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Go Back   Armchair General and HistoryNet >> The Best Forums in History > Current Events > South Asia and World Terrorism

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South Asia and World Terrorism Discuss the War in Afghanistan, civil war in Pakistan, and events around the Indian sub-continent.

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  #1  
Old 16 Sep 17, 21:46
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Corruption in Indian Military Procurement?

India has a reputation for wanting to build their big ticket items in India. Lately it has been asked here why India wants to do this? I got my latest issue "Modern War" #32 and there is an article, "Indian Artillery Saga".

India was looking at a large artillery park nearing obsolescence in the 80's. They had lots of ex-WWII era and Soviet designs. Parts could be a problem for both groups. The Indian Defense Research and Development organization asked for bids for a new Field howitzer (410 guns, spare parts, ammunition and training). They planned on making the winner the basis for an Indian built howitzer. Bofors made a bid for its new MH77B 155 Howitzer and won.

A year later Indian investigators found there had been huge pay offs and kickbacks. They could have cancelled the deal but decided to press on. The Indians started making spare parts and eventually were capable of making the whole gun by 2010. There were improvements by using lighter and stronger metals.

The Indians also needed Light Artillery for their Mountain Divisions and Light units. They went to a BAE design, the M777. They did the deal with the US branch of BAE. This weapon could be transported by air or truck. The deal was signed in 2015.

It would appear that Indian politicians are looking for a little something extra when they announce a competition for a weapons system.

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  #2  
Old 17 Sep 17, 13:43
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Originally Posted by Pruitt View Post
A year later Indian investigators found there had been huge pay offs and kickbacks. They could have cancelled the deal but decided to press on. The Indians started making spare parts and eventually were capable of making the whole gun by 2010. There were improvements by using lighter and stronger metals.

The Indians also needed Light Artillery for their Mountain Divisions and Light units. They went to a BAE design, the M777. They did the deal with the US branch of BAE. This weapon could be transported by air or truck. The deal was signed in 2015.

It would appear that Indian politicians are looking for a little something extra when they announce a competition for a weapons system.

Pruitt
Oh, yes, there was a BIG stink over the Bofors howitzer deal already back in the late 1980's. (One Swedish military procurement official even jumped in front of an underground train in Stockholm, when the noose started to tighten around him over the pay-outs to various Indian officials.)

Funnily enough, the conclusion in India at the time was that Sweden must be one of the most evilly corrupt nations in the world, "Bofors" became a by-word for corruption, and generally it was felt that these sordid Swedes has tempted poor, hapless Indian officials to stray from the straight and narrow...
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Old 17 Sep 17, 15:57
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The same sort of thing was going on under the Raj and was one of the things that the Kitchener reforms were intended to deal with. Unfortunately Kitchener was ace at identifying problems and pants at fixing them. The previous Mogul military administration appears to have been equally corrupt. It appears to be an Indian cultural problem. that said Bofors record in WW2 is fairly amoral.
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  #4  
Old 17 Sep 17, 20:23
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Every country has this problem. How many times has a procurement officer retired and gone to work for a defense company that he recently approved a contract for?
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Old 17 Sep 17, 20:31
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The same record of corruption is found in all Indian arms procurement schemes such as the Rafale, their submarines, and destroyers.
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  #6  
Old 18 Sep 17, 06:32
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India has long been cursed by corruption at all levels. The early European adventurers quickly got their snouts into the same trough, one result was a series of enquiries and trials in 18th century Britain into corruption in Britain's Indian possessions. The defence usually offered was that this was merely the local custom and practice and they had been very modest in their own personal enrichment. Robert Clive stated that when faced with "wealth beyond the dreams of avarice" "My God, Mr. Chairman, at this moment I stand astonished at my own moderation! " Clive's moderation had resulted in a large country mansion and extensive estate. This defence was generally accepted.

The Moguls had been very effective at seizing an empire and grossly ineffective at governing it. The first emperor had tried establishing a form of civil service but most of the senior officials were hopelessly corrupt. He literally stamped out corruption - he had most of his civil servants trampled to death by elephants and introduced a system whereby private individuals provided services to the state in return for unfettered abilities to exploit the population of particular parts of the empire for limited period of time. It was rather akin to a mafia boss parcelling out who got to run which rackets and did nothing to reduce corruption - it just meant that it didn't bother the emperor - the main burden fell on the backs of the peasantry.
The British Raj attempted to remove corruption with the introduction of the Indian Civil Service but as writers such as Kipling and Candler frequently point out whilst it suppressed major corruption did little to eliminate endemic low level corruption amongst the petit functionairs
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Old 18 Sep 17, 09:57
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that said Bofors record in WW2 is fairly amoral.
I believe the situation was that pre-war the company had sold the right to license produce guns to all and sundry? The German had or got access to facilities building the guns in places like Austria and Norway, whether Bofors intended it or not.
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Old 18 Sep 17, 10:45
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Cool ...is it only tech support?

