Dow bribed Indian officials with cash, jewellery, hospitality

NEW DELHI - A senior central government official and his aides were bribed $32,000 in cash and jewellery while their travel and hotel expenses were also picked up by a subsidiary of Dow Chemicals, which took over the Union Carbide company after the 1984 Bhopal gas leak tragedy, to push its substandard pesticides in the Indian market, a case filed by the Central Bureau of Investigation (CBI) says.

The details of the bribes paid by Dow Agro Sciences India Ltd. Mumbai, which was earlier known as DE-Nocil, have been mentioned in the charge sheet filed by the CBI in the case, a senior official told IANS.

The charge sheet was filed on the basis of information furnished by the US authorities to the Indian government in response to a letter rogatory, a formal request from a court to a foreign court for judicial assistance.

“The legal action comes after the letter rogatory was executed by the US government on Nov 17, 2008 to elicit information regarding vouchers of Dow Chemicals to establish payment of bribes during 1996-2001 by Dow Agro Sciences,” CBI spokesperson Harsh Bhal told IANS.

Bhal said the CBI has filed charge sheets against Ratan Lal Rajak, a former plant protection advisor to the government, and a middleman, identified only as Satyabroto, in the court of a special judge in Ambala, Haryana for accepting bribes from Dow Agro.

The then managing director of Dow Agro, who is a British citizen, and two firms linked with Satyabroto, Agro Pack and Crop Health Products Ltd, are also mentioned in the charge sheet for corrupt deals.

According to the CBI charge sheet, Rajak was a member of all the three committees of the Faridabad-based Central Insecticides Board and Registration that granted permission for the sale of DE-Nocil products - Nurelle D, Pride and Drusban 10G - in India.

The Dow scam was unearthed by the US Securities and Exchange Commission (SEC) in 2007. It had also fined Dow Chemicals $325,000 for bribing the officials in India to fast-track permission to sell their pesticide brands that are banned in the US and many other countries.

The SEC, in a “cease and desist” order to Dow on February 13, 2007, charged the company with violations under the Foreign Corrupt Practices Act (FCPA) for letting a subsidiary use funds for illegal activities in a foreign country. The order was passed after Dow voluntarily approached Commission staff with the results of an internal investigation of DE-Nocil.

The order said “none of these payments were accurately reflected in Dow’s books and records”, adding that “Dow’s system of internal accounting controls failed to prevent the payments” in violation of the internal control provisions of the FCPA.

The SEC order had said Rajak alone had allegedly received the bulk of the bribes for registering Dow’s products. Bribes were also said to have been paid to state government regulatory authorities by the company for a license to distribute and sell its pesticides.

The SEC had simultaneously filed a complaint in the United States district court for the District of Columbia against Dow, alleging violations of the Securities Exchange Act. Dow then agreed to pay a civil penalty of $325,000 which the SEC accepted.

Besides Rajak and the then managing director of Dow Agro, who has been booked for “commission of offense of bribery, its abatement, criminal misconduct, falsification of accounts and criminal conspiracy”, the CBI has also registered cases against three others, named only as Ramakrishnan, P. Natarajan and Banerjee, who were consultants with DE-Nocil and who had allegedly delivered the bribes, officials told IANS.

Meanwhile, Communist Party of India-Marxist politburo member Brinda Karat has asked Agriculture Minister Sharad Pawar to reveal the latest details about the inquiry into the Dow scam.

She said that the government had not come with out details despite Pawar’s assurance in Rajya Sabha in 2007 that an inquiry will be conductd into the scam.

(George Joseph can be contacted at george.j@ians.in)