India’s Most Shocking Smuggling Racket
The arrest of Uzbek smuggler Olga Kozireva 12 years ago brought to
light one of the most brazen illicit operations this country has ever
seen. But those likely to get away are the government officials who were
bribed with money and sex to look the other way
Scandal
AN
OPERATION ALL TOO BRAZEN Olga Kozireva (above) made 68 trips to India
between January and August 2000. The frequency of her visits alone
should have aroused suspicion
On 28 August 2000, Olga Kozireva, an Uzbek, arrived at Delhi’s
Indira Gandhi International Airport from Bishkek by Kyrgyzstan Airlines
flight No K2-545. As is the case even today, the arrival of a woman
from a former Soviet republic was not a rarity, but even so, Olga stood
out. She was 26, fluent in Russian with a little English to get by,
and she had a diploma in medicine from the Red Cross Society in
Tashkent. Her grainy passport photograph suggested a look that was to
become famous a decade later with the release of
The Girl with the Dragon Tattoo.
And her effrontery at the airport actually seemed to belong in
fiction. She had the temerity to walk through the green channel with 27
bags weighing a total of 2,200 kg registered on her air ticket.
Only a fool could have believed she would make it through, but Olga
was no fool. In that year alone, between January and August, she had
travelled to India 68 times, often with even bigger consignments. But
something finally went wrong that day. After four years of letting Olga
and several other Uzbek women walk past with little or no scrutiny, a
Customs officer decided to act.
THE SMUGGLING RACKET
The tale that unravelled in the ensuing investigation would be
unbelievable if it were not true. Since 1997, Olga and her accomplices
had been brazenly walking through the airport’s green channel—for those
with nothing to declare—with tonnes of baggage. The day she was
caught, the consignment had Chinese silk being flown in from
Uzbekistan, a prohibited item that had done great damage to India’s
domestic industry. In 2000 alone, there were 23 instances of similar
consignments of Chinese silk being cleared with only nominal penalties.
Officials on duty, it seemed, had deliberately noted only small
quantities of Chinese silk in their records, charged minor penalties
and let huge consignments into the country.
This, though, was less astounding than the fact that of the 84 trips
she made just through IGI Airport in Delhi since 1997, Customs
officials on 42 occasions did not even log a description of the goods
she was carrying. On 35 occasions, her flight number was not recorded.
During this time that she was flying into India from Pakistan,
Uzbekistan and Kyrgyzstan, no one has any idea what she had brought in,
apart from Chinese silk. At least one news report at the time states
that in October 1999 and June 2000, her accomplices brought in
bullet-proof jackets. It’s safe to assume these were not meant for
Indian security forces, so the implications of this are disturbing.
While recent news reports do not highlight the financial scale of
the racket, a simple calculation based on the Customs probe suggests
that the amount involved was large. One of the officials involved
revealed to Customs investigators that apart from the Uzbek women
provided to them for sex, a bribe of roughly $500 was paid on every
bag brought in.
On the day she was caught, Olga had 27 bags, and an estimated Rs 5
lakh had been arranged as a bribe to evade Customs duty of around Rs 50
lakh. Taking into account the number of times Olga had visited India
since 1997, this roughly adds up to Rs 5 crore in bribes to ensure duty
evasion of Rs 50 crore. Considering the fact that she was one among
several Uzbek women making similar trips, the racket has meant Customs
losses of hundreds of crore in a period when the rupee was worth much
more.
THE MODUS OPERANDI
The racket seems to have begun on a modest scale in 1997 when some
Indian Group B officers of the rank of superintendent and inspector
were first approached. As Olga and her accomplices grew confident of
getting material past Customs, the scale of their operation increased
to the point that by 2000, Olga herself was walking in through
immigration and Customs at IGI airport once every two or three days.
The frequency of her visits alone should have triggered an alarm among
security officials at immigration, but their failure to act has never
been examined.
According to Olga, the man behind the scandal was an Afghan named
Mamoor Khan who had left India shortly before her arrest. The
arrangement with the officers was simple: even before the consignment
was loaded—in Pakistan, Uzbekistan or Kyrgyzstan—the staff on duty at
IGI were contacted, and they in turn would indicate which shift would
be appropriate for getting the contraband through.
