Stocks of scandal

In the wake of the Tehelka tapes, the scandal that has enveloped the revenue apparatus and the supervisory authorities for the stock markets, add to the government's worries.

THERE is no surer antidote for public apathy than the recurring shock of revelation. Within the space of just over a fortnight, the country seemed to have overcome the initial outrage caused by the Tehelka tapes and to begin looking at the sordid revelations of high-level malfeasance in defence procurement with something approaching absent-minded tolerance.

Two events, though, interrupted this descent into indifference. First, the stock markets crumbled under the accumulated weight of multiple transactions underwritten by fictitious money, jolting the investing public alive to the realities of supervisory laxity and connivance (see separate feature). Second, the arrest of B.P. Verma, Chairman of the Central Board of Excise and Customs (CBEC) - an agency that provides the Central government with half the revenue to keep itself running - showed how the system has for years been rewarding the corrupt with promotion and career advancement.

Any adventurer with a sufficiently fat purse can enter the portals of the country's most highly secured establishment, work his or her way right to the top and gain sufficient purchase for merchandise of a dubious - not to mention completely fictitious - character. That was the singular message to emerge from the sensational Tehelka tapes, aired to riveted audiences in March. The month following has brought revelations of more specific and equally shocking import. The value of assets owned by Verma, it is now revealed, is in the range of Rs. 40 crores. He was on a vigilance watch-list for some years but did not miss his opportunities to rise in the hierarchy of the Indian Revenue Service. More than the corruption of the individual, the key question raised by his arrest and indictment is: who put him in a position where he is able to control a workforce of 80,000 that manages the vital check-points of the Central government's revenue streams?

Verma was appointed CBEC Chairman in June last year after having served for over three years as a Member of the Board. Even in the latter position, he held successive charge of the two vital portfolios of Excise and Budget. In a tight race with another incumbent member for the top job, Verma obtained the endorsement of the Prime Minister's Office (PMO). Finance Minister Yashwant Sinha, for reasons that may not be quite unconnected to community and regional affiliation, seemingly preferred Verma's rival for the job. But when told where the PMO's preferences lay, he quickly acquiesced in Verma's appointment. The community factor supposedly worked partially in Verma's favour too, as did the backing of a top bureaucrat. His elevation was finally cleared by the Appointments Committee of Cabinet, which includes the Home Minister in addition to the Prime Minister.

All the individuals who helped Verma climb the ladder to the top of his service are today keen to dissociate themselves from his record of corruption. But in the days to come, certain hard questions will have to be faced and answered.

CHIEF Vigilance Commissioner Nagarajan Vittal made bold, after Verma's arrest, to go public with the claim that he had indeed opposed his appointment and recommended vigilance inquiries against him at various junctures. But this manner of retrospective wisdom does little to allay public misgivings about the CVC's curious reluctance to exercise the powers of superintendence that are granted him. Vittal did make another kind of public intervention though of a somewhat less valuable kind. Citing figures of the vigilance inquiries he had launched, he pointed out that Customs personnel featured most often on his watch-list, and so on. His rather broad generalisation invited upon Vittal the ire of the Indian Revenue Services Officers' Association, which threatened legal action.

The CVC also found himself in the focus of public attention for another reason. A fortnight after the disclosures of the Tehelka tapes, he submitted his final report in exercise of a mandate entrusted him in February last year. The brief he was given was rather limited - to examine whether the proscription of middlemen in defence purchases was, knowingly or otherwise, being flouted. When this question was referred to the CVC by the government during George Fernandes' tenure in the Defence Ministry, it was not clear what the basic intent was. Was Fernandes really in need of education on the extent to which defence purchases were influenced by brokers and middlemen? Was he interested in a fair and impartial inquiry in the interests of the public's right to know? Or was he merely seeking to initiate an open-ended political controversy that would rage indefinitely and threaten several political reputations?

Whatever these motivations, Vittal's plodding effort to arrive at the factual position through a minute scrutiny of the Defence Ministry files was rapidly overtaken by the drama and sheer audacity of the Tehelka revelations. Although a preliminary report by the CVC has been with the government for the last six months, there has been little indication of when the contents would be made available to the public. Nor has there been any sense of urgency on the part of the CVC to bring the results of his inquiry into the public realm.

