Who is Ottavio Quattrocchi

Who is Ottavio Quattrocchi

From Wikipedia

Ottavio Quattrocchi is an Italian businessman who is being sought in India for criminal charges[1] for acting as a conduit for bribes in the Bofors scandal.

Quattrocchi”s role in this scandal, and his proximity to Indian prime minister Rajiv Gandhi through his Italian wife Sonia Gandhi, is thought to have contributed to the defeat of the Congress Party in the 1989 elections. Ten years later (1999), the Central Bureau of Investigation (CBI) named Quattrocchi in a chargesheet as the conduit for the Bofors bribe. The case against him was strengthened in June 2003, when Interpolrevealed two bank accounts, 5A5151516M and 5A5151516L, held byQuattrocchi and his wife Maria with the BSI AG bank, London, containingEuros 3 million and $1 million, a “curiously large savings for asalaried executive”[2].In January 2006, these frozen bank accounts were unexpectedly releasedby India”s law ministry, apparently without the consent of the CBIwhich had asked for them to be frozen[3].

On 6 February 2007,Ottavio Quattrocchi was detained in Argentina on the basis of theInterpol warrant. The Indian investigating agency CBI came under attackfor putting up a half-hearted effort towards his extradition[4]and India lost the case for his extradition in June 2007, the judgeremarking that “India did not even present proper legal documents”[5]. Embarrassingly, India was asked to pay Ottavio”s legal expenses.

Ottavio”s financier son, Massimo Quattrocchi, grew up with Sonia Gandhi”s children Rahul and Priyanka Gandhi,who are currently rising through the political hierarchy in India.Massimo currently advises the Luxembourg-based firm Clubinvest onbusiness opportunities in India. He visits India frequently, and runsan office in Bangalore.[6] [7].He was present in India at the time of his father”s Argentina arrest inFebruary 2007, and there is speculation that he may have met Priyanka Vadra around that time[8].

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Quattrocchi, born in MascaliCataniaSicily, arrived in India in the mid 60”s as the representative of Italian oil and gas firm Eniand its engineering arm Snamprogetti. His family became close to theGandhi family based on their connection with Rajiv Gandhi”s Italianwife Sonia Gandhi, now the president of the ruling Indian National Congress party. The Special judge Prem Kumar observed in his order of November 14, 2002:

Around 1974, Quattrocchi was introduced to Rajiv Gandhi and SoniaGandhi by an Italian named Mr. Molinari. Then Mrs. and Mr. Quattrocchistarted visiting Rajiv Gandhi and Sonia Gandhi. Children of both sideswere frequent visitors to each other. At that time Rajiv Gandhi was apilot in Indian Airlines; Italian food and other gifts were also beingexchanged between them. Quattrocchi thus became very close to RajivGandhi and his wife[9].

Their children grew up together, and based on this friendship,Quattrocchi had become so influential at the office of the PrimeMinister “that bureaucrats used to stand up when Quattrocchi visitedthem”[10]. Ashok Malik notes in The Pioneer:

From roughly 1980 to 1987 – Indira Gandhi”s final years and RajivGandhi”s honeymoon years – Quattrocchi had the Midas touch. No deal wasrefused to him. “It was understood,” remembers a Congressman from theoriginal Mrs G”s days, “that a fertiliser contract meant Snamprogetti. That was considered the favour to Sonia and Rajiv.”[11].

That his influence extended to ministers was noted by VP Singh, who initially pursued the Bofors scandal, and whose testimony is summarized in a court judgement:

V.P. Singh, Finance Minister in the Rajiv Gandhi Cabinet, hasstated that Quattrocchi had sought appointment with him on a number ofoccasions but he did not give him any appointment. Rajiv Gandhi thenasked him to meet Mr. Quattrocchi … The link between the publicservants, politicians and Quattrocchi looms large in these deals. Theaward ofJagdishpur Fertilizer Plant to Quattrocchi, changing earlier decision for SPIC, is a clear case.[9]

He won about 60 projects for Snamprogetti, including:

In the process, it also became known that for contracts with India, Quattrocchi was the man to approach.

