The correct option is B in the government's involvement
A noun clause is a dependent clause that functions as a noun. It usually
begins with what, whatever, whom, that and other such relative
pronouns. A noun clause can act as a subject, object, predicate
nominative or object of a preposition, in a sentence.
A noun phrase is a word or a group of words containing a noun, that
functions as the subject, object or object of a preposition in a
sentence. A phrase does not contain a subject or a verb, or both of them (as opposed to a clause).
Option B is a noun phrase that is the reduced form of the underlined noun clause, where the verb 'involved' is changed to a noun 'involvement'. It is the most appropriate option that is equivalent in meaning to the clause. Hence option B is correct.
Option A is incorrect because it is neither a clause nor a phrase, the verb 'was' is followed by 'involvement' instead of 'involved', it's grammatically incorrect.
Similarly, option C is incorrect because it is grammatically incorrect.
Option D is incorrect because the answer lies in B.