The government may have opened a can of worms for itself with its review petition in the 2G case, arguing that the Supreme Court judgment cancelling 122 telecom licenses “erred in holding that the policy [under which the licenses were issued] was contrary to the decision of the Council of Ministers on 31.10.2003, without pointing to what part of the said decision it was contrary to.”
The 2003 Cabinet decision required the Department of Telecom and Ministry of Finance to discuss and agree on spectrum pricing.
Contrary to the review petition's claim, the Supreme Court judgment specifically discusses that decision, stating: “The DoT did not get in touch with the Ministry of Finance to discuss and finalize the spectrum pricing formula.”
But the deeper pitfall for the government is that any discussion on this front runs the risk of highlighting the contradictory positions Prime Minister Manmohan Singh, Home Minister P Chidambaram —- who was the Finance Minister at the time the 2G scam took place — and the CBI have taken on the matter.
On November 11, 2010, in an affidavit relating to the CBI's supervision of the 2G scam investigation, the government, citing correspondence between the Finance and DoT secretaries of November 2007, claimed that both Ministries were in agreement.
Three months later, immediately after ex-Telecom Minister A. Raja's arrest, the Prime Minister, on February 16, 2011 at a TV Editors' conference, explained the circumstances in further detail.
“This was also discussed with the FinMin because in terms of the Cabinet decision of 2003 the pricing and allocation of spectrum was to be settled between the Ministry of Finance and the Telecom Department,” the Prime Minister said. “Initially, of course, the Finance Ministry did ask for a high price of spectrum but after many discussions, the two Ministries agreed that as far as 2G is concerned, we have to live with the present system particularly with regard to the amount of spectrum that is billed and embedded into a licence agreement. So this is the background why I did not proceed further in this matter of pricing of spectrum, because if the Ministry of Finance and the Ministry of Telecom both agreed and they have the obligation of the Cabinet decision of 2003 to decide on the matter … I did not feel I was in a position to insist that auctions must be insisted.”
On February 24, 2011, the Prime Minister broadly reiterated the same position in the Rajya Sabha: “The government policy on pricing of spectrum was taken on basis of the Cabinet decision of 2003, which specifically left the issue to be determined by the MoF and the Ministry of Telecommunications.” Elaborating on Mr. Chidambaram and Mr. Raja's role, he said: “The two ministers had agreed because of legacy considerations and I accepted the recommendation.”
Till March 2011, the government's position in the Supreme Court, to the media and in Parliament, was cohesive in its claim that consistent with the Cabinet decision of 2003, Mr. Chidambaram and Mr. Raja had agreed to keep the entry fee for pan-India 2G start up spectrum in 2008 at a 2001 price of Rs. 1,658 crore.
On 2 April, 2011, the CBI filed a charge sheet, accusing Mr. Raja of rejecting suggestions to revise the entry fee from several government sources, especially the Finance Ministry. In one stroke, the CBI overturned the position taken in the government's affidavit in the Supreme Court, the Finance Ministry OM, indeed by the Prime Minister, himself.
Soon after, a case was filed in court to make Mr Chidambaram a co-accused.
This fuelled the Opposition's boycott of Mr. Chidambaram in the 2011 winter session of Parliament. The government's counter was a complete reversal of its stand. A December 10, 2011 press release issued in the middle of the Parliament session, proclaimed: “It will be clear from the foregoing sequence of events that Shri P. Chidambaram was in no way responsible for the issue of LoIs on January 10, 2008 or charging the entry fee of about Rs. 1,650 crore.”
Going so far as to contradict the PM's statements, the press release asserted: “As Finance Minister, it was Mr. Chidambaram who raised the issue of the revision of entry fee. However, the final view taken by the DoT was that it would adopt the same policy that had been followed since 2003, including charging the same entry fee of about Rs. 1,650 crore. It is therefore preposterous to suggest that Shri Chidambaram had any role to play in ‘fixing' the entry fee for LoIs issued on January 10, 2008.”
These contradictions surfaced again two months later, on February 4, 2012, when CBI Special Judge O.P. Saini, while exonerating Chidambaram from charges of criminal conspiracy, concluded, consistent with the Prime Minister's position that, “he [Mr. Chidambaram] agreed with Raja not to revise or revisit the entry fee or spectrum charge as discovered in 2001”
Responding to a February 16, 2012 story on Judge Saini's order, Mr. Chidambaram wrote a letter to The Hindu in which he addressed the issue of his alleged agreement with Mr. Raja on the issue of entry fee. Taking a position contrary to Judge Saini, the DoT's affidavit in the Supreme Court and more specifically, the PM's two statements, Mr Chidambaram confirmed: “There was never any ‘agreement' between the Minister of C&IT (A. Raja) and me not to revise the entry fee.”
Far from putting these uneasy contradictions to rest, the government is now inviting further controversy by challenging the Supreme Court to explain which part of the Cabinet decision of 2003 was not complied with.