Volcker controversy

Published : Dec 30, 2005 00:00 IST

The complex nature of modern-day white-collar crimes makes it necessary for Judges and investigators to acquire multidisciplinary skills.

AS this column is written, the Centre has ruled out a Joint Parliamentary Committee (JPC) to probe the Volcker allegations. The National Democratic Alliance (NDA), however, seems determined to carry the fight on, having tasted blood in the form of Natwar Singh's resignation. Its target now is Congress president Sonia Gandhi, who is unlikely to oblige her detractors. The common man is amused that the two groups now engaged in what seems a characteristically fierce combat are intent on damning each other, rather than speaking up, at least for form's sake, on the need to maintain probity in public life. This is the tragedy of the current state of polity, something that definitely weakens our faith in the ability of the political parties to give us a corruption-free rule.

My focus is, however, on the related theme of how credible and effective a judicial inquiry is, when it looks into scams such as the one relating to oil-for-food deals. Also, how well equipped are our enforcement agencies in handling investigations of the kind? But first, how judicial commissions in such matters are looked upon by the public? Whatever be the eminence of the Judge appointed, there is undeniable scepticism about his objectivity when he happens to be a retired Judge. The point is a serving Judge is seldom made available by a Chief Justice because the volume of daily work is so large in the Supreme Court and the High Courts that the absence of a Judge doing a special inquiry like Volcker can adversely affect the pendency. (Hats off to Justice J.S. Verma who combined his inquiry into the Rajiv Gandhi assassination with his responsibilities in the Supreme Court without a fuss and much of a disruption of that Court's routine. I personally watched his performance with immense admiration.) This is why governments have to make do with former Judges who may not exactly be sparkling for their reflexes.

There is a popular perception, that when a retired Judge is appointed, he is rarely in a hurry to complete his assignment, because he has so many perquisites that he would like to hang on to, for as long as he can. Extension after extension is, therefore, the order of the day.

There is here an element of tendentiousness that the public perceive as an indirect attempt on the part of the establishment, either to delay the release of a report or to wrest conclusions that do not go against it. The questionable tactics cut across political affiliation. Almost all parties resort to the subterfuge of judicial inquiries to gag the press and the public to get over embarrassments from episodes such as the Volcker scandal. I would, however, like to believe that no Judge of real class would ever oblige a government in the dock by blatantly prolonging his inquiry. Not irrelevant here is the fact that when you choose a retired Judge, the Supreme Court or a High Court need not necessarily be consulted. Therefore, a government would invariably choose a Judge who in its view is `safe', although his conclusions after the inquiry may not always go in its favour. These are hard facts that cannot be wished away. This is why the credibility of judicial inquiries in our country is abysmally low. Politicians commit the graver mistake of believing that the public are appeased by actions like these. The aggrieved citizen or group is incensed by governments remitting allegations of a grave nature to a judicial inquiry, especially when the issue is misconduct of a public agency like the police or allegations of impropriety against a public servant like Natwar Singh. A quick and honest police investigation is sometimes preferable to a long-drawn-out judicial inquiry.

This leads us logically to the question: how well can our law enforcement agencies, such as the Central Bureau of Investigation (CBI) and the Enforcement Directorate (E.D.), rise to the occasion when called upon to investigate scams, either on their own or while assisting a Judge? Memories of the Hawala case come readily to my mind. Here, in the late 1990s, the Supreme Court admonished the CBI for not being objective while probing the role of those in authority and to whom the agency was immediately answerable. The court went as far as ordering the CBI chief to steer away from briefing government on the progress of investigation, but to report to the Court directly. This was a landmark order that gave flesh to the concept of court-monitored criminal investigations that has been expanding since then.

This phenomenon has certainly made the investigator understand that if he is slack or he suppresses a piece of information just to favour an accused or suspect, he will be hauled over the coals by the court. In sensational cases, this fear of being found out for bias or inadequacy has worked wonders. In the ultimate analysis, it is not very relevant as to who ordered the probe, the court or a government. What matters is the transparency that attends the effort to get to the bottom of an episode that has attracted public attention.

My further proposition is that these days, unlike in the past, in all such matters, investigating agencies and Judges conducting a public inquiry are under the public scanner much more than ever before. The media, both print and visual, have seen to it that nothing much of the happenings of the utmost public importance escapes its eagle eye. Active media ensures that few scams go unreported. Even where there is a whiff of a scandal, the media are already there to plumb the depths of an occurrence and ferret out the facts so as to place them before the public. This is the greatest advantage of our times. Notwithstanding the tendency of some newspapers and TV channels to distort facts, there is, by and large, a reasonably reliable account of a past event that gives inquiring bodies a fair idea of the correctness or otherwise of an allegation.

