STOCKHOLM. June 2
As expected, and unlike our experience with commissions that we set up in India and the inquiries we institute. Sweden's Audit Bureau (RRV) has stuck to its deadline and submitted its report to the Government as, scheduled. But the conduct of the Government, since the submission of the report, should be an eye opener to many who have hoped that the Swedish Government will do our work for us. Even though the report has not been made public, from my conversations with a spokesman of the Audit Bureau as well as leading public men and pressmen in Sweden and, finally, from the brief, but revealing press announcement that the Audit Bureau issued, three things are clear.

First, in spite of the report being secret uptil now there is no doubt, that it confirms that illegal payments have indeed been made by Bofors into numbered accounts of Indians in Switzerland. The carefully worded statement that the Bureau has issued itself gives the clue. Recalling the refusal of Bofors to co-operate, a matter to which I shall revert in a moment, the statement says,"Despite this the Bureau has been able to examine certain payments made in connection with the Bofors' safes of field howitzers to India".

But this explicit statement apart, I have received direct confirmation about the conclusions from the spokesman of the Audit Bureau, This afternoon, recalling the sentence from the press statement, I asked Mr Ante!!, the spokesman of the Bureau, "Are you therefore saying that the Audit Bureau has confirmed that illegal payments have been made by Bofors to Indians?"

Mr. Antell replied. "Well, we have examined documents in connection with that".

I backtracked and rephrased the question "As you are not asserting that illegal payments were not made, can we take it that you Bureau has found that such illegal payments have in fact been made?"

"Well, that would be the meaning, would it not? Yes, that is what we are saying”.

Second, Bofors. in spite of what they had been saying, did not cooperate with the Bureau. They took the plea that doing so would breach "commercial confidentiality". This persistent concealment itself has strengthened the presumption that they violated the undertaking they had given to the Indian Government and. even more important, that they made illegal payments in connection with the sale of the 155 mm guns to India.

Third, it is clear that while Bofors did not disclose all the relevant documents to the Bureau, the latter was able to obtain some of the documents from other sources, including the customs authorities, the Central Bank, Swedish Radio and others.

The most worrisome part, however, is that conversations with persons in Government and out leave one with the distinct impression that the Swedish Government will not make public the full report of the Audit Bureau. Most observers here feel that the Government will reveal the barest minimum. It will send a diplomatically worded gist of the report to the Government of India and then it will be entirely up to the Indian Government to determine what it will reveal or not reveal. To understand the attitude of the Swedish Government and the reasons on account of which we cannot expect a full disclosure from Sweden, it is necessary to recall the background to these recent developments. The main point that stands out is that while we are naturally exercised about the payments that might have been made by Bofors to Indians, this is a very marginal issue as far as public discourse of Sweden is concerned.

Chequered past

Around March 23, 1986, when the Government of India signed the contract with Bofors for the supply of a certain number of 155 mm towed howitzers, this reputed weapons manufacturer was already in the midst of at least two other major controversies.

The first, of longer standing and into which a separate customs inquiry concluded only on May 26, relates to the export of explosives and gunpowder to Iran. Syria and Egypt. The second, which was just about surfacing in March 1986, is about the export of Swedish missiles, Robot-70, which is similar to the US missile Stinger, to Singapore. The allega-tions in the second case are that Bofors A.B., through its 40 per cent owned subsidiary, M/s Allied Ordnance of Singapore, ostensibly sold these missiles to Singapore, which resold them to Bahrain and Dubai. The final receiver of the Swedish missiles, it is alleged, was Iran. Thus,' Bofors is accused of violating, in both cases, the Swedish law that forbids sale of war materials or military ordnance la nations at war or situated in areas of military tension.

The Swedish public and media, however, are ever watchful for violations of Swedish norms and laws. In the case of export of gun powder to Iran. Syria and Egypt, which was handled by Nobel Kemi. a subsidiary of Bofors a criminal investigation was launched by Swedish customs about two years ago.

