Congress MP’s Indictment In Titanium Scam Creates Ripples In Political Circles

Indictment of Congress Rajya Sabha Member from Andhra Pradesh, Dr KVP Ramachadnra Rao, by Chicago jury in the US, is causing severe embarrassment to both the Congress and its rival YSR Congress Party in the political circles. Dr Rao was indicted by a federal grand jury in June 2013 along with an Indian-American businessman and four other foreign nationals. This was announced by the US Justice Department only on April 2, 2014. His name figured in an alleged international conspiracy to bribe state and central government officials in India to allow mining of titanium minerals.

Dr Ramachandra Rao was a close associate of now-deceased chief minister of Andhra Pradesh Dr YS Rajasekhara Rao. In his government with an official status of ‘advisor to chief minister’, he played a key role in all important decisions, particularly related to contracts, postings, policy matters related to industrial groups. He has been closely associating with Dr Reddy since college days and was also known as ‘de-facto’ power centre in latter’s government. He is called ‘atma’ (heart) of Rajasekhara Reddy. Only last month, he was re-elected to Rajya Sabha as Congress candidate from the state.

As this episode is exposing alleged corrupt practices in Dr Rajasekhara Reddy’s regime, the YSR Congress Party is also now finding itself in an embarrassing position. The party was floated by his son YS Jaganmohan Reddy, after revolting against the Congress leadership for denying him chance to become the chief minister of the state as a ‘political successor’ to his father.

Dr Rao is cool

However, Dr Ramachadnra Rao was cool when he met the media over this development. Stating that he was not aware of it, he said that he had not received any communication. He simply said that he would respond only after receiving any allegations or charges from the US Justice Department. When the media people insisted on allegations, he asked, “If you have some papers, then show to me.” “I cannot say anything based on newspaper reports. After I receive communication on charges made against me, I would be able to say anything,” Dr Rao said. “I am a loyal Congressman and I am willing to face any action from the party leadership. I remained a disciplined soldier of the party and will continue to be,” he further said, adding that only a thorough investigation would ferret out the truth.

Dr Rao is still cultivating close rapport with Congress high command. According to Congress sources, he played a key role in the constitution of two Pradesh Congress Committees for Telangana and residual Andhra Pradesh. Ignoring many senior leaders, he was succeeded in getting nominations to his close associates. Although opposition parties have been accusing him of his prime role in all corrupt activities during Dr Rajasekhara Reddy’s regime, against which CBI is conducting investigation, making Dr Reddy’s son Jaganmohan Reddy a prime accused, though Dr Rao’s name was not figured in any cause. The opposition leaders on several occasions demanded inclusion of his name in those cases and also to arrest him.

Political circles, aware of his manipulative skills, are of the view that he remained with the Congress without following Jaganmohan Reddy in formation of YSR Congress Party, only to get away from those cases. Now for the first time, an unprecedented US case will provide ammunition to the opposition, irrespective of truth in allegations. The conspicuous silence on the part of Congress, TRS and BJP leaders, who are eyeing a post-poll alliance with YS Jaganmohan Reddy, on this scam reveals manoeuvre skills of Jaganmohan Reddy.

FBI charge-sheet

The scam came to light after the Federal Bureau of Investigation of the United States filed a charge-sheet in a Chicago court, naming YS Rajasekhar Reddy, KVP Ramachandra Rao and YSR’s close family member along with a Ukrainian industrialist Dmitro Firtash for their suspected roles in $18.5-million bribery for a titanium contract in Andhra Pradesh. Dmitry Firtash is the Ukrainian businessman and the others are Andras Knopp of Hungary, Suren Gevorgyan of Ukraine, Gajendra Lal of the US, and Periyasamy Sunderalingam of Sri Lanka. KVP was serving as adviser to the then chief minister YS Rajasekhara Reddy. All the six were charged with one count each of racketeering and money laundering, and two counts of inter-state travel in aid of racketeering. Five, other than Rao, were charged with one count of conspiracy to violate the Foreign Corrupt Practices Act.

According to indictment, Firtash controls Group DF, an international conglomerate of companies. Group DF companies include: Ostchem Holding AG, an Austrian company in the business of mining and processing minerals including titanium, Global Energy Mining and Minerals Limited, a Hungarian company, and Bothli Trade AG, a Swiss company.

Firtash was the leader of the enterprise and oversaw its illegal activities. He allegedly caused participation of certain Group DF companies in the project, met Indian officials, including YSR, to discuss the project and its progress, authorised payment of at least $18.5 million in bribes to state and central government officials, directed his subordinates to create documents to make it appear that money transferred for the purpose of paying these bribes was transferred for legitimate commercial purposes, and appointed various subordinates to oversee efforts to obtain the licences through bribery. Knopp allegedly supervised the enterprise and, together with Firtash, met Indian officials.

Rao allegedly solicited bribes for himself and others in return for approving licences for the project, and warned other defendants concerning the threat of a possible law enforcement investigation. The indictment lists 57 transfers of funds between various entities, some controlled by Group DF, totaling $10,597,050 between April 28, 2006 and July 13, 2010.

Demand for CBI probe

Telugu Desam president N Chandrababu Naidu has sought immediate intervention of the Central Vigilance Commissioner (CVC), the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) into the titanium mining scam, which has been unearthed by the US investigative agency, FBI, and requested them to institute a high-level probe into the entire issue to find out more details. Chandrababu Naidu referring to the charges said that the Ukrainian industrialist allegedly paid Rs 111 crore to YSR and KVP to secure mining licences in the name of an unnamed firm identified as “ Company A” , headquartered in Chicago, in the MoU signed between the state government and the company in 2006. The charge-sheet clearly mentioned that YSR and KVP threatened to cancel the MoU if they were not given shares in the mining, Naidu alleged and said that the role of YSR’s son Jaganmohan Reddy could not be ruled out.

Lok Satta Party national president Dr. Jayaprakash Narayan demanded that the CBI should act in close concert with the FBI to unearth the scam involving Indian politicians in grant of licences for titanium exploration. Dr Jayaprakash Narayan demanded speedy and efficient investigation into the case and stringent punishment for the guilty. The culprits should be removed from the public office and sentenced to rigorous jail terms. In addition, the government should confiscate all their properties, he demanded.

Former finance minister and senior TDP leader Yanamala Ramakrishnudu commented that with this case the glory of YS Rajasekhara Reddy regime’s corrupt practices had expanded to foreign countries. “This is a glaring example to show how Rajasekhara Reddy earned crores of rupees for his ‘atma’ and son,” he said.

YSRCP refutes allegations

Terming as baseless and mischievous the allegations levelled against party president YS Jagan Mohan Reddy, YSRCP has said N Chandrababu Naidu and his friendly media have been spinning stories as TDP is unable to take the election sprint on a level play field and resorting to unfair and mudslinging campaign though the verdict of the people has been clean and clear.

Meanwhile, sources said that though the agreement mentions that the AP Mineral Development Corporation would get licence from the Centre for mining of titanium ore from beach sand, no licensee has been granted to the joint venture company. “As the agreement with Bothli TradeTrade has not been annulled as yet, the company still exists,” one official said.

By Ch Narendra from Hyderabad