When orders did not go through, as in the Hazira-Bijapur-Jagdishpur (HBJ) pipeline (1985), where Spie Capag of France had “bid a few hundred crores lower”:

Vengeance was swift. Nawal Kishore Sharma lost his job as petroleum minister and was reduced to Congress general secretary. PK Kaulfound his term as cabinet secretary ending prematurely and was sent toWashington, DC, as ambassador. The petroleum secretary, AS Gill, nevermade it to contention for cabinet secretary. The chairman of the Gas Authority of India, HS Cheema, was removed[11].

[edit] The Bofors Scandal

In 1984, a tender was floated for Howitzer guns for the Indian Army.On evaluation, the French Sofma gun was found to be the best in termsof price and features. The Army needed a range of 30 km; Army chief Krishnaswamy Sundarjifavoured the Sofma because in field trials showed its range as 29.2 kmagainst 21.5 for Bofors. Furthermore, as was revealed much later,Bofors was (illegally) permitted to alter its bid without re-tendering[12]. Eventually, despite the objections of the army and others, the order went to Bofors.

The Bofors scandal erupted after a 1987 report on Swedish radio,claiming that Bofors had paid bribes to secure the contract. A firmcalled AE Services was named – it was found to have a paid up capitalof lira 100, and no employees[13] The reporter Chitra Subramaniam of The Hinduobtained the private diary of Bofors MD Martin Ardbo, which revealedcomments such as “Q”s involvement may be a problem because of closenessto R.”. The identity of “Q” became clearer when Chitra identified theSwiss bank where the AE Services” money went to, and determined that itwas operated by Ottavio Quattrocchi. These were subsequently reinforcedby the documents obtained by CBI from Switzerland, but these wereeventually ruled out in court because they were photocopies, and notoriginals.

Once the scandal broke, the ruling Congress Partycame under severe fire, eventually losing the elections in 1989. InJuly 1993, the Swiss courts had permitted naming the account operators,and Quattrocchi had been officially named. At this point, CBI attemptedto question Quattrocchi, and permission was sought to impound hispassport[14]. However, just before Quattrocchi could be detained, on the night of July 29-30 1993, Quattrocchi left Delhi for Kuala Lumpur. It was alleged that he had been let off as part of a deal between Sonia Gandhi and the-then prime minister PV Narasimha Rao[11].

In March 1999, Quattrocchi gave an interview claiming that neverreceived any payment from Bofors, and that he did not have “anyconnection with A.E. Services”[15]. Around the same time, Sonia Gandhi spoke up for him in her first press conference

The CBI has found him suspect. But we have not seen till today the papers that he has done something[16].

On October 221999, with the BJP-led NDA government in power, the Central Bureau of Investigation(CBI) filed a chargesheet against Quattrocchi, naming AE Services as afront company run by Quattrocchi and his wife Maria. Based on 500documents released by Swiss banks after protracted legal delays, the CBIframed charges against Quattrocchi and his wife, Maria; WN Chadha andhis wife, Kanta. Among the conspirators named in the case were RajivGandhi, and some other party functionaries. Chitra Subramaniam showedthat Quattrocchi, through A.E. Services, had been paid 3% of the sale,about US $ 7 million, as commission.

Attempts to extradite Quattrocchi from Malaysia failed owing to lackof compelling evidence and in 2003 Quattrocchi returned to Italy. Ithas been reported that Indian requests for extradition or serving theInterpol warrant were turned down by Italy, who have requested to seethe evidence and prosecute Quattrocchi in Italian courts[17].

On February 52004 the Delhi High Court quashed the charges of bribery against Rajiv Gandhi and others,[18], citing inadequate evidence that any of the commission was actually paid to them. Sonia Gandhi celebrated:

After 17 years of abuse and vilification, it”s a special moment today for me and my children, Rahul and Priyanka.[18]

However, the case was not dead; two charges – cheating, and causing wrongful loss to the Government, continue in the courts.