Where are India's heavy industries when it comes time to bid for military contracts?
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Old 18 Sep 17, 18:23
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Are any of these person facing jail time?
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Old 18 Sep 17, 23:16
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Are any of these person facing jail time?
Probably not.
Companies dealing with India even today may well expect to pay "Facilitation Fees".
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Old 19 Sep 17, 06:27
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Probably not.
Companies dealing with India even today may well expect to pay "Facilitation Fees".
The way it worked in my time was that the non Indian company hired Indian 'Consultants' to "provide advice on local circumstances " etc for very high fees. The'consultants handled any corrupt practices off the record which acted as a shield for companies from countries like the UK and the USA that have specific laws against bribery in 3rd countries as their books would only show the fees paid to the 'consultants'. This was not unique to India as I know from experience that much the same could be found in Pakistan (even corrupter than India). Saudi and Indonesia. In Nigeria bribery was more blatant.
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Old 19 Sep 17, 20:41
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Prior to the enactment of the Foreign Corrupt Practices Act which President Jimmy Carter signed into law on December 19, 1977, which made it illegal for American persons and entities to bribe foreign government officials there was a major bribery scandal in the US. The Foreign Corrupt Practices Act expressly FORBIDS using foreign “Consultants” as means to provide “monetary inducement” for foreign contract. Foreign sales of military hardware, the US government does a VERY thorough job of monitoring any funds associated with those efforts.

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The Lockheed bribery scandals encompassed a series of bribes and contributions made by officials of U.S. aerospace company Lockheed from the late 1950s to the 1970s in the process of negotiating the sale of aircraft.

The scandal caused considerable political controversy in West Germany, Italy, the Netherlands and Japan. In the U.S. the scandal nearly led to the downfall of the corporation, which was already struggling due to the commercial failure of the L-1011 TriStar airliner.

The U.S. Government had bailed out Lockheed in 1971, guaranteeing repayment of $195 million in bank loans to the company. The Government Emergency Loan Guarantee Board, set up to oversee the program, investigated whether Lockheed violated its obligations by failing to tell the board about foreign payments.

In late 1975 and early 1976, a sub-committee of the U.S. Senate led by Senator Frank Church concluded that members of the Lockheed board had paid members of friendly governments to guarantee contracts for military aircraft. In 1976, it was publicly revealed that Lockheed had paid $22 million in bribes to foreign officials in the process of negotiating the sale of aircraft including the F-104 Starfighter, the so-called "Deal of the Century".

According to Ben Rich, director of Lockheed's Skunk Works: “Lockheed executives admitted paying millions in bribes over more than a decade to the Dutch (Prince Bernhard, husband of Queen Juliana, in particular), to key Japanese and West German politicians, to Italian officials and generals, and to other highly placed figures from Hong Kong to Saudi Arabia, in order to get them to buy our airplanes.” The top Lockheed management implicated in the scandal resigned in disgrace.
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Old 20 Sep 17, 07:20
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Prior to the enactment of the Foreign Corrupt Practices Act which President Jimmy Carter signed into law on December 19, 1977, which made it illegal for American persons and entities to bribe foreign government officials there was a major bribery scandal in the US. The Foreign Corrupt Practices Act expressly FORBIDS using foreign “Consultants” as means to provide “monetary inducement” for foreign contract. Foreign sales of military hardware, the US government does a VERY thorough job of monitoring any funds associated with those efforts.

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Forbidding it is easy, proving it is difficult
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Old 20 Sep 17, 12:31
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“Proving it” is not so difficult when most military aircraft are sold through the Pentagon. These contracts and all associated funds are audited by the Defense Contract Audit Agency. I was manager on a couple of programs audited by DCAA and I can assure you they are VERY thorough.
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Old 20 Sep 17, 15:39
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“Proving it” is not so difficult when most military aircraft are sold through the Pentagon. These contracts and all associated funds are audited by the Defense Contract Audit Agency. I was manager on a couple of programs audited by DCAA and I can assure you they are VERY thorough.
Nope you are dealing with the wrong side of the contract and have no reliable data on what happens on the non US side, such complaisantcy would make it all too easy
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