Italian businessman victim of India politics-lawyer

BUENOS AIRES, Mar 1 (Reuters) An Italian businessman who could face extradition from Argentina over an arms-bribery scandal that shook India in the 1980s is being persecuted on political grounds, his defence lawyer said.

Italian national Ottavio Quattrocchi, 68, was detained in northern Argentina on February 6 under a 1997 Interpol warrant. A court released him on bail last week, but barred him from leaving Argentina pending an extradition request from India.

Indian investigators say Quattrocchi took 7 million dollars in bribes as a middleman in the 1.2 billion dollars purchase of artillery from Swedish arms maker Bofors AB in 1986 for the Indian army.

Quattrocchi was a friend of Sonia Gandhi. The president India's ruling Congress Party.

The arms scandal seriously dented the reputation of her late husband, then-Prime Minister Rajiv Gandhi, and contributed to his government's defeat in elections in 1989.

Quattrocchi has denied any wrongdoing in the Bofors scandal and his lawyer in Argentina, Alejandro Freeland, said his client is the victim of political games.

''When people want to hurt Mrs Gandhi, well, the Quattrocchi case is a good way to do it,'' he told Reuters.

An Indian court exonerated Rajiv Gandhi of wrongdoing in the matter in 2004, 13 years after he was assassinated by a suspected Sri Lankan Tamil Tiger suicide bomber.

And in 2005, other businessmen accused of involvement in the supposed kickback scheme were acquitted.

''In both cases, the high court of New Delhi said there was no evidence at all of this bribery, of this forgery, of this cheating that the CBI had been looking for for many, many years,'' Freeland said, referring to India's Central Bureau of Investigation.

''We don't understand why or how an arrest order issued in 1997 is still alive if two times, in 2004 and 2005, high courts in India have said that event didn't exist,'' he said.

Opposition legislators have accused India's Congress Party-led ruling coalition of hiding news of Quattrocchi's detention to allow the one-month deadline for seeking his extradition to pass.

Freeland said his client had traveled the world without any problem since previous extradition attempts were rejected by Malaysia's Supreme Court but that he has always cooperated with authorities.

''He has never been a fugitive ... he has never run away from anything,'' he said.

Quattrocchi was sightseeing in Argentina with his wife and was arrested on his way to Buenos Aires after a visit to the majestic Iguazu waterfalls.

India's CBI is sending a two-member team to Buenos Aires today and plans to present a formal extradition request.

CBI sources said Argentine authorities will take at least 15 days to process the case.

If a lower court rules in favor of extradition, Quattrocchi could appeal directly to Argentina's Supreme Court.

REUTERS DH RN0525