The Volcker report has definitely been the subject of enormous investigative reporting and publicity to facts coming out of it. The former Ambassador to Croatia, Matherani, has had an uncomfortable time facing the press. His conduct has been clownish, to put it mildly. After taking the stand that a journal that covered his so-called interview had betrayed him by reporting an off-the-record chat, he went as far as to say that he never gave such an interview. He could not sustain this position for long because the journal was quick to release the clear-as-crystal audio-cassette containing the conversation. Naturally, Matherani, who has already been quizzed by the E.D., would figure as a key witness in the Justice Pathak inquiry. The interview attributed to him will also be examined threadbare. This is why I say that neither the police nor an inquiry commission can ever complain of a lack of material to proceed with the matter on hand. The publicity that a scam receives from the media ensures that efforts by those who perpetrated the fraud will not be able to suppress fundamental facts. This inability to control leakage of information is another advantage for Judges and investigating agencies. There is a constant flow of information on any unseemly happening of public interest that facilitates the process of collection of facts by either a Judge or an investigating official.

Many current day scams have a strong international connotation, especially because most of the illegally earned money is laundered abroad before finding its way back into India. Tracing trails of how money flows out and re-emerges is a fascinating but painstaking exercise. There are many obstacles to getting at the truth, because many participants in the illegal operation live abroad. Also, the beneficiaries are extremely powerful, and some of them hold influential public office. They will do everything to protect themselves, including destruction of evidence and intimidation of witnesses and investigators who are close to unravelling the chain. Here again, money-laundering is not the monopoly of any single political party. This is the reason why investigating scams becomes a tough job, sometimes involving personal risks to those entrusted with the task of identifying the missing money and links. Cooperation is required from a wide spectrum of professionals such as bankers and chartered accountants. Not all investigating agencies and judges have the required expertise. I am sure the CBI, the E.D. and state police's economic crime wings are doing something about filling this gap. They cannot be smug merely because such expertise is always available in the market for a price. This is no doubt true. There is nothing like building an in-house corps of officers with a sound knowledge of company law, foreign exchange regulations, bookkeeping, the income tax law, and so on. Such skilled officers can assist and understand external consultants whenever the latter are requisitioned in a contingency.

Large-scale frauds like the fodder and Telgi scams involve collection of significant digital evidence. White collar criminals falsely believe that once they put down information regarding their transactions into hard drives and floppy drives, they can escape scrutiny. Equally strong is the impression that email correspondence is far safer than paper communication. As we know, this is again erroneous. Misdirected email can unwittingly land in wrong hands. Also, interception of emails has become so simple, both to authorised and unauthorised individuals, that an originator should give due allowance to the reasonable prospect of his mail being seen by those who are to be kept out of the chain. Modern investigators need to develop skills in lifting digital evidence and preserving it. Clumsiness and thoughtlessness in this area could lead to permanent loss of valuable information. I am not sure that Judges in the country who understand the intricacies of cyber space are very many. It is necessary that those who investigate scams or hear evidence relating to them, when taken to court, equip themselves with enough knowledge of how cyber evidence is collected and let in while presenting cases. There is no substitute for an investigator or a Judge acquiring this skill, instead of wholly depending on an expert witness. Such an expert has no doubt a defined role in placing the evidence in its correct perspective and assuring the Judge that it is reliable and not padded up to suit the convenience of the prosecution.

Ultimately, both investigators and Judges (either conducting trial or performing the role of an inquiry commission) need multidisciplinary skills. I would emphasise the importance of building specialisation, especially among law-enforcement agencies. Modern scams call for perseverance and knowledge of wide-ranging statutes that address economic issues. Familiarity with the fundamentals of modern technology is also no less important. The vital information that a simple cell phone or one with a camera and a tiny thumb drive can both carry is incredible. It is essential that a Judge or investigating officer understands how such gadgets work and how they can assist in arriving at their conclusions. While one may argue that this specialised knowledge is something every criminal investigation calls for, I believe it is more relevant to unearthing scams in our times and placing crucial facts before the Judge during an inquiry or a trial. Training is the key word here. Neglect of this area can hardly be condoned in our times when there are hundreds of institutions and individual experts who are ever ready to assist public officials working for the cause of detecting and punishing offenders who dip their hands into government coffers or plunder corporate wealth.

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