It is slightly perplexing that finance minister Thomas Isaac is behaving as if the end is near just because he came across some adverse remarks about KIIFB in a draft report of the Comptroller and Auditor General (CAG).

Why would the finance minister be so overly furious when he had not been denied the chance to counter the CAG's opinion, and the final report is yet to come?

Here is why. Top finance department officials told Onmanorama that the damning observation about KIIFB had not appeared in a draft report, as Isaac keeps insisting, but in the final 'State Finance Audit Report' that has been printed, bound in the CAG's typical glossy yellow cover and handed over to the government.

Meaning, the observations about KIIFB have already been written in stone, like the CAG findings on Palmolein import and SNC-Lavalin deals before.

The finance minister had said that the finance department and KIIFB officials were busy drawing up a long and fitting response to the CAG. But the state's detailed response will not alter the observation that the KIIFB's borrowing model was unconstitutional as the report has been finalised and printed.

However, sources said the CAG report on the state finances had just a fleeting mention of KIIFB as the audit is preoccupied mostly with revenue and capital receipts, quality of expenditure, debt management and the financial management and budgetary control of the state in general.

The KIIFB gets just a brief general mention in a chapter on 'Financial Analysis of Government Investments, Loans and Advances' of the audit report, and it says the KIIFB violates article 293 (1) of the Constitution, which essentially says that states could borrow only within the country. According to Isaac, the CAG has done more serious harm. He says the 'draft report' has red-inked all KIIFB borrowings, both within and outside the country.

In fact, a detailed CAG assessment of KIIFB is still in the works. A different audit team is doing a separate exclusive audit of the KIIFB. It was this team that had sent the 76 queries that Isaac had mentioned, not the audit team that prepared the report on state finances. The exclusive in-depth audit of KIIFB is just in the half-way stage. Not even a draft report has been sent to the finance secretary.

If he is in the possession of a final report, why would Isaac insist that the CAG had sent only a draft? A possible reason would be, a draft report is a communication between the CAG and the government. Though spilling the content of a CAG draft is improper, it can turn serious only if the CAG complains. Isaac knows fully well that, unlike politicians, constitutional bodies keep away from public controversies.

But a final audit report is the property of the Assembly, and therefore sacred. He cannot utter a word from the report without the knowledge of the House. Yet, if Isaac has taken the risk of going to town with the contents of a report that should have been lawfully kept confidential, it was clearly because the CPM could not afford a CAG bombshell in January, when the Assembly is expected to reconvene.

When political survival is at stake, legislative privileges take a back seat. Now, the finance minister has not only told the public what to expect but is also attempting to teach the public how to perceive such a report with incriminating references. Even before the CAG report could be tabled in the Assembly, Isaac has turned the KIIFB issue into a biblical David vs Goliath struggle.

In a sense, Isaac had won the first round as the sharpest argument of the opposition Congress is just technical, that he has superseded the Legislature. The Assembly Public Accounts Committee chairman and Congress MLA V D Satheesan is all set to move a privilege motion against Isaac arguing that the finance minister had trampled upon the powers of the Assembly by publicising a highly confidential report that should be tabled in the Assembly first.

The LDF knows a 'friendly' Speaker can easily bail Isaac out of trouble to get out of the crisis.