Meanwhile Win Chadha also died.

On May 312005,the High Court of Delhi dismissed the Bofors case allegations againstthe British business brothers, Shrichand, Gopichand and Prakash Hinduja,a main point was the technical issue that the CBI had not certified thephotocopies of the vital documents from the Swedish authorities it hadsubmitted to the court[2].

[edit] De-freezing of accounts

In June 2003, a London branch of the Swiss bank BSI AG was found bythe Interpol to have two accounts held by Quattrocchi and his wifeMaria, containing Euros 3 million and $1 million. These accounts werethen frozen upon the request of the CBI. Several appeals by Quattrocchito de-freeze these accounts were turned down by British courts, basedon vigorous marshalling of evidence by the CBI.

However, on December 222005, the Indian government position changed rather suddenly. The law minister Hansraj Bhardwajdeputed the additional solicitor general of India, Mr. B. Dutta, toLondon to specifically request release of these accounts. However, itappears that the law ministry never consulted the investigating agency,CBI in this matter[3].

According to an e-mail from the British authorities (cited in India Today),

“Mr Datta conveyed his instructions on behalf of the Government ofIndia, the Ministry of Justice and the Central Bureau of Investigationthat no useful purpose will be served by maintaining the RestrainingOrder dated July 252003, as there is no longer any reasonable prospect of the case against Mr Quattrocchi proceeding to trial.”[19]

On January 162006,a Public Interest Litigation was filed in the Supreme Court, and theCBI was ordered to ensure that the money was not withdrawn until thereasons for the government decision were clarified. The CBI asserted incourt that Ottavio Quattrocchi was still wanted in charges related toBofors. It has been alleged by a writ petition in the Supreme Courtthat B.B. Dutta may have acted under orders from the law minister Hans Raj Bhardwaj and that the CBI was most likely not consulted[20].In any event, by the time of the Supreme Court decision, the amount ofmore than US$4 million, had been withdrawn from these two accounts.

The issue caused parliamentary criticism of the government action,[21], and also weakened the position of Sonia Gandhi[22],coming as it did within a year of the coalition led by her coming topower in the 2004 Elections. The main case against Quattrocchicontinues to trickle through the Indian court system[23].

[edit] Arrest in Argentina

On 6 February 2007, Quattrocchi was detained in Argentina on the basis of the Interpol warrant. The events unfolded as follows:

  • Late January, 2007: Ottavio Quattrocchi, despite having a warrant from Interpol in his name, takes an Alitalia flight from Italy to Buenos Aires, where he spends a few days, before proceeding to visit the Iguazu Falls. This area is a prominent tourist attraction, but is also a drug and terror alert region[24].
  • February 62007: At Iguazu, Quattrocchi goes over to nearby Brazil but is detained at Iguazu airport on his return on the basis of an Indian arrest warrant for “Falsification of Documents”, later shown to be illegal by the Argentine court that tried Quattrocchi.
  • February 8: Interpol informs CBI about Quattrocchi”s detention
  • February 13: The CBI responding to the Indian Supreme Court on a matter relating to money withdrawn by Italian businessman Ottavio Quattrocchi, does not mention the fact of Quattrocchi”s detention. CBI admits later that it had this information at the time. Agency director Vijai Shankar is facing contempt of court charges in the matter.
  • February 23: CBI releases a statement about Quattrocchi”s arrest in Argentina:
It has been informed by the Argentine authorities throughdiplomatic channels that Italian national Ottavio Quattrocchi, anaccused in CBI Case RC.1(A)/90-ACU.IV/SIG (Bofors Case) and subject ofInterpol Red Corner Notice # A-44/2/1997, has been detained and takenin preventive custody on February 62007. Quattrocchi was detained at Iguazu International Airport in Argentina province of Misiones while in transit to Buenos Aires.
  • February 24: The opposition party BJP claims that this late release of information was orchestrated by the Congress government to avoid embarrassment to Sonia Gandhi during the ongoing state elections in Punjab and Uttaranchal[25].
  • February 26: Quattrocchi released on bail. It appears that the CBI/India was not represented in the matter. On the other hand, the Italian government supported Quattrocchi, with the Consul General of Italy being himself present in court[17].
  • March 2: The CBI sends a team to fight the extradition case coming up for which papers need to be filed by March 7. An English speaking lawyer is appointed by CBI[24].
  • June 9: The request for the extradition of Ottavio Quattrocchi is rejected by the court of El Dorado, Argentina on three counts: 1) The 1997 arrest warrant which specified as a motivation, “falsification of documents” was deemed to be illegal and based on an unsubstantiated accusation, 2) The 1997 arrest warrant had in any case been “used” by the prior arrest of Quattrocchi in Malaysia, 3)Arrest warrant and court order issued after the arrest of Quattrocchi, on February 23, 2007 was deemed to be arbitrary. The detailed judgment commented that “the CBI”s request was not backed by ample judicial documents”[26]. In a final blow to the CBI, the investigative agency was also to pay the legal fees of Quattrocchi.