The network was vast and included staff at some airports where the
material was loaded. The investigation found that ‘the staff of
[Kyrgyzstan Airlines] at Bishkek and other places were hand in glove
with offender passengers to suppress weight of excess baggage carried
by them without recording the actual weight of the goods [in lieu] of
illegal gratification from the offending passengers.’ The airline,
which was later fined, informed DRI officials that, ‘this matter has
been investigated and [the] services of staff responsible including
that of Mr Dusheev, Head of Manas Airport, [have] been suspended.’
In Delhi, as the flight would be about to arrive, traders from
Chandni Chowk—a locality in old Delhi—would already have turned up at
the airport with delivery trucks to pick up the consignment. They would
pay the officials the pre-arranged bribe, and wait for the flight to
land. The payment ranged from $400 to $700 a bag, depending on its
size. One of the officials later admitted having received sexual
favours, too, from Uzbek women.
The contraband, usually transported in large sacks, would then be
taken out and loaded on the waiting vehicles. None of this could have
been possible without the involvement of the senior staff at Customs
clearance. The material was not hidden from anyone’s view, nor could it
be hauled off surreptitiously. Moreover, in several cases, a nominal
weight had been recorded for a much larger consignment, an assessment
that could only have been made by the shift in-charge, usually a Group A
official of the rank of deputy commissioner or above.
Olga’s arrest had thus exposed an airport smuggling racket
unprecedented in its scope and gumption. The financial losses, while
large, were not as significant as the possible threat to national
security. Under the circumstances, it was to be expected that
investigations would commence speedily, and end in action against the
officials involved. But if the scandal was astounding in itself, what
has followed since is even more incredible.
THE CUSTOMS INVESTIGATION
Two different kinds of offences were involved: one related to the
criminal conduct of the officials involved, a case that was handed over
to the CBI, and another related to smuggling that dealt with Customs
and was investigated by the Department of Revenue Intelligence (DRI).
The problem became clear at the very beginning. The DRI at the time
was headed by MK Zutshi, whose wife Vijaya Zutshi was commissioner at
the airport till mid-
2000. Moreover, DD Ingty, then additional director of the DRI, had
been additional commissioner at the airport from 1997 to 1999. This may
in some measure explain why the DRI took the otherwise inexplicable
decision to restrict its investigation only to the year 2000.
When the case finally did come up before the Customs, Excise and
Service Tax Appellate Tribunal (CESTAT), this tribunal began its
conclusions and findings by stating, ‘It is shocking to read para 557
of impugned order. Learned Adjudicating Authority noticed that Ms Olga
K admitted in her statement that she along with her associates was
coming to India right from the year 1997. But show cause notice was
issued to different persons to deal with the illegal clearances made
mainly [during] the year 2000, even though extended portion was
invokable (sic) for a period of 5 years…’
Given this background, it wasn’t surprising that no Group A
officers—that is, officers of the rank of deputy commissioner who
supervise shifts and their seniors—serving at the airport were part of
the probe.
They were not the only ones kept out; the appellate tribunal in its
judgment noted that ‘RN Zutshi (an inspector not related to the then
DRI chief whose confession formed the initial basis for the
investigation) has deposed unequivocally that 60 per cent of the bribe
money used to go to the Preventive Department of the Airport which
also manned the exit gates of the Airport. Superfluous investigations
were conducted and blame was put entirely on the officers involved in
baggage clearance keeping the Preventive Wing completely out of the
scope of investigation, making sketchy, superficial, deliberately
flawed and incomplete adjudication proposals.’
The appellate tribunal judgment, pronounced in 2011, was the result
of an appeal filed against the decision of the airports commissioner
who had, based on these ‘sketchy’ DRI investigations, decided to fine
seven Customs officials of the rank of superintendent and below. The
cumulative fines ranged roughly from Rs 2 lakh to Rs 15 lakh.
Further, the appellate tribunal imposed a fine of Rs 1 lakh each on
14 other Custom officials who had been spared by the commissioner.
These officials filed an appeal to the High Court, which sent the
matter back to the appellate authority because the case against each
had not been dealt with individually but been clubbed together. The
matter has since been pending with the tribunal despite a High Court
order demanding an early hearing.
