2G spectrum case verdict will create political tremors for DMK and Congress

The corruption scandal that led to the downfall of the second United Progressive Alliance government (2009-2014), and which made the office of the Comptroller and Auditor General of India a widely popular institution in the country, will be back in the limelight on Thursday, when a Central Bureau of Investigation court in Delhi delivers its verdict in the 2G spectrum case.

The scandal, which involves two separate cases filed by the CBI and the Enforcement Directorate, will decide the political fate of Rajya Sabha member Kanimozhi, the daughter of Dravida Munnetra Kazhagam leader M Karunanidhi, and former Union Telecom Minister A Raja. This apart, the Enforcement Directorate case, which involves charges of money laundering, also has as an accused Karunanidhi’s wife Dayalu Ammal and several others.

The verdict could not come at a worse time for the DMK, which is trying to make a big political comeback in Tamil Nadu following the death of former Chief Minister and AIADMK leader Jayalalithaa last year. The verdict will coincide with polling for the bye-elections in the Dr RK Nagar constituency, the seat that Jayalalithaa vacated.

Within the DMK, senior leaders feel that an adverse verdict will have a direct impact on polling and could make it hard for the party to win the by-poll, which some opinion polls have suggested is a triangular race between the DMK, the All India Anna Dravida Munnetra Kazhagam and TTV Dinakaran, the nephew of Jayalalithaa’s jailed aide Sasikala.

But the tremors of the verdict will not stop with the DMK. The Congress, which led the United Progressive Alliance government, will feel its aftershocks as a negative verdict will give the BJP a chance to open old wounds.

Big scandal

In 2008, the Union Ministry of Communications and Information Technology sold 122 2G licenses on a first-come-first-served basis. The primary allegation was that Raja, as the Union Telecom Minister, chose this method to favour a few companies and received kickbacks for doing so. The rates were also fixed at 2001 prices. When the scandal emerged in 2009, the Congress claimed that this old pricing was done despite concerns raised by both the Prime Minister’s Office and the Ministry of Finance.

Raja was also accused of advancing the cut-off date for applications, thereby aiding certain companies, some of which had no prior experience in the telecom sector, to bag the licenses. Some of the accused in the case include Sanjay Chandra, Managing Director, Unitech Ltd, Unitech Wireless (Tamil Nadu) Private Ltd and Shahid Balwa and Vinod Goenka of Swan Telecom Private Ltd. The Delhi High Court later ruled that the advancement of the cut-off date was illegal.

Likewise, the Enforcement Directorate claimed that kickbacks earned from the scam were routed to the DMK-run television channel Kalaignar TV, in which Dayalu Ammal and Kanimozhi held 80% of the stakes.

In 2010, the Comptroller and Auditor General of India released its report in the 2G spectrum allocation, which claimed that there was a loss of Rs 1,76,000 crores to the exchequer due to the faulty allocation process. The report set off a series of political events that culminated in the India Against Corruption movement led by Anna Hazare in 2011. Both Raja and Kanimozhi were arrested in 2011 but were later released on bail.

The 2G spectrum scandal, and scams in the allocation of coal mines, caused a serious credibility crisis for the Congress and the United Progressive Alliance.

Political fallout

The 2G scam is often cited as the reason that eventually led to the downfall of the Congress in 2014. The BJP used the scam to pin down the Manmohan Singh-led government as a corrupt administration with a weak prime minister who remained a spectator even as a valuable resource like 2G spectrum was used to gain massive kickbacks.

Following the BJP’s victory in the 2014 Lok Sabha elections, the scandal slowly dropped out of the limelight. However, its ability to cause a political storm remained as the CBI court continued the trial.

In Tamil Nadu, the timing of the verdict could not have come at a worse time for the DMK. Since Jayalalithaa’s death, the DMK has emerged stronger due to the lack of a potent opponent. The ruling AIADMK is going through a period of political crisis and has split into two factions.

The judgement will be delivered on Thursday, when polling for the Dr Radhakrishnan Nagar by-polls will be underway. R Manivannan, professor of politics at the University of Madras, said a negative verdict for the DMK could completely derail its chances in the by-poll. “We cannot but wonder about the curious coincidence in the dates,” he added.

Such a verdict will also provide ammunition for the ruling AIADMK, beleaguered as it by charges of corruption over the last 12 months.

Like the impact it had on the Congress at the Centre, the 2G scandal crippled the DMK in Tamil Nadu, leading to its drubbing in the 2011 Assembly polls, when it was relegated to third position in the state. Jayalalithaa effectively used the scam in the election campaign and sustained it later, often making a mention of the charges against Raja and Kanimozhi in her statements. The DMK was decimated in the 2014 Lok Sabha elections as well, failing to win a single seat.

The Congress is cautious. A former Union minister from Tamil Nadu said the party’s would continue to follow the stand it took in 2011. “No one from the Congress is an accused,” the leader said. “Manmohan Singh’s letter questioning the spectrum allocation in 2008 is in the public domain.”

Manivannan said that the verdict has the potential to break the Congress-DMK alliance as the Congress will deflect any criticism by claiming that it was the leaders of the DMK who were architects of the scandal. However, a positive verdict is likely to be lapped up by the Congress as a victory for its contention that no scandal took place in the allocation of 2G spectrum.