Scandals Have Officials Afraid To Take Responsibility For Acquisitions

Sometimes US military procurement is strangled by Congressional gridlock, or special interests fighting through their lawmakers to win contracts. But in India, new reports say procurement investigations over the last 30 years have so tainted the process that government officials are afraid to take responsibility for approving contracts, for fear they'll spend the rest of their careers under suspicion.

Reuters reports the latest allegations of kickbacks and other improprieties involve the $720 million purchase of 12 AW101 helicopters (pictured) from AgustaWestland. On Monday, blogger Neil Munshi noted, "Finmeccanica’s shares fell sharply on the news and the company denied any wrongdoing. Analysts said the investigation could be a result of paralysis in (defense) procurement caused by the trauma of previous scandals."

Current AgustaWestland CEO Giuseppe Orsi was named to his post after a corruption probe was blamed for driving out his predecessor, Pier Francesco Guarguaglini. The contract which is the subject of the new reports was signed two years ago, after Orsi took the helm.

Munshi quotes Uday Bhaskar, defense analyst and former commodore, as noting the chilling effect of investigations on efforts to modernize India's military. Bhaskar explains, "India is weighed down by the (1980s) Bofors cross and the (1999 Kargil War) coffin scam. And as a result, major military inventory deals have been slowed down because nobody wants to sign on the dotted line...there would be an inquiry that would follow them forever and ever."

The original Reuters report quoted official sources at Finmeccanica, AgustaWestland's parent company, as responding, "AgustaWestland is not involved in any irregularity concerning the supply of helicopters in India. No notice related to the investigations has been served."

The new AW101 helicopters covered by the contract are intended to replace aging Russian Mi-8 models used for government executive transport.

FMI: www.agustawestland.com/news/indian-air-force-signs-560-million-contract-12-aw101-helicopters-strengthening-agustawestland