This is because the case has been repeatedly listed before a bench
that did not pass the original order, even though the original bench of
DN Panda and Rakesh Kumar continues to sit and hear other matters on a
regular basis. The Revenue Department, which operates under the Union
Finance Ministry, has direct control over the appellate tribunal, but
it has failed to take any action in this case so far. Given the
Ministry’s record in the context of the CBI investigation, this does
not seem surprising.
THE CBI INVESTIGATION
The case was taken over by the Central Bureau of Investigation (CBI)
in March 2001. This agency asked the Finance Ministry for its sanction
to prosecute nine group A officers and 35 Group B and C officers
through the Director General (Vigilance). The Ministry finally granted
this sanction in March 2006, but only against 27 officers and just
five of the nine Group A officers.
The five Group A officers are VK Singh Kushwaha, then additional
commissioner at the airport, apart from HR Bhima Shankar, Rajiv Gupta,
Virender Kumar Choudhary and Upendra Gupta, who were all deputy
commissioners. These officers continue to serve in senior positions in
the department even as the trial goes on.
After the framing of charges, the actual trial began only in 2011, long after the case had faded from public memory.
In a startling development since, reported in
The Financial Express,
Finance Secretary RS Gujral has written to CBI Director AP Singh
earlier this year asking the agency to apply to the judge for a
closure of the case against the five officers.
While the CBI has clarified that it will not be dropping the case,
the existence of this letter—obtained by the paper through a Right to
Information (RTI) application—has not been denied by the Ministry.
According to the newspaper’s report, the letter states that the
cases were referred to the attorney general, who, after examining the
charges and departmental enquiries, has recommended the withdrawal: ‘It
has been decided by the competent authority that the case [before the
special judge, Tis Hazari] is fit for withdrawal of prosecution.’
Open received no response from the finance secretary at the
Ministry on why it has had this change of mind when the facts have not
changed since its sanction for prosecution was first granted. Clearly,
if the case against the five officers falls through, the others also
get away.
As for those against whom a sanction-to-prosecute was denied by the
Ministry in the first place, departmental inquiries were initiated.
These have since been closed. Deepak Garg, Deputy Commissioner
(Preventive), head of the same preventive wing that came in for so much
flak from the appellate authority, is now a member of the DRI and is
among the select few tipped to join the Tax Research Unit in the
Revenue Department, the body responsible for framing the Union Budget.
SECOND LIFE
It would be interesting to examine this case afresh in light of the
debate over the Lokpal Bill. The extent of corruption in this case is
evident, embracing almost the entire Customs staff serving at IGI
Airport for a period of five years. The fact that smuggling took place,
bribes were paid and there was a grave threat to national security is
not in doubt. But as far as the Government is concerned, no official
seems to be guilty.
Olga Kozireva served a two-year sentence before she was granted
bail, which she jumped and has since made her way back to Uzbekistan.
Only one inspector of the department, the one who admitted to
sleeping with Uzbek women, was dismissed from service.
Every aspect highlighted in the debate over corruption in this
country over the past two years has played a role in this particular
case.
The Government has used its discretion on granting sanction-to-
prosecute to let off several officers, and is now attempting to do
likewise even in case of those against whom sanction was first
granted. This delay has resulted in the trial proceeding at a far
slower pace than it should, and as public memory fades, the
overburdened CBI seems to have other things on its mind.
As for the DRI investigation, it reveals the hollowness of any
mechanism to check corruption that exists within the framework of a
department. The very people responsible for overseeing work at the
airport, it turns out, were directly or indirectly associated with the
investigation.
The failure of the department, as opposed to the CBI, to act against
any Group A officer reveals how cronyism within services such as the
IAS, IPS and IRS has reached an extent where senior officers go out of
their way to protect their own, whatever their crime.
Even while no senior officer has been called to account, fines have
been levied against 21 Group B and C officials by the appellate
tribunal—the only judgment that has been passed so far in this
12-year-old case.
The tribunal could not act against senior officials because they
were not arraigned in the case, so it seems we have a situation where
those in charge of duty shifts at IGI Airport bear no responsibility
for what happened in the periods under their watch, nor are they called
to account for misrepresenting the sizes of consignments, which
cannot be done by their juniors.
Juniors have been fined, but they have been absolved of any
wrongdoing in departmental proceedings. Clearly, abetting smuggling
does not seem to be ‘conduct unbecoming of a government servant’ in
India.
