2014-01-10

Devyani Khobragade, the Indian

diplomat accused of visa fraud for allegedly underpaying her

babysitter, left the U.S. after she was indicted in a case that

roiled relations between the two countries.

Khobragade, 39, was charged yesterday with making

“multiple false representations” to U.S. authorities to obtain

a visa for the caretaker, and the State Department later ordered

her to leave the country after India denied waiving her

diplomatic immunity. Her flight has already left the U.S.,

according to an Indian government official who asked not to be

identified because he was not authorized to speak publicly.

Khobragade’s departure may resolve a diplomatic row that

threatened to jeopardize a growing economic relationship as

annual trade in goods and services between the countries nears

$100 billion. The dispute, which erupted after reports that she

was strip-searched, put a cloud over President Barack Obama’s

goal of strengthening U.S.-India ties.

“Even though the case is being resolved, it caused waves

that will take time to resolve and it has caused reputational

harm on both sides,” P.J. Crowley, a former State Department

spokesman, said in an e-mail. “Both sides need to make

conciliatory gestures in the aftermath,” he wrote. “Wounds do

heal, but as always, they leave a scar.”

India’s Ministry of External Affairs said today Khobragade

had been transferred to a post in New Delhi and that it had

declined a U.S. request to waive her diplomatic immunity.

Strip Search

Khobragade said the charges against her were false and

baseless, Press Trust of India reported today, citing comments

she gave before boarding the plane back to India.

“Treating a human being in such an inhumane way has been

an utter violation of human rights,” Uttam Khobragade, the

diplomat’s father and a former Indian bureaucrat, told reporters

in televised comments, referring to his daughter. “I’m very

grateful to the Indian government. They did everything that

could’ve been done.”

Khobragade, first charged Dec. 12, was accused of paying

her babysitter about $3.31 per hour, below the New York minimum

wage of $7.25 per hour. Her case triggered Indian outrage on

reports that she was arrested in front of her daughter’s school

in upper Manhattan and strip-searched while being held with

other female suspects. She was released on $250,000 bond, which

was unsecured.

‘Temporary Hiccup’

Manhattan U.S. Attorney Preet Bharara has said the strip-search was standard practice in an arrest. The incident sparked

an uproar in India as the nation of 1.2 billion people prepares

for elections in a few months.

“Ultimately, this will just be a temporary hiccup which

won’t prevent India and the U.S. from siding together on more

serious issues,” said Harinder Sekhon, who has written two

books on India-U.S. relations. “Both sides need to show more

maturity and end these tit-for-tat actions which will only

further complicate the relationship.”

The Indian government demonstrated its displeasure with a

variety of small reprisals, including removing some security

barriers at the U.S. Embassy in New Delhi, lifting traffic-violation exemptions for U.S. embassy cars, and ordering the

American Center, a venue in central New Delhi for U.S. cultural

programs, to halt its activities.

Trips Postponed

The U.S. countered by postponing anticipated visits to

India by Energy Secretary Ernest Moniz and Nisha Desai Biswal,

the U.S. assistant secretary of state responsible for India.

During a visit in November 2010, Obama called the

relationship with India “one of the defining and indispensable

partnerships of the 21st century.”

Indian Prime Minister Manmohan Singh, who was Obama’s first

official diplomatic guest in 2009, last week described a deal

with the U.S. that allowed it to import nuclear technology as

his greatest achievement during a decade in power. He told

reporters in New Delhi that diplomacy should be given a chance

to resolve the recent “hiccups” in relations.

Raymond Vickery, a top U.S. trade official under President

Bill Clinton and now a senior director at the Albright

Stonebridge Group in Washington, said that expanding trade and

investment has been “the underlying driver” in U.S.-India

relations.

Business Ties

Speaking before the late legal developments, Vickery said

business relations hadn’t yet been hurt by the dispute. The

bilateral trade in goods and services reached $92.5 billion in

2012 from $59.9 billion in 2009, the first year of the Obama

administration, according to a joint statement following U.S.-

India economic talks in October.

Indian foreign direct investment in the U.S. surged 23-fold

to about $5.2 billion in the 10 years through 2012, making India

one of the fastest growing sources of investment into the U.S.,

according to the statement.

At the hearing in Manhattan, Khobragade’s lawyer Daniel

Arshack said he told her not to board an Air India plane

yesterday afternoon because “there was at least a possibility

that it would be viewed as flight” from prosecution.

Arshack said his client had “diplomatic status” and told

U.S. District Judge Shira Scheindlin that she no longer had

jurisdiction over the case.

Bail Decision

“I was not willing to permit her to depart without

appearing before your honor,” Arshack said. He asked Scheindlin

to vacate his client’s bail.

Scheindlin later agreed that Khobragade wouldn’t be accused

of bail jumping if she agreed to the State Department’s request.

The judge deferred a decision on bail to a later date.

“We are pleased that the United States Department of State

did the right thing today by recognizing the diplomatic status

to which Dr. Khobragade has always been entitled,” Arshack said

in a statement issued last night. He accused the government of

committing a series of “blunders.”

The visa fraud charge against Khobragade carries a maximum

prison term of 10 years, while the false statements charge has a

maximum term of five years, according to prosecutors in

Bharara’s office.

In a contract Khobragade submitted as part of the visa

application, the diplomat said she paid the babysitter $9.75 an

hour, State Department Special Agent Mark Smith said in the

original criminal complaint. In a second contract, the diplomat

agreed to pay the babysitter 30,000 rupees a month, or $573, the

U.S. said, which came out to $3.31 an hour. New York minimum

wage is $7.25 per hour.

‘Exploitative’ Conditions

“Khobragade did not want to pay the victim the required

wages under U.S. law or provide the victim with other

protections against exploitative work conditions mandated by

U.S. law (and widely publicized to foreign diplomats and foreign

officials),” according to the indictment.

After her arrest, Khobragade was named by her country to

serve as a member of its permanent mission to the United

Nations, a position that gave her a higher level of diplomatic

immunity than she enjoyed as deputy consul general at India’s

consulate general in New York.

The U.S. accepted the request to accredit Khobragade to the

UN mission, according to a State Department news release.

Seeking to deny such a request would be almost without

precedent, except in matters of national security including

espionage, the department said.

The U.S. first asked for a waiver of diplomatic immunity,

which India subsequently denied, then requested that she return

to India, the department said.

The case is U.S. v. Khobragade, 14-cr-00008, U.S. District

Court, Southern District of New York (Manhattan).

To contact the reporters on this story:

Patricia Hurtado in Federal Court in Manhattan at

pathurtado@bloomberg.net;

Terry Atlas in Washington at

tatlas@bloomberg.net

To contact the editors responsible for this story:

Daniel Ten Kate at

dtenkate@bloomberg.net;

Michael Hytha at

mhytha@bloomberg.net;

John Walcott at

jwalcott9@bloomberg.net

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