[edit] Allegations re: Massimo Quattrocchi

At the time of the Argentine arrest, Massimo Quattrocchi was hadpurportedly been in India for seven months. He had arrived in New Delhion July 21, 2006, on Lufthansa flight 760, and left by Lufthansa flight761 on February 22[27][28].

There was a sixteen day delay between when the CBI was informedabout Quattrocchi”s arrest in Argentina (February 7) and when theinformation was made public (February 23, the day after Massimo”sdeparture). This together with the failure by CBI to explain theirreasons for the delay has led to speculations on a possible Massimorole.

The CBI director, Vijai Shankar explained the delay saying that ittook time to translate the documents from Spanish, but this explanationappeared lame, and it turned out to be false since the intimation wassent by the Indian Embassy in English[29][30].This delay, similar to the delay in informing the public about thede-freezing of the accounts, remained unanswered, leading toconsiderable speculation.

On February 17, Massimo was allegedly seen at a party thrown by the brother of Rajya Sabha MP Baijayant Jay Panda of the Biju Janata Dal, where Priyanka Vadra was also present.[31]. Any meeting between Priyanka and Massimo was vigorously denied by Congress General Secretary Digvijay Singh, but when interviewer Karan Thapar asked him how he knew, he simply repeated the denial[8]. Subsequently however, it was reported that the agencies were investigating his presence at the party, at the instance of Rahul Gandhi[32].

The presence of Massimo in this crucial period has led to charges bythe opposition parties that Massimo, who grew up with Priyanka andRahul Gandhi, may have influenced the highest levels of the Indiangovernment resulting in the inept CBI legal process that lost the casein Argentina[33].However, the Congress spokesman blamed the loss in Argentina to earlierNDA government incompetence: “we lost to three courts in Malaysia”[34].

[edit] Damage to the Congress Party

The Bofors scandal is now two decades old, and Ottavio Quattocchihaving been named as the main beneficiary in the payoff continues tohurt Sonia Gandhi. The position of the law minister Hansraj Bharadwaj has been compromised[3], and the integrity of the prime minister Manmohan Singh, has also been brought into question[20].

Clearly the Congress Party is paying a high price for Ottavio”s namebeing associated with the scandal. In the circumstances, the mostpoignant question, raised nearly a decade ago by the investigatingreporter Chitra Subramaniam, is why, if the Gandhis were not involved,can”t they get their friend to testify?:

if Rajiv Gandhi was not involved then he should have found out who was involved instead of blocking the investigation.[35]

Similar questions are being asked today: If Sonia Gandhi”s image wasto be protected, why were the bank accounts unfrozen after theCongress-led government came to power?[3] These questions continue to fuel interest in the Ottavio Quattrocchi saga.