How was Quattrocchi's account de-frozen?

CBI froze Ottavio Quattrocchi's account when the Interpol brought to its notice that the Italian had money in two accounts in the Swiss branch of BSI-AG. The total amount was around Rs 21 crore. The gravamen of the CBI plea was that these formed 'part of the proceeds of the crime relating to the case'. The CBI had given a noting of the special judge who said that he was satisfied with the prima facie evidence that showed that Quattrocchi had received $7.123 million as kickbacks in the Bofors deal. The Italian businessmen had protested at this freezing, but the London high court had upheld CBI's plea.

Quattrocchi's lawyers started putting pressure on the Crown Prosecution Service (CPS) after Delhi high court threw out the Bofors case and discharged the Hindujas on May 31, 2005. They claimed to the CPS that their case was linked with Hindujas who were charge-sheeted along with them in October 2000. Quattrocchi's counsel claimed that if Hindujas were discharged on the same evidence, why should the same benefit not to be extended to the other accused in the case? It was a compelling argument and the CPS wanted to know the position of the Indian government. Around this time, the CBI was dithering whether it should file a special leave petition in the supreme court against the high court discharge. At the behest of the then CBI director, US Misra, an opinion was sought from KP Pathak, law officer attached to the law ministry. Pathak suggested that 'in the absence of any authenticated documents in terms of the evidence act, I am of the opinion that proceeding against all accused persons such as the Hindujas, Bofors and Quattrocchi will be nothing but an abuse of the process of the court.' He also stated that there was no connection between the money and the crime and it cannot be sustained in the court.

Under pressure from Quattrocchi, the CPS asked whether the restraining order on the accounts should stay. At this juncture, the CBI sent a law officer, B Datta, to London. Initially, he was to be accompanied by another CBI official, but the expenditure department shot it down. Datta parroted the opinion of Pathak stating that the CBI had no evidence to link the money in his account to the Bofors kickbacks. The CBI also owned up to the CPS that Quattrocchi had managed to stave off extradition proceedings in Malaysia, where he was arrested for a short while. Subsequent court orders in India had made it difficult to nail the Italian businessman. On January 11, 2006, a TV channel exposed the manner in which Quattrocchi's account was de-frozen.  All hell broke loose. An impression was created that the prime minister, Manmohan Singh, was not kept in the loop about this decision. Media reports tried to show that the de-freezing had taken place at the behest of the law minister, HR Bharadwaj, without even the CBI knowing about it. This impression was strengthened by the remarks of Bharadwaj where he stated that 'It is wrong to keep someone's money frozen when there is no proof against him.' For three days, the opposition leaders and the media had a free run. Prime Minister Singh and his handlers portrayed that they had nothing to do with the decision and they did not want to dirty their hands by commenting on the unsavoury incident. The law minister, Bharadwaj, was reportedly told not to speak to the press. The CBI officials, through off the record briefing to mediapersons, disseminated suggestions that they were quite upset about how the de-freezing had taken place behind their backs. They also expressed their resolve to get Quattrocchi extradited from Italy. For those three days, before the CBI in an unprecedented manner cleared the confusion and detailed the procedure by which Datta went to London, there were all kinds of aspersions against the government floating about. CBI chief's decision to clarify its stand urged Prime Minister Singh, too, to state that there was no interference from the government in the case. Meanwhile a lawyer, Ajay Agarwal, filed public interest litigation (PIL) over the manner in which Quattrocchi's account had been unlocked. SC ordered the CBI to ensure that the money did not leave the bank. Though the CBI did send a message to the CPS, but by then it was too late. The money flew out of the nest on January 16, just before the SC ordered the re-freezing.

On January 23, the CBI told the supreme court the circumstances in which the account was de-frozen. The CBI through the emails exchanged with CPS tried to prove that the decision to de-freeze the accounts stemmed from a query from London. This was a tenuous suggestion that did not convince.

The Quattrocchi de-freezing would have not got this publicity if the CBI did not leak the way it did. Highly-placed sources allege that the entire itinerary of Datta's trip to London was leaked to a senior leader of the opposition, who allegedly passed it on to the news channel. Datta was shown on camera going to the CPS. Also, documents were released to a section of the media, which tried to prove that the law ministry did not take the CBI into confidence in helping Quattrocchi de-freeze his accounts. 'The manner in which the Quottrocchi affair acquired scandalous proportion clearly shows a divided government which was conniving with opposition leaders,' revealed a CBI source. The impending cabinet reshuffle contributed further in giving edge to the Quattrocchi affair.

Be that as it may, the delayed response of the government has hurt it immensely and it would be one of the issues that is likely to be raised during the budget session of parliament.