The complete report of this investigation, made public last month, is a full of evidence and findings. Yet after its presentation, when the Swedish public prosecutor. Mr Stig Age chose to charge only one employee of the company. Mr Mats Lundberg, a former marketing director, there were cries of "Oliver up"'. Those that charge so. allege that when a full 35 per cent of the total output of Nobel Kerni was illegally exported between 1981-85, how was it possible that the top management of the. company remained ignorant about it and, thus, escape prosecution.

The defence, on the other hand, is somewhat involved and strongly reminiscent of similar sleights of hand back home. The prohibition, the defence contends, is against exporting to countries at war. Sweden exported to Austria, Italy. West Germany and Yugoslavia, they say, adding that as for re-export to countries at war and the continued prohibition on it they cannot be held responsible "if the gun powder/explosive is reconverted and then sent forward". On this key issue of re-export only, after "conversion", a purely legalistic plea is taken that even re-packing, that is using different packing cases, might amount to "conversion". A great pity that Bofors cannot here take shelter behind Indian Supreme Court case laws on the subject.

On the other issue of export of advanced weapons, rocket systems etc., Bofors admit having doing so, but say their supply was meant for Singapore. Besides, they assert, what is wrong with supplying weapons to Bahrain or Dubai? There is no answer for questions like: "Why does a tiny city state like Singapore need such sophisticated weapons sysr terns", or "if you (Bofors) want to sell to Bahrain or Dubai why not do so directly?"

In trying to avoid the quagmire of West Asian politics, Bofors have landed themselves in another controversy—a separate police inquiry has been ordered into this alleged transgression. No time limit for the inquiry has been set. Before this was done, however, the Swedish Parliament asserted itself. It has a standing committee called the constitutional committee. This body had inquired into the weapons exports and had commented critically upon the role of Mr Mats Hellstroem, who as a consequence, was shifted from his portfolio of foreign trade to agriculture. This controversy, however, appears already to have taken a more tragic toll: the former inspector general of the War Materials Inspectorate, Mr Algernon, is believed to have committed suicide because of charges of permitting illegalities. There is speculation about the fact that he committed suicide after meeting Mr Carl-gren, then chairman of Bofors. This coincidence, of the meeting followed by the suicide, are being remarked upon.

It is in this background, in the midst of Bofors being involved in many domestic controversies, that India concluded its contract with them. And it is in this light that we have to examine the conduct of the Swedish press, particularly the Swedish Radio.

Divergent views

One cannot but be struck by the deep irony of two specific aspects here. Firstly, in the scandals currently raging around Bofors, Sweden and India do not have the same priorities. What the Swedish public, press and media are more concerned with are questions of illegal exports of arms, explosives and gunpowder, not with payments that might have been made to anybody to facilitate arms sales. Payment of commissions is not a crime in Sweden, it is not so in India either. In the particular instance of the deal involving 155 mm Howitzers, it becomes so in India only because of the Indian Government's somewhat impractical and legally untenable stand that there will be "no middlemen". Detection of such an illegality, then naturally, acquires prominence with us, whereas in Sweden almost everybody that I have talked to treats it as a bit of nuisance, the earlier got rid of the better. Without exception, all have commented: "It is your responsibility, why do you not handle it yourself. Why involve us?" Why, indeed.

The other irony lies in the knowledge, derived since coming here, that Swedish Radio but chanced upon the Bofors-India controversy. The Swedish Radio is a professional organisation, which, as a prominent Swedish commentator put it "might be owned by the state but is not controlled by it". The main personalities of Swedish Radio, involved with the Bofors-India controversy, candidly admit that during the early stages of their investigations, they were not interested in the India deal at all. While routinely investigating other transactions by Bofors, they came upon certain banking documents which established payments by Bofors, as commissions, into Swiss banks. "If payments were to anonymous Swiss accounts, how did you conclude that they were necessarily to Indians", I inquired of them. Firstly, they explain, because some officials have themselves confirmed so. and secondly, who else would Bofors pay such large sums of money but Indian interests, when, during the last year or so, that is the only country with which they have done substantial business. They further admit that they are themselves now struck by the sheer magnitude of the controversy raised. They had really not expected it. They do not seem to be overburdened with concern about charges of their linkage with Fairfax or questions about their Hong Kong-based correspondent. "All the information originated here, not in Delhi or Hong Kong.

