Stung to the quick by the occurrence of the names of the Congress party and then External Affairs Minister Natwar Singh in the list of supposed recipients of allotments of oil by the Saddam Hussein regime in Iraq under the oil-for-food programme, the government has taken timely action.

It has appointed former under-secretary general of the United Nations Virendra Dayal to collect and compile all relevant and authentic information, and former chief justice of India and judge of the International Court of Justice R S Pathak to undertake a formal judicial inquiry into the imputations, on the basis of material obtained in the form of documents and oral testimony.

Apart from containing the political fallout, this will also serve to counteract a tendency that was getting more and more pronounced in recent years.

The tendency was on the part of public figures implicated in scams to brazen it out, following a familiar pattern of outraged denials and protestations of innocence, of badmouthing the accuser without answering his specific charge, ruling out any inquiry citing certificates of good conduct given to oneself or by dignitaries roped in for the purpose, and hauling the accuser over the coals by making him the victim of a vengeful inquiry for foisted misdeeds.

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It would not have escaped discerning observers that the prime minister had in the beginning commented -- not directly but through his press advisor, and that too in a measured and judicious manner -- about the government being 'deeply concerned' over the unverified references.

He had mentioned the evidence being 'insufficient to arrive at any adverse or definitive conclusion'. But at the same time, he had mentioned about the government 'being determined to go into the root of the matter and establish the truth or otherwise of the references'.

This is the position taken by the Prime Minister's Office from the day the story was published in The Hindu on October 29.

This shows there has been no hesitation in the prime minister's mind to confront the situation head on. His response should be taken as reflecting those of Sonia Gandhi [Images] as well, since during the months he has been in office, both of them have perfected the art of thinking and acting in unison.

It is worth noting that although he has been saying that mention in the annexures to the report does not by itself constitute proof, it is clear this is only for the record -- because he has not so far come out with any categorical assertion, unlike Natwar Singh or the Congress spokespersons, that the report is false and baseless.

In short, he has been giving the impression of one who is willing to keep an open mind until the inquiries are completed.

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This has to do not just with his upbringing as a civil servant who does not want to say things he will regret later. It may have also to do with the fact that the reach of a prime minister's eyes and ears are not confined to media reports and sound bytes. He has many other sources, active behind the scenes, from who he keeps receiving a variety of inputs.

For instance, a story ricocheting in media circles is that Finance Minister P Chidambaram had advised Dr Singh that based on a quick crosscheck by his ministry of leads provided by the Volcker Committee report with reference to India, there was enough reason for the government not to be dismissive of its contents.

Meanwhile, there has been a disturbing development, which lends a semblance of credence to the information put together by the Volcker Committee.

Of the four from India named as non-contractual beneficiaries, Reliance Petroleum [Get Quote] and Professor Bhim Singh have already corroborated the entries in the report, while maintaining, in the case of the former, that the allocations were handled as a regular commercial transaction and, in the case of the latter, that an offer of the allocation of the specified number of barrels was made but not accepted as a matter of principle.

Among the Indian companies shown as contractual beneficiaries who supplied various items falling within the definition of humanitarian goods in return for oil, Cipla and Tata have been candid in admitting the transactions along with backhand payments going by the euphemism of charges for inland transportation and fabrication which, they say, they considered to be legitimate.

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Likewise, it is seen from what can be gathered from ambiguous reactions of the Australian Wheat Board, Daimler Chrysler, Volvo, Siemens and Weir that comments by the Committee on their role have not been off the mark.

In the United States, investigation of the oil-for-food program has actually resulted in indictments against two Russian citizens, a Texas oilman, a Bulgarian living in the US and a London [Images] oil trader.

It can, therefore, be plausibly argued that the very fact that the inclusion of some among those named have been found to be justified, although their culpability with regard to utilising the oil allocations or making illicit payments may be a moot question, points to the necessity for a further probe into the deals insofar as they concern individuals and business concerns in India.

A view being propagated is that the documents on which the Committee has relied for making its observations may have been deliberately fabricated by the Central Intelligence Agency or the US administration or, at their behest, by Iraq's oil ministry or its State Organization for Marketing Oil to put into trouble those who were sympathetic to Iraq or Saddam Hussein, or who opposed the sanctions or the US invasion.

This is to assume either that the three eminent members of the Committee were themselves privy to such forgery and fabrication, or that they were so naive as to be taken for a ride.

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Actually, the records and notes of officials in Iraq's oil ministry and SOMO were in the public domain from the end of 2003, and they were the ones I drew upon for my article 'Oil as a weapon of mass corruption' published (Business Line, October 15, 2004) 13 months before the submission of the Volcker report and anticipating its findings.

That apart, why should these documents of the period include corporate icons of the industrial world, or stray individuals and political parties, unless it be for recording dealings in the course of normal transactions?

In the specific context of India, what motivation could the alleged fabricators, or the Iraqi officials who probably were ignorant of India's internal politics, have for choosing the four entities named as non-contractual beneficiaries and the 130 companies as contractual beneficiaries?

It is entirely right, in view of these considerations, that the government has decided to leave no scope for idle speculation, and to clear the air once and for all. Only, the route of the double-barrelled inquiry it has chosen should not be allowed to lead everyone into a blind alley.

The possibility of this is inherent in some of the loose ends.

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For instance, only the Congress and Natwar Singh are proposed to be brought within the purview of the inquiry, keeping the business concerns out for the present.

There is no indication, in the terms of appointment, of Virendra Dayal working on the diplomatic front requiring him to assist the inquiry by Justice R S Pathak on the judicial front. In the absence of such a requirement, there is every chance of overlap or, worse, crossing of lines, with considerable drain on resources and loss of time, blurring the nature of the final outcome.

It is also doubtful whether Dayal's status as a plenipotentiary will give him sufficient clout to prevail upon the various actors in the affair to comply with  his demands for information and evidence.

Already, Volcker has politely declined to act on any request other than from a judicial body.

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The inquiry by Justice Pathak also is likely to face a number of legal and functional impediments. For starters, it has not been set up under the Commission of Inquiry Act, which would have automatically vested Justice Pathak with extensive powers in regard to the summoning of witnesses, production of documents and enforcement of his directions on pain of penalties in the form of fine or imprisonment.

If he is merely viewed as a standalone individual embarking on an inquiry, even were the government to confer some of the powers under the Act, his authority would be nothing more than that derived from an executive fiat and not of a statutory Commission.

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Thus, he is bound to feel hobbled in discharging his duties.

The other factor hamstringing Dayal and Justice Pathak's efforts arises from want of extra-territorial jurisdiction. Governments, state agencies, companies, intermediaries and banks will not be under any compulsion to make available to them on demand all that they know pertinent to the inquiry, and may not cooperate especially if they have something to hide or want to protect their clients.

This does not take into account the enormous strain that sifting and scrutinising documents, examination of witnesses and travelling to distant places will impose on Justice Pathak, who is 82 years old.

If, for these and other reasons, the inquiry turns out to be a damp squib, the damage it will cause to the government's credibility will be incalculable.

There is still time for the government to guard against facing accusations of eyewash by devising suitable ways to make the inquiry purposeful, in consultation with the Opposition, so that the outcome finds acceptance across the entire political spectrum.

B S Raghavan was formerly director (political) in the ministry of home affairs.

Also see:
Complete coverage: The Volcker report