How The Government Protects A Politician From Prosecution

Who remembers Baburao Shankaranand, former Union Minister in successiveCongress governments who created a record by getting elected from the ChikodiLok Sabha constituency in Karnataka no less than six times?

Well, Shankaranand's name came up recently in an official document preparedby the Banking Division of the Ministry of Finance for the members of the JointParliamentary Committee (JPC) that is inquiring into the stockmarket scandal.

The document in question is the government's June 13 action taken report (ATR)on another ATR presented in December 1994 which, in turn, succeeded yet anotherATR submitted in July 1994. The last-mentioned ATR was given in response to anearlier JPC report on the 1992 stockmarket scam that had been submitted inParliament in December 1993.

As far as the corruption case against Shankaranand is concerned, the latestATR has the following statement on page 165: "Investigations intodeployment of funds by (the) OIDB (Oil Industry Development Board) revealed(the) involvement of Shri B. Shankaranand, former Minister for Petroleum &Natural Gas for violation of (the) OIDB Act for (the) prosecution of whichsanction of the Government is required."

The ATR goes on to state that the Central Bureau of Investigation (CBI) hadsought sanction for prosecuting the former Minister under the OIDB Act, but theUnion government has not given its sanction.

Behind this bland statement couched in typical bureaucratic language lies asordid story of how influential political leaders and powerful bureaucratssuccessfully prevent one of their own kind from being prosecuted even wherethere is considerable evidence to initiate such punitive measures.

In 1992 and 1993, thirty MPs belonging to the JPC headed by Ram Niwas Mirdhaspent many days scrutinising OIDB documents relating to the manner in which theBoard's funds were parked in two public sector bodies, Syndicate Bank andCanbank Financial Services (Canfina), a subsidiary of Canara Bank.

The JPC found that Shankaranand (the then Petroleum Minister and OIDBChairman) had manipulated tender norms to favour these two organisations, which,in turn, had passed on large amounts of money belonging to the OIDB to twoparticular private corporate groups, Fairgrowth and Essar. The violation ofprocedures had led to the public exchequer losing an amount no less than Rs 130crore.

The JPC report, submitted on December 21, 1993, had the following to remark:"It had become a usual practice to entertain revised offers after the lastdate of submission of quotations and after the files had been submitted to theChairman, OIDB, for final orders. Such practices make a mockery of the tendersystem and violate the norms of prudent financial management."

Further, the report added in no uncertain terms: "Unavoidably, suchactions have created doubts that some institutions had received preferentialtreatment at the hands of the OIDB. Unfortunately, the explanations offered byboth the then Chairman (Shankaranand) and others from OIDB have in no way helpedin dispelling such suspicions."

Before the JPC report had been submitted, two important developments hadtaken place. In January 1993, Shankaranand's portfolio was changed by the thenPrime Minister P V Narasimha Rao: from Minister for Petroleum & Natural Gas,he became Minister for Health.

Then, in September 1993, an inspector of the CBI filed a detailed 101-pagereport on the basis of a complaint filed by Syndicate Bank. The report accusedShankaranand of entering into a criminal conspiracy resulting in a huge loss tothe exchequer and recommended that he be prosecuted.

The CBI report was leaked to newspapers in early-December, a few weeks before the JPC report was submitted. Two Communist Party of India MPs, (thelate) Indrajit Gupta and Gurudas Dasgupta distributed copies of the report toall who wanted to read it.

Three days before the JPC report was submitted to Parliament on December 21,1993, the then Finance Minister Manmohan Singh offered to resign, but notShankaranand. Instead, on December 30 that year, he put up a spirited defence ofhis actions in the Lok Sabha.

Shankaranand claimed he had acted in the best interests of the IODB byplacing its funds with the organisation that offered it the highest rate ofreturn. The CBI, however, argued that the OIDB, on explicit instructions fromits Chairman Shankaranand had deliberately manipulated tender norms to favourparticular organisations.

The latest June 13 ATR states that Canara Bank had reached an understandingwith the OIDB to enable Canfina to repay its dues to the Board and that the OIDBhad revised its procedures to ensure that investment decisions were taken by acommittee not an individual. The December 1994 ATR had stated that all UnionMinisters had been advised that it would be best for them to dissociatethemselves from any committee or institution or organisation responsible forinvesting public funds.

The story does not end here. A full year after the JPC report had beensubmitted, in December 1994, Shankaranand was asked to resign from the post ofHealth Minister. That year, the Department of Personnel (headed by Narasimha Raohimself) issued a directive stating that any request for permission toinvestigate or prosecute a Union Minister would now have to be referred directlyto the Prime Minister.

As the years went by, Shankaranand, a representative of the Scheduled Casteswho had won six Lok Sabha elections continuously from Chikodi since March 1967,was humbled at the hustings by a relatively unknown Janata Dal candidate (RathnamalaDhareshwar Savanoor) in the May 1996 general elections. The story was repeatedin the March 1998 elections; this time he lost to a Lok Shakti candidate.

Shankaranand's son, who was the Congress candidate from the same constituencyin Karnataka in the October 1999 elections, also lost. The magic had clearlyworn off by then.  Meanwhile, three years after Shankaranand had been askedto put in his papers, in December 1997, the Ministry of Home Affairs asked theLaw Ministry to "reconsider" its advice that there was "no casefor prosecution" against the former Minister in the OIDB case.

In February 1998, the President of India K R Narayanan asked the Uniongovernment to "reconsider" the case of corruption against Shankaranand.  Thereis an obvious question that still remains unanswered.

It may be quite understandable why the Congress government under NarasimhaRao was reluctant to initiate punitive action against Shankaranand. It could beargued that since the two United Front governments under H D Deve Gowda and I KGujral were dependent on Congress support, the corruption case againstShankaranand remained in cold storage.

What is inexplicable is why the Atal Behari Vajpayee government, which hasbeen in power since March 1998, has not found it fit to pursue this particularcorruption case against one of its political opponents.

The author is Director, School of Convergence @ International ManagementInstitute and anchor, "India Talks" on the CNBC India televisionchannel.