We used it (the information) routinely, not with any eye on What was then happening in. India", they assert.

To the suggestion that they now settle the issue finally by making public those documents which they claim are in their possession, their stand continues to be the same, of protecting their "sources of information". When it was pointed out thai Swedish law, in fact, explicitly prohibits the investigation or disclosure of sources, that an informant's position is legally unassailable in Sweden and that the identity of the "source"' is neither necessary nor material as evidence under Swedish law, not just the Swedish Radio, but many others also commented, "technical protection under law is no protection against prejudice". Swedish Radio asserts that the Audit Bureau has scrutinised the main material on which they (the Radio) had relied and it is their hope that in the report, which has just been submitted, there is mention of all this. "And what if it is. not", I asked. Their reply: 'We will then have to re-think our position".

Outside of the Swedish Radio, there are some other sources as well that have, independently, both claimed knowledge about and confirmed that payments were made to "Indian interests". One, in particular, even offered names, saying that this information had actually been given to him by "a high official of Bofors two weeks before the Swedish Radio broadcast their news". But as this information had reached him "casually" and as payment of-com-missions is hardly an irregularity "no special note was taken of it". All are, however, waiting for the Audit Bureau's findings to be made public.

The Bureau is an organ of the state, meant essentially to look into the activities of the various departments of the Government, not unlike the Indian office of the Comptroller and Auditor General. When, therefore, the Government of Sweden asked this body to look into the affairs of a private company, some speculation was raised. "It might be," somebody said, "because the late Mr Olof Palme had conveyed Bofors' assurance about no middlemen to the Indian Prime Minister, the Government of Sweden is indirectly drawn in and it wants to clear its own name. Had Mr Palme been alive, of course, he would have had a lot to say on the subject. Now only a state agency can conclude authoritatively on the subject". As to what it (the Bureau) might have actually established, there appear to be mixed faews: "Four or five years ago, we would not even have thought twice about the matter. Without hesitation we would have confirmed that there will be no playing with the truth if the R.R.V. is inquiring into an issue. Not so anymore", observed an elderly public figure. "See what the publii prosecutor has done with the custom investigation into Bofors", he said Whilst the* reputation of the Audi Bureau continues to remain high reinforced no doubt by the fact tha its current chairman, M* Ingema Mundebo. a liberal politician and ; former finance minister of Swedei who is held in high esteem, ha( himself asked to be assigned the task there is nevertheless- somt apprehension that the Bureau rmgh have gone "only half the distance" The two other principal members o the team which investigated the Bofors-India controversy are M' Sartdberg, a director of RRV, and Mi Ulf Gometz, who belongs to a privat< firm of auditors. With the contents o ihe report still under wraps, there i: only speculation about what it i likely to. contain.

Speculation rife

What then are some of the point of speculation? The major one o course, is all about what the Swedish Audit Bureau might or might no reveal. Here, few even bother to ' speculate as to whether commission: were actually paid or not — "of course they have been, it is routine' commented a noted journalist. "We Swedes might not be terribly expert at the game, but we are adult enough to know the realities of life, particularly of trade in arms." Naturally then, speculation centres around the identities of the persons to whom these monies were paid. Here again there appears to be a surprisingly short list of possibilities. No one outside of Bofors is ready to come forward with categorical evidence, yet amongst those who do claim knowledge, there is near unanimity: "The Hinduas have got it, but they are only a conduit, merely distributors. They have been helped by their old contact and business partner in Bofors — Lennart By lock. A little bit has also gone to the Bofors agent in India, but that was due to him in any case".

