How India’s Defence Secrets Were Traded For Whisky

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During the 1970s and 1980s, India's top defence secrets were traded for bottles of Black Label whisky.

One of the most extraordinary and longest-running cases of espionage carried out for financial gain occurred in India in the 1970s and 1980s and was originally based on industrial espionage. Coomar Narain, the Delhi representative of a Mumbai-based engineering and trading company SLM Maneklal, began modestly, using bottles of Johnny Walker Black Label whisky and small-scale payments to persuade government officials to tip him off to opportunities for the company to expand its business.

Having been a senior civil servant in the Commerce Ministry, Narain had built up a network of friends and contacts across the Indian Civil Service and set about exploiting it to obtain favourable business opportunities for his boss Yogesh Maneklal, the owner of the company. At the end of their working day, civil servants would drop into the company’s Delhi offices in Hailey Road, a tree-lined street in the upmarket embassy area of the Indian capital, where Narain would ply them with glasses of Black Label in exchange for information.

Narain had no plans for his corruption of Indian officialdom to evolve into anything more substantial, but with hindsight it always had the makings of a perfect long-term intelligence operation, starting modestly, with tit-bits of information passed between friends, and gradually growing into a widespread net of informers who seemed to have such trust in Narain that they happily handed him classified government briefing papers. While they gossiped and sipped whisky with their emollient host, one of his lackeys would take the documents round the block to the local ‘Quick Photostat’ shop, have a copy printed off and bring it back to their boss who would return the original to the civil servant and send them on their way, usually with a surprisingly small pay-off, a bottle of Black Label, a 100-rupees (less than £10) or even on occasion just 50 rupees. Sometimes, the document was sent on ahead of time, delivered by a young Civil Service office boy on a bicycle, so that it could be returned without any interruption to the conversation between Narain and his contact.

It was not until the late 1970s, as SLM Maneklal’s business expanded into the Soviet Union and other Eastern Bloc countries that the immense potential of Narain’s ability to persuade his former colleagues to hand over secret government documents came to the attention of people with wider interests, in the shape of the KGB. In exchange for favourable status for the company’s business operations across the Eastern Bloc, Narain began expanding his network, to take in senior civil servants inside the Ministry of Defence and even the offices of the Prime Minister and the President. He also stopped using the local ‘Quick Photostat’ and acquired his own photocopier.

Using a complex series of cut-outs, designed to continue the appearance of industrial rather than state espionage, Narain sold copies of literally hundreds of secret and top secret Indian government documents at £100 piece to a Commerce Ministry civil servant who then sold them on to two Indian businessmen operating in Eastern Europe. It was these businessmen who passed the documents on to Jan Haberka, the Delhi station chief of the Polish intelligence service Służba Bezpieczeństwa, his HVA counterpart Otto Wicker, and most importantly of all Gennadiy Afanasyevich Vaumin, the KGB Rezident in the Indian capital. The two Indian businessmen were rewarded for their role with lucrative contracts for their companies across the Eastern Bloc.

The documents included top secret papers on India’s atomic energy programme, military satellites, government electronics systems and the country’s defence planning – including potential purchases of military aircraft, warships and weaponry. They also included top secret government policy papers and reports from the foreign intelligence service, the Research and Analysis Wing (RAW) and the internal security service, the Intelligence Bureau (IB) on key issues relating to foreign policy, including relations with China and Pakistan, and on sensitive internal issues dealing with India’s ethnic divides. Just in case anything was missing, Narain’s contacts provided copies of high-level Indian ciphers allowing the KGB to decipher Indian military and diplomatic communications.

By the early 1980s, it was not just the Eastern Bloc intelligence services that had discovered Narain’s network of spies across the Indian civil service. SLM Maneklal’s significant business interests in France led to officials at the French embassy being brought onto Narain’s client list. The vastly expanded scale and financial implications – at the time France was vying for Indian defence contracts worth a total of £4bn – resulted in Narain and his more important government sources receiving substantial sums of money paid into numbered Swiss bank accounts. Narain also held ‘lavish parties’ where, along with unlimited supplies of his trademark Black Label whisky, he laid on expensive call-girls, ensuring that all those involved were kept happy no matter how small their role. The woman who provided the prostitutes described Narain as ‘one of my best customers’. He always paid promptly and ‘courteously’ provided her employees with transport home, she said, denying any knowledge of a spy ring. ‘I thought that he was engaging the girls to help get contracts awarded to his company.’

