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Dec 14 2010

Thank goodness we’re not a Banana Republic!

Telecom Scandal Plunges India Into Crisis

By JIM YARDLEY and HEATHER TIMMONS, The New York Times

Published: December 13, 2010

NEW DELHI – Tycoons with friends in high places. Public tenders conducted by irregular rules. Tens of billions of dollars in potential losses for the national treasury. Allegations of government ministers on the take, and of a respected prime minister too aloof to notice.

Those are some of the ingredients of a telecommunications scandal that is growing into India’s equivalent of Teapot Dome, an almost daily flurry of revelations about bribery, abuse of power, and privatization of public wealth that paralyzed Parliament for more than three weeks before its winter session ended Monday and have plunged the governing Congress Party into its worst political crisis in years.

The issue is how a minister allied with Congress sold cellphone operators the airwaves to provide their service to in 2008. But the amounts involved – an independent auditor estimated that the government may have left almost $40 billion on the table by selling the rights too cheaply – and subsequent revelations of how some of India’s richest men sought to exercise influence over political appointments and regulatory decisions has surprised a nation seemingly inured to reports of corruption in politics.

“Open corruption and rising stark disparities in wealth are a volatile mix that could affect social stability if the benefits of growth don’t filter down.”

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