Rafale deal: CAG Rajiv Mehrishi’s BJP connection & ‘conflict of interests’

Comptroller and Auditor General of India (CAG) Rajiv Mehrishi— who submitted the report on Rafale deal to President Ram Nath Kovind on Monday—has been a trusted lieutenant of the former Vasundhara Raje’s government and a blue eyed boy of the ruling Bharatiya Janata Party (BJP).

Sixty-three-year-old, Mehrishi, a 1978-batch Indian Administrative Service (IAS) officer of Rajasthan cadre, was appointed CAG on August 31, 2017. He was handpicked by Prime Minister Narendra Modi a day after his retirement from the service as Union Home Secretary on August 30, 2017.

However, this hardly came as a surprise to anyone in the bureaucratic circles owing to his allegiance to the ruling party and the proximity that he enjoys with some BJP leaders. Incidentally, an elderly member of Mehrishi’s extended family, it is said, was a senior RSS functionary in Bharatpur, Rajasthan, and a close associate of BJP veteran Lal Krishan Advani during his RSS days.

Soon after Mehrishi held the post of Chief Secretary of Rajasthan in December 2013, observers point out, many of Mehrishi’s friends had light-heartedly started referring to him as “Deputy Chief Minister” in Vasundhara Raje’s government due to the unbridled powers that he reportedly enjoyed under her rule. He was an obvious choice for Raje as he had worked closely with her during her previous term from 2003 to 2008 as Principal Finance Secretary.

However, after the BJP lost 2008 state Assembly elections, Mehrishi returned to New Delhi on central deputation for a few months, working in the agriculture ministry and later, as secretary in the Ministry of Overseas Indian Affairs.

An article on Rediff.com, Why Modi chose Rajiv Mehrishi as the economic affairs secretary, in October 2014, implies that well before Modi government appointed him as Union Economic Affairs Secretary in 2014, Mehrishi in media interviews had become critical of the schemes launched under the Congress-led UPA government.

His wife Mira Mehrishi, who is also a retired bureaucrat, is also known as a powerful woman in Rajasthan. After she retired as an IAS officer in May 2013, she was immediately appointed a full-time member of the Chief Minister Vasundhara Raje’s advisory council and vice chairman of Amer Development and Management Authority. Around the same time, she took over as chairperson of corporate social responsibility committee of IFFCO-Tokio General Insurance. While heading its board of directors, she also became a member of audit, nomination and remuneration committee of the company.

In 2015, Mehrishi couple was accused of abusing their official position. The case involved a piece of land that Rajiv Mehrishi had bought for Rs 25 lakh in Amer block of Jaipur, which the couple later allegedly sold for Rs 5 crore, saving a tax worth Rs 1 crore, according to an India Today report.

Interestingly, Rajasthan government asked judge Justice SK Garg, to probe charges against him in September 2015 when he was Union Home Secretary following the allegations leveled against him by an RTI activist in a press conference. “I had requested for a judicial probe (into the matter) by a sitting judge of the high court,” Mehrishi was quoted as saying by IndiaToday.in.

The fate of the probe, however, remains unknown.

Ahead of the possible tabling of the CAG report on the Rafale deal in Parliament, Union Minister Arun Jaitley on February 10 had come out with a clarification after the Congress questioned Mehrishi’s role in the deal, maintaining that he was the Union Finance Secretary from October 29, 2014 to August 30, 2015. Jaitely claimed that defence ministry files are dealt with by Secretary (Expenditure) and the Secretary (Economic affairs) has no role in expenditure files of the Defence ministry.

But sources were quick to point out: “Even though he (Rajiv Mehrishi) was Secretary, Department of Economic Affairs (DEA), he still had the coordination role being the senior most (and hence being designated as Finance Secretary) in all four wings of the Finance Ministry.”

The €7.87-billion Rafale deal between India and France, sources added, involves foreign exchange dealings which are handled by the DEA as per the Allocation of Business Rules, 1961. “Since the Rafale agreement file having huge implication of foreign exchange, it must have gone to DEA,” they said, adding that “Normally, files relating to expenditures in a ministry go to the Financial Advisor who reports to Secretary Expenditure. That’s what Arun Jaitley is saying. But in this case, huge foreign exchange also is involved. Naturally, Mehrishi was dealing with foreign exchange matters when Rafale deal was signed .”

Recently, the Congress party in a memorandum to the CAG, had pointed out to Mehrishi that “You are constitutionally, legally and morally disentitled to either conduct an audit or to present a report before the Public Accounts Committee and the Parliament.”

The party had urged him to recuse himself and publicly accept the “gross impropriety” for initiating the audit of the 36 Rafale aircraft deal.

“Under the Defence Procurement Procedure and the Government of India (Transaction of Business) rules, Ministry of Finance and the then Cabinet Committee on Security are the appropriate authorities for financial sanction and approval of the defence deals,” the memorandum stated, adding that “At the time of unilateral announcement for purchase of 36 Rafale aircrafts at a cost of Rs. 58,000 crore by Prime Minister Modi, you were the Union Finance Secretary. Even at the time of cancellation of the 126 aircrafts MMRCA deal on June 24, 2015, you were the Finance Secretary.”

“Consequently, you were directly involved in the Rafale deal on both these occasions as Finance Secretary. Not only this, the price negotiations of the 36 Rafale aircraft deal commenced in May, 2015. Representatives of the Finance Ministry, i.e. Member of the Cost Accounts Service and Financial Advisers, were part of the Indian negotiation team,” it said, asserting that “no one can be a judge in his own cause.”

Constitutional scheme and the essential rule of law envisage, it remarked, that no individual can audit or examine or sit in judgement over one’s own actions.

Commenting on the CAG report on the controversial deal, Congress president Rahul Gandhi on Tuesday said: “CAG report is for the chowkidar and by the chowkidar. The gentleman who is making the CAG report is party to these decisions.”