately $174 million) bail, and he pledged to remain in Austria until the end of extradition proceedings.
Knopp has remained a fugitive since the unsealing of the indictment in this case
KVP also obtained a stay on a “Red corner notice” against him was which issued on April 11, 2014. This notice was issued after Firtash’s arrest on March 12, 2014.
The Boeing angle
Boeing, the leading airline manufacturer was facing a severe shortage of titanium while they were preparing to roll out its flagship 787 Dreamliner. The shortage was so much that it had to halt its production.
Boeing reached out to McKinsey & company to evaluate a proposal to mine titanium in India through a foreign partnership financed by an influential Ukrainian oligarch as per the reports.
McKinsey & Company is a consulting firm known to resolve potential roadblocks and is an expert particularly dealing with “difficult” countries and their government (in this case India)
As part of proposal McKinsey included the names of “8 undisclosed Key Officials” that were part of the potential partner’s strategy for gaining the influence including paying bribes to obtain the license for mining Titanium Products.
Hence, it should be noted that McKinsey was aware of the illegality in the partner’s plan to obtain the required license and chose not to advise.
Also, as per reports, Boeing had tentatively agreed to buy Titanium through Bothli Trade AG, a company controlled by Firtash (a defendant in this case).
The deal ultimately fell through and Boeing managed to procure the Titanium from other sources. Neither McKinsey nor Boeing was charged in the case, and Boeing has not been accused of paying bribes, the NYT report said [1].
Indictment Proceedings and Progress
After the indictment was made public by Department of Justice (DOJ) there were no serious actions taken by the Government of India as well as investigating agencies against the influential defendant (KVP Rao) both by Manmohan Singh government or Modi Government.
KVP also obtained a stay on a “Red corner notice” against him was which issued on April 11, 2014. This notice was issued after Firtash’s arrest on March 12, 2014. On April 28, 2014, the high court asked the CID to refrain from proceeding further on the Interpol notice issued against Rao. The court also issued similar notices to the centre and the CBI.
It is worth noting that Firtash never outrightly denied bribing Indian officials in the petition.
One of the reasons this case has been quiet in India as the main accused is a prominent politician who is connected across the party lines. This reflects a lack of political will and lack of actions from investigation agencies to get the culprits in books.
The main defendant Dmytro Firtash was arrested by Austrian authorities as per the request from FBI, he was released on bail a week later after paying the surety bond (125 Million Euros) which is largest in Austrian History but was asked not to leave the nation.
Firtash challenged the US attempts for him to extradite with an argument that “… there is no allegation that Indian authorities have pursued, or are pursuing, any criminal charges related to this case. If India had an interest in bringing a criminal case related to facts set forth in the Indictment it could have,” Firtash’s motion petition in court had said, as per the report.
However, it is worth noting that Firtash never outrightly denied bribing Indian officials in the petition [2].
“As per the reports of US Government’s consolidated response to defendant Firtash’s and Knopp’s motions to dismiss indictment – this is a case that does not concern India alone: this enterprise carried out its illegal activities here, within the territory of the United States, over the span of several years, and it is this country in which the enterprise hoped to sell millions of pounds of illegally obtained goods. That said, both India and the United States have signed international treaties that commit both parties to criminalize efforts to bribe foreign officials; both countries are parties to the Palermo Convention and the UNCAC, which specifically provide that the signatories will take measures to prosecute the bribery of foreign officials. It is not unreasonable for the United States to comply with its international legal obligations, particularly where India has agreed to participate in the very same international framework. And, if there is any issue that must be resolved with India, that is a matter “for the political branches to resolve with their counterparts in [India], rather than matters for the judicial branch.” [3]
What next?
The Indian government needs to follow up with the American investigation agency and take action against KVP Ramachandra Rao and his associates who are involved in the #TitaniumBribegate case
As and when it gets underway, the Chicago trial will rake up the decade-old titanium mining case and raise questions about where the payoffs went and why the NDA government has dragged its feet over the matter. Though the DOJ indictment helpfully confirms that “there were in force and effect [at the time the alleged acts were committed] criminal statutes of the Republic of India prohibiting bribery of public officials, including the Prevention of Corruption Act, 1988″, the governments of India, Andhra Pradesh and Telangana have shown no interest in launching a probe [4]
References:
[1] 2003: Boeing over Titanium deal nyt report – The Quint
[2] Firtash KVP Mining bribery – The wire
[3] US agencies on Firtash –globalinvestigationsreview.com
[4] Firtash KVP Mining bribery – The wire
