2G scam note warned PM!!!

The brazenness with which arrested telecom minister A Raja bent rules to distribute telecom licences and 2G spectrum allegedly in exchange of bribes could not have surprised Prime Minister Manmohan Singh.

An internal note warned Singh that the telecom ministry under Raja intended to ignore advice to refer allocation of 2G spectrum to an empowered group of ministers (EGoM) and that such a course of action violated rules of government business.

The note, put up to the PM in November 2007 in the wake of rising concern over Raja's bid to ram through the 'first-come, first-served' policy, clearly said that differences between law and telecom ministries over the need for wider consultations should be resolved by the Cabinet.

The PM did ask his office to examine issues, but despite the pitfalls in Raja's interpretation of his policy domain, the DMK leader not only pushed ahead with his controversial implementation of his preferred policy but also managed to subvert the cabinet system in the process.

If these revelations contained in PMO and Cabinet Secretariat's communication with the Public Accounts Committee find reflection in the committee's report likely to be submitted this week, it will set off fresh confrontation between the government and opposition. The PAC, headed by BJP leader M M Joshi, is expected to refer to systemic failures in the 2G episode.

The PMO assessment followed Singh himself asking his office for a note on "whether the action proposed to be taken by the (telecom) ministry is correct or not; whether it is justified in doing what it plans to do." Raja had insisted in a November 2, 2007 letter to the PM that the EGoM route was "totally out of context''.

Significantly, the PMO is not clear on whether it should have stopped Raja from having his way. Responding to criticism that it failed to ensure his adherence to the 2003 Cabinet decision that pricing of airwaves be jointly decided by telecom and finance ministries, the PMO told the PAC, "Not giving effect to a Cabinet decision is tantamount to varying or reversing the same… it is incumbent on the department to bring it before the Cabinet."

However, it did not agree that PMO was mandated to ensure the former telecom minister played by rules. "There is no specific requirement for PMO to enforce cabinet decisions nor is this the general practice," PMO told the committee.

With regard to then finance minister P Chidambaram's January 15, 2008 letter on the need to review telecom ministry's decision to price spectrum, the PMO said: "Prime Minister saw the finance minister's note. No action was formally taken by PMO on the note." It also said that Chidambaram's objections seem to have been resolved by July 2008.The response is in sync with the PM's assertion that in the final analysis finance ministry agreed with Raja's stand that spectrum need not be auctioned.

Both PMO and Cabinet Secretariat make it clear that the decision in December 2006 to delete pricing of spectrum from the terms of reference of a group of ministers set up in February was approved by the PM. The PMO informed Cabinet Secretariat on November 27, 2006, that the PM had "approved the revised terms of reference", on the urging of Raja's predecessor Dayanidhi Maran.

When various concerns were brought to his notice even after his November 2, 2007 letter to the PM, Raja did not budge and wrote on November 15 that he was only continuing with the existing spectrum policy.

Later on December 12, 2007, the telecom ministry candidly told PMO that new licences would be granted to those who fulfilled the letter of intent conditions. The ministry anticipated a rush of applicants as it said "an applicant who fulfils LoI condition first will be granted licence first, although several applicants will be issued LoI simultaneously."

Raja assured the PM that "discussions with the external affairs minister and the solicitor general (Goolam Vahanavati) have further enlightened him to take preemptive and pro-active decisions. PMO says that it outlined a course of action for the PM's consideration but does not spell it out.