Kauṭilya, answered from the texts and cited to the page.
Yes, the king may do all three. A king cannot see his officers' hearts, so he must learn their conduct, and for that he needs spies and tests. Each of the three has its limit. On testing, I hold that the king shall never make himself or his queen the butt of the test, "nor shall he vitiate the pure, like water with poison." The reason is practical.1
A valiant mind, once vitiated and repelled under the four allurements, may not recover its first form.1 So the king sets up an external object as the bait and learns through his spies whether the minister is pure or impure.1 The use follows from the finding: those tried under every allurement become prime ministers, those proved impure are put to the mines, the timber and elephant forests and the manufactories.2
The test sorts men to their work. It is not a snare for the loyal. On spies, the king assisted by his ministers tried under espionage creates them in many guises: the fraudulent disciple, the recluse, the householder, the merchant, the ascetic, the classmate, the fire-brand, the poisoner and the mendicant woman.3 Each is bound by oath to report whatever wickedness he finds in others.3
The honey is at the tip of every official's tongue, and the fish that drinks under water is not seen; only the watcher learns what the eye cannot. On secret punishment, the king in the interests of righteousness may inflict it on courtiers or confederacies of chiefs who are dangerous to the safety of the kingdom and who cannot be put down in open daylight.4
Take the whole sentence: the seditious, the dangerous, and the impossible to reach by open trial. For such a man the measures are set out in detail. A brother is induced to claim inheritance and the quarrel is turned against the minister; a rebellious tribe is given the minister as commander; and where the assassin falls, he too is put to death under the plea of parricide.5
I do not soften these chapters. They are the price of ruling among many enemies with few means. The boundary is the book's own. Such punishments fall upon the seditious and on those who uphold the enemy's cause.6 The king who awards them must be possessed of forbearance and apprehending no disturbance in the present or future.6 And the aim is stated plainly: that the whole country may follow the sons and grandsons of the king loyally, free from the troubles men cause.6 The secret rod is for the thorn, never for the sound limb.
A king cannot see his officers' hearts and cannot trust their words; he can learn their conduct. So he tests them by the four allurements through agents, never offering himself or his queen as bait; he places spies in every guise in his own country and his enemy's; and against the great officer who cannot be openly punished without danger to the state, he uses secret punishment.7 These means are for the wicked and the enemy, and they are the price of ruling with few means among many enemies.8
Never, in the view of Kautilya, shall the king make himself or his queen an object (laksham, butt) of testing the character of his councillors, nor shall he vitiate the pure, like water with poison.Arthasastra
those whose character has been tested under all kinds of allurements shall be employed as prime ministers (mantririah), while those who are proved impure under one or all of these allurements shall be appointed in mines, timber and elephant forests, and manufactories.Arthasastra
the king shall proceed to create spies: spies under the guise of a fraudulent disciple (kapatika-chhatra), a recluse (udasthita), a householder (gfihapatika), a merchant (vaidehaka), an ascetic practising austerities (tapasa), a classmate or a colleague (satri), a fire-brand (tikshna), a poisoner (rasada), and a mendicant woman (bhikshuki).Arthasastra
The king in the interests of righteousness may inflict punishment in secret on those courtiers or confederacy of chiefs who are dangerous to the safety of the kingdom and who cannot be pul down in open daylight.Arthasastra
The task being accomplished, he, too. may be put to death in the same spot, under the plea that he is a parricide.Arthasastra
Possessed of forbearance and apprehending no disturbance either in- the present or future, the king may award punishments in secret, both upon his own subjects and those who uphold the enemy's cause.Arthasastra
Hence, when foreigners carry on an intrigue, the king should employ the policy of dissension and coercion. Spies under the guise of friends may inform foreign conspirators: "Mind, this your king, with the desire of enriching himself, is naturally provoked against you all." Then fiery spies may mix with the servants and soldiers of the abettor (of foreign conspirators) and kill them with weapons, poison, and other…Arthasastra
Then the minister may introduce other ministers (to the enemy). If they do (kill the enemy) as they are told, they may be caused to be set free; if they are unable to do so, they may be caused to be caught hold of. Whoever has gained the confidence of the enemy may tell the enemy that he (the enemy) has to guard his own person from such and such a chief.Arthasastra
The pages that earned the book Weber's verdict and its author the epithet crooked-minded; the same pages forbid corrupting the pure in order to test them.