The Tehelka revelations compelled the CVC to delay the submission of his final report by just over a fortnight. Although he had hoped to obtain first-hand testimony from the two reporters who had carried out the Tehelka sting operation, Vittal had ultimately to rely on a secondary study of the transcript of the tape that was broadcast over satellite TV late in March. Shortly after submitting his final report, Vittal made another of his rare public disclosures. The Tehelka tapes, he said, had "vindicated" all the points that he had made in his interim report submitted last year. But if all that the CVC has done is to document the presence of middlemen in defence purchases, then his accomplishments must be deemed to be rather modest. It is not clear that he has really estimated how much the cost of sustaining these brokers has been to the public exchequer. Nor is it clear whether he has suggested any remedial or punitive measures.

For its part, the government continued on its path of responding to the Tehelka tapes with a furious search of motives and sponsors. Thomas Mathew, a Director in the Ministry of Home Affairs, was placed under suspension for allegedly leaking sensitive information to the Tehelka investigators. Mathew, for his part, responded with petitions directed to the National Human Rights Commission and the President, pleading that he was being targeted merely because he had certain sympathies - though expressed in a manner fully consistent with his official position - with the cause of Dalits and the oppressed communities.

Mathew was suspended even before he could reply to the show-cause notice that had been issued him. The basis for the notice was visibly rather thin. A newspaper published from New Delhi, with scarcely concealed sympathies for the ruling Bharatiya Janata Party, had featured a front-page story shortly after the Tehelka revelations, based entirely on an unnamed source's recollections of Mathew's supposedly unseemly political links.

In using this rather dubious report as the basis for disciplinary action and then preempting the right of reply of the official, the Home Ministry under L.K. Advani can undoubtedly claim a degree of novelty in administrative procedure. But this does not by any means exhaust the litany of curious goings-on in the government in the turbulent aftermath of the Tehelka tapes.

Former Defence Minister George Fernandes has been wondering out aloud about the efficacy of the country's intelligence services. If the Intelligence Bureau (I.B.) failed to detect the operations of the two Tehelka reporters for all the four months or so that they had a free run of Defence Ministry officials, then in Fernandes' opinion it points to an intelligence failure even greater than in the case of Kargil. Cut to the quick by this rather transparent effort to call into question the credentials of his Ministry, Advani politely demurred.

If the stories that began emerging on the Tehelka team's operation in the second week of April are any indication, then the I.B. has indeed been working rather strenuously to debunk the message by discrediting the messenger. Three possibilities have been broached in terms of the origins of the Tehelka sting. Curiously, one of them points to the powerful London-based family of financiers, the Hindujas, who ostensibly planned the entire operation to take the heat off themselves in the Bofors prosecution.

The damage control team in government is also putting out the possibility that the estranged wife of a prominent arms agent had engaged a detective agency in London to uncover certain details of his commercial dealings. Tehelka, in turn, was contracted by the London agency to assist in the investigations, according to this version. But as the investigation progressed and its journalistic potential became apparent, Tehelka's operations acquired an autonomy of their own, it was stated.

A third possibility is the involvement of a defence contractor that had lost out in certain crucial deals and was keen on increasing its leverage in the Indian arms procurement apparatus.

THE Tehelka team has of course reacted to each of these stories with prompt and vigorous denials. The factual basis of the Hinduja story is Tehelka chief executive Tarun Tejpal's recent visit to London, in the course of which he went, by his own admission, to the Hinduja headquarters. But the purpose of this visit, he says, was only to explore if there was any possibility that Tehelka could supply editorial content to a website owned by the Hinduja family. But he was extremely torn at the prospect of meeting a close relative of the three brothers who have been indicted in the Bofors payoffs scandal. On this account, he backed out at the last minute, literally when he and a colleague were waiting for the lift to take them up to the office of Dheeraj Hinduja. For the duration of his colleague's meeting, Tejpal claims, he paced the pavement outside the Hinduja headquarters.

Aniruddha Behal, one of the duo of reporters that actually conducted the sting operation, has meanwhile alleged that government agencies have been tapping his phone and using the information thus gained to interrogate and pressure his colleague Mathew Samuel.

Yet with all this energy expended, the government has not quite managed to free itself of the taint of the Tehelka tapes. And with the travails now besetting the revenue apparatus and the supervisory authorities for the stock markets, the government's stocks of scandal seemingly have a long way to go before they are anywhere near depletion.