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Business News/ Opinion / Reining in the hound
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Reining in the hound

As regards the CBI itself, there is greater need for transparency and accountability in its operations

There is no denying the CBI has had the habit of barking up the wrong tree and, worse, refusing to climb down. Photo: Ramesh Pathania/Mint Premium
There is no denying the CBI has had the habit of barking up the wrong tree and, worse, refusing to climb down. Photo: Ramesh Pathania/Mint

The recent critical observations by former West Bengal governor Gopalkrishna Gandhi on the functioning of the Central Bureau of Investigations (CBI) could not have come at a more opportune moment. It comes within days of the publication of a book by former coal secretary P.C. Parakh. The book criticises the CBI over its investigation of alleged irregularities in the allotment of coal blocks which, according to the Comptroller and Auditor General of India (CAG) resulted in a notional loss of 1.86 trillion to the exchequer. The blocks were not auctioned to the highest bidder but allotted on a nomination basis, argued the CAG.

Gandhi accused the CBI of “high handedness and lack of sensitivity to loss of reputation to senior members of the bureaucracy against whom needless enquiries can get initiated…." The context is not lost. CBI had named Parakh, an IAS officer of repute, in the coal block allotment case along with industrialist Kumar Mangalam Birla over the allocation of a captive mine to Hindalco Industries Ltd.

Parakh’s outpouring is no mere act of sabre rattling aimed at an offensive to protect himself. His credentials are attested to by none less than Vinod Rai, the CAG who audited the coal files and set the tone for the CBI investigation. Rai emphatically states that Parekh did nothing wrong and that the CBI investigations will finally clear him.

There is no denying the CBI has had the habit of barking up the wrong tree and, worse, refusing to climb down. For example, eight years ago, it lodged a case against the chairman of a leading public sector power company on charges of corruption. So far, they haven’t found a shred of evidence. Yet, they haven’t closed the case.

Partly, it is a bitter blend of incompetence and high handedness. Cops have little appreciation of policy formulation and administration—they have little or no experience in this field. You will hardly find a police officer at any level in an economic ministry.

This aspect is of paramount significance given the complexity of issues in economic sectors, especially the financial sector. Last month, the CBI initiated a preliminary enquiry (PE) against former Securities and Exchange Bureau of India (Sebi) chairman C. R. Bhave—yet another case of a reputed bureaucrat coming under the CBI scanner. Bhave’s sharp reaction cannot be ignored. He has argued that the CBI has adopted a ‘pick and choose’ approach in a case which has no financial implications for the state. Worse, the income tax department had already given a clean chit on the issue. While the PE is more in the nature of a fishing expedition, its publicity sought by the CBI was in bad taste.

Moreover, the mere act of initiating a probe or raiding a senior government official’s residence is in itself a punishment, for it inflicts a deep social stigma. Even worse would be a prison term for the innocent till such time as the facts are brought to light.

The more vicious side of the CBI’s conduct is its willingness to allow political interference. Such interference is tantamount to abuse of office. In early May last year, CBI chief Ranjit Sinha agreed with the Supreme Court’s observation that the CBI was a “caged parrot" that speaks in its master’s voice.

To restore its credibility as an efficient investigative agency that does not chase flimsy conspiracy theories, the government needs to set out the role of the CBI in regard to economic crimes.

To address the aspect of political interference by way of oversight by the courts is hardly a long-term solution. To start with, the selection of the CBI chief should be in consultation with the opposition political parties as is the practice in the case of the CAG and the Central Vigilance Commission (CVC).

Secondly, economic controversies should be vetted by a pre-investigative body and only those parts that have an element of corruption should be referred to the CBI. This is not a new idea—it was suggested and implemented way back in 2001 after a stock market scam. It is another matter that the Advisory Board for Banking Commercial and Financial Frauds (ABBCFF), consisting of retired bankers of eminence under the CVC, failed to perform to the finance ministry’s satisfaction – the pace of progress was slow.

However, this is a good start point. The ABBCFF should be beefed up and talent should be drawn from the banking industry and the market regulator, Sebi. In other sectors that have the presence of a regulator, for example, electricity and telecom, the government should lean on these institutions to snoop around, ascertain the nature of crimes and fix responsibility.

As regards the CBI itself, there is greater need for transparency and accountability in its operations. Its officers need to be evaluated on the basis of efficiency, rigour and analytics of scrutiny and not convictions in a court of law.

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Published: 18 Apr 2014, 01:00 PM IST
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