This is an interesting and a complex relationship, between the Hindujas and By lock about which we shall talk later. Let us first dispose of speculations here about the quantum of amounts actually paid. The original report from Swedish Radio had spoken of figures around Swedish kroner 130 million, paid in three lots in November-December 1986. Subsequently, they announced that there is in the "contract", as an "appendix", a document which binds Bofors to paying a three per cent commission on the total. This, if true, would be a staggering sum of money, unusual even for arms traders, amounting to a mind-boggling total of $ 45 to 48 million. "What basis do you have for this assertion, do you have evidence of it and how can you assert that all this is part of the contract, when the Government of India has specifically excluded middlemen", I asked the Swedish Radio.

They reiterate having considerable evidence in their possession, which they assert, goes towards establishing ; these payments. As for the document, alleged to be part of the contract, they admit to not having f seen it themselves. "It is based on; information received." They explain further: "When the Swedish Central Bank, (the equivalent of the Indian ; Reserve Bank), received a request from Bofors for payments into Swiss s accounts, categorised in the vouchers as commissions", the amounts involved were so large that the Central Bank took the precaution of rechecking the figures with Bofors. Where upon, the managing director of Bofors is himself believed to have taken this paper to the Central Bank and pointed out to them the contractual nature of it. The payments, thus, having been cleared, were accordingly made, some, it is alleged, as early as May 1986, between which date and the end of 1986, a major portion of this three per cent commission was paid.

The next logical speculation, therefore, relates to whether or not the 'Audit Bureau would be in possession, of this information as well. "In all likelihood, of course,"assert all ) those who know anything about the matter. However, a caveat is added: "But the Bureau might not have drawn any conclusions. It might simply have reported the fact of payments having been made, granting Bofors the protection of commercial confidentiality. Naturally, the Bureau would not even attempt to investigate behind the curtains of Swiss accounts, leave alone investigate the 'Indian interests' part of it.' Sweden is, thus, not terribly over anxious about speculating on that amounts actually paid as commissions, how, when or even to whom they were paid, except that the Hinduja-Bylock combine intrigues then greatly.

There is then considerable natural interest about the role that Mr Olof Palme played in securing for Bofors; this valuable contract. "He was their best salesman". But here again speculation is rife, not because he is suspected of any financial malfeasance, but on account of the fact that there exists knowledge of previous legal short-cuts taken by Bofors in their arms trade. Finally, there is concern about the performance of the present Swedish Government, in the face of all these controversies. It, like ours, is the inheritor of a dominating past, which, even in decease, judges the conduct of its successor. "Are they standing up convincingly to the challenges of today?"

Conclusion

It should be clear, therefore, that as far as the Swedish Government is concerned the dealings of Bofors with India are a hot potato which they want to get off their hands. Getting at the facts, which are all-important from our point of view, is not a primary or even an important concern of the Swedish Government. It is not an important concern even of the Swedish media and Swedish parliamentarians. Their Government does not want to get involved in this issue. The Swedish Government's main interest is to hand back the problem to the Government of India with as much civility and diplomatic finesse as possible. The only other anxiety that the Government and others here have is that they should not jeopardise a very large commercial deal which is so important for Bofors and for Sweden. Not that there is no chance at all of getting the Swedish Government to disclose the entire report. The initial decision of the Government to stall till Thursday has created a major controversy in Sweden as such concealment is still exceptional. A leading figure of the opposition tells me that if the Swedish Government sends the report to the Indian Government it will not be able to keep it : from the Swedish media and Parlia-: ment, not because people are interested in the payments per se but because they do not want to sustain such a major blow to the right of the people and Parliament to know what their Government knows and is prepared to tell another government. And also because Bofors itself remains a major preoccupation in : Sweden. Thus, three things are clear. Illegal payments have been received by Indians. Second, facts about these have been established by the Swedish Audit Bureau. But, and this is the all important third point for us, while we can expect some help from the processes of Swedish society, we-will have to do most of the work ourselves to have the names of the recipients disclosed if the guilty brought to book. For this the first step must be for us to have Government obtain the Audit Bureau's report in full and to lay all of it before the people and Parliament.