In the wake of the Indian intervention in the Pakistan civil war, which led to the creation of Bangladesh, Indian Prime Minister Indira Gandhi had moved her country closer to the Soviet Union. This may have persuaded some within government to take an ambivalent attitude towards the KGB role in the Narain espionage operation, but the involvement of the French, who were vying for Indian defence contracts worth around £4bn, and the realisation that some of their own documents had leaked led the IB to intervene. Mrs Gandhi was told of the investigation in September 1984. The following month she was assassinated by two of her Sikh bodyguards in response to the Indian Army’s storming of Amritsar’s Golden Temple four months earlier. Her son Rajiv took over as Prime Minister but by the time he was told of the investigation he had called elections for late December and ordered the IB to wait until after the elections before taking action.

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Pookat Gopalan left the Prime Minister’s office after work on Wednesday the 16th of January 1985 and headed down to the office of SLM Manaklal. Gopalan was the senior personal assistant to P.C. Alexander, the Prime Minister’s Principal Secretary. He took three secret government documents to Narain’s offices to be copied. Gopalan and Narain were sipping whisky and chatting when the police burst in, arresting them both and sealing off the building. The IB investigators found the three secret documents in Gopalan’s briefcase but it was only as they started removing documents that the full scale of the operation became clear. The Press Trust of India reported that investigators seized ‘trunkloads of confidential documents’ including ‘a photocopy of almost all the important files in the Prime Minister’s and Defence Ministry secretariats.’ At the same time, a number of other senior civil servants, including three more members of the Prime Minister’s office, led by the deputy head of the unit, T N Kher, were being arrested at their offices or homes.

Next day, Rajiv Gandhi stood up in parliament to announce the uncovering of a plot involving the sale of government secrets to a number of foreign countries. As head of the Prime Minister’s office, Alexander was forced to resign immediately, although he denied any knowledge of the spy ring and was never charged. Gandhi did not name any of the foreign countries involved, but the Indian media was clearly being pointed in the direction of France, with Poland and East Germany being painted as minor players and the KGB getting no mention at all. On the Saturday after the initial arrests, IB officers arrived at the home of the French Deputy Military Attaché Lt-Col Alain Bolley and ordered him to pack and leave immediately. He and his family were escorted to the airport and left on that evening’s Air France flight to Paris. Meanwhile, the French ambassador Serge Boidevaix was told that he was also no longer welcome and although the Indian authorities would not openly expel him, he should make plans to leave within a month. Jan Haberka, the Delhi representative of Służba Bezpieczeństwa, the Polish intelligence service, and his HVA counterpart Otto Wicker were also expelled, but without the fanfare given to the French departures and, amid rumours that a KGB officer had also been forced to leave, investigators said there was considerable pressure from Moscow to suppress details of the Eastern Bloc involvement. It only later emerged that in 1984 and 1985, at the request of the KGB, the Soviet Communist Party made payments in US Dollars to ‘the family of Rajiv Gandhi’. They were included in an audit of the party’s accounts for December 1984 and authorised again in December 1985. The Russian government confirmed the payments in 1992, describing them as justified in the ‘Soviet ideological interest’.

Meanwhile, Narain was clearly enjoying being thrust into the limelight as the ‘kingpin’ of the spy scandal, dismissing pleas from his wife to deny the allegations. Geeta Narain complained that a man who was ‘afraid even of a lizard’ was scarcely a neat fit for James Bond, but to no avail. Her husband insisted ‘I just want to get rid of it all’ and was said by the IB investigators to be ‘singing like a canary’ about his network of thirty top civil servants and the million dollars he personally had made from his ‘supermarket of secrets’. Although he was quick to point out that this was nowhere near as much as his boss Yogesh Manaklal and the two businessmen dealing with the Poles, East Germans and the KGB had made from the multi-million dollar deals they obtained across Eastern Europe and the Soviet Union in return for the documents.

A five-month investigation led to eighteen people being charged with conspiracy to pass secrets to foreign countries and a lengthy court process with the trial being held in camera. It was not until July 2002, more than 17 years after the first arrests, that the hearings finally came to an end. The judge gave Yogesh Manaklal the longest sentence, 14 years ‘rigorous imprisonment’ for having ‘cajoled and inspired’ Narain into ‘nefarious activities for the sole object of winning favours from his foreign collaborators.’ Twelve former senior civil servants, including four from the Prime Minister’s office and another four from the Ministry of Defence, were jailed for ten years. Coomar Narain escaped imprisonment, having died of natural causes in March 2000.

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The above article, dealing with one of the longest intelligence leaks in Indian history, is from the book, “The Anatomy of a Traitor: A History of Espionage and Betrayal,” which investigates the backgrounds and motivation of spies, traitors and double agents.

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