The Enforcement Directorate is the hottest political entity for the opposition in India. And for good reason. Indian bureaucracy is polarised if not completely politicised, and the CBI and ED are just old hacks in the game. Those who have reported on these investigating agencies well know their potency in helping the ruling government settle political scores.
However, in the ongoing heat over the ED’s harsh actions in the political arena, dubbed by its victims as spreading ‘terror raj’, the experienced eyes should note that the Narendra Modi government has broken the cardinal rule of the hardened nexus between political interests, business and industry interests and the bureaucracy’s wily manoeuvring of these two powerful forces. In New Delhi, and in all Indian state capitals, the dictum was ‘those who live in glass houses never throw a stone.’
But Prime Minister Modi, who enjoys public support on his own strength and doesn’t depend on even his party, the BJP, has opened Pandora’s box by using the statutes available to the government to fix financial irregularities and corruption to weaken the opposition.
One ED officer says as a matter of fact, “The difference now is that we are pursuing the leads.”
ED has more teeth now, CBI watching
The Rules of the controversial Prevention of Money Laundering Act (PMLA) were notified and came into force on 1 July 2005 when the Manmohan Singh-led UPA government was in power. It shows that all governments like harsh laws, not just the Modi government. The glass-house dictum was a cosy arrangement. So, from 2005 to 2014, the PMLA and its killing edge were there but weren’t used as they are being now. The recent Supreme Court judgment that upheld the harsh clauses of the PMLA not only strengthened ED’s actions but also ensured the law is here to stay, unchanged.
The joint statement of opposition parties against ED actions says, “We will intensify our fight against the anti-people Modi Sarkar.”
There’s more to it, however, than criticism about the ED’s “selective approach”. The truth is that allegations made by opposition leaders that the ED and CBI are being used for the political agenda of the government are spot-on, but it’s also true that these days, big cases raised by the agencies are not at all weak. Uncovering the cash at TMC leader Partha Chatterjee’s aide’s house in Kolkata shows all of ED’s actions aren’t perceived as ‘anti-people’. Rather, there is a shock and awe effect. One Bengali vendor innocently asked a TV reporter, “It’s people’s money. But why did she (Arpita Mukherjee) not invest it?”
Inside the headquarters of the CBI, many old-timers are regretting that the ED got massive credit for the historic catch of cash, jewellery, properties, and bank accounts worth more than Rs 50 crore in the Partha Chatterjee corruption case that was actually based on cases filed by the CBI related to irregular appointment of teachers by the West Bengal School Service Commission.
It’s not just the institutional rivalry, but the chronology of actions and inactions that are bothering them. The Kolkata High Court’s division bench had ordered the CBI to file the case in the matter of irregular appointment of teachers. The FIR was filed, and the investigation began. When Partha Chatterjee’s involvement cropped up, he was quizzed by the CBI three times. After every interrogation, he was allowed to go home. Normally, if not always, the CBI conducts searches in the homes and offices of the accused soon after filing the FIR. But, in this case, it didn’t. Questions are being asked if any lapses took place.
Also, in the middle of such an important case where the court-appointed committee had already found huge irregularities, Akhilesh Kumar Singh, DIG of CBI in Kolkata, was transferred overnight and shifted to Delhi on special duty and research desk on 29 June 2022. By 22 July, the ED shook the nation with photos of heaps of rupee notes seized by it from Arpita Mukherjee’s apartment. It has shaken West Bengal politics and raised fear of the ED like never before.
‘Proceeds of crime’
There is no doubt that PMLA is a draconian act — the onus of proving innocence is on the accused. Also, the ED has more stringent powers, compared to the CBI. It can seize properties of not only someone who is suspected of indulging in financial irregularities, but also go after someone suspected to be the courier of the proceeds of crime.
Right now, Section 2(1)(u) of the PMLA, which is much used and abused, says, “proceeds of crime” means “any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property”. This means, for example, if any murder takes place and while investigating it a money transaction comes up, the ED can enter the case.
The Supreme Court in its recent order says that there is no need to register an Enforcement Case Information Report (ECIR) even formally before initiating penal action or prosecution against the person who is facing the case under the PMLA. The ED can act against anyone who it thinks is involved in “proceeds of crime”.
The Act’s potency was once experienced by former finance minister P. Chidambaram during his tenure (2012-14). The ED officer, Rajeshwar Singh, had asked for the income tax returns of his son Karti Chidambaram. The demand was legal, and Singh got it too.
So far, Rahul Gandhi has spent 50 hours spread over five days and Sonia Gandhi 12 hours over three days in the ED office answering queries in the National Herald case.
It’s a new ED
The ED doesn’t work with a skeleton staff anymore. Now, it has four times more officers and bigger budgets. Long back, the ED has gone digital. The newly built Pravartan Bhawan on APJ Abdul Kalam Road in New Delhi has many more domain experts sitting and decoding thousands of data and files, and unearthing shell companies that exist only on paper. The top ED team is an expert in tracking trails of money earned out of financial irregularities. Pravartan Bhawan boasts of modern office space. So far, the ED has had an unpardonably poor track record of conviction in its cases, but if “political interferences” don’t come in the way, then the numbers are likely to improve.
The ED is currently headed by Sanjay Kumar Mishra, an Indian Revenue Service officer who is a well-known authority on international finance and taxation and has handled the finance ministry’s Foreign Taxation division. He is known for his meticulous work in matters related to violations of income tax rules. He is a tough taskmaster and pursues cases deeper.
The department wasn’t surprised when in November 2021, the Modi government issued an ordinance to give him an extension of one year. His second extension is politically so potent that it has been challenged by eight petitioners in Supreme Court. The notices have been issued by the Supreme court to the government, and Mishra too.
Vivek Wadekar (1991 batch) is the special director of the ED. Again, he is a taxation expert.
One retired ED officer explains that for the last two decades, India’s lawmakers and lawbreakers have been aware of the potent PMLA and its applications. But under the Modi government, the ED’s public profile has changed. Now, ED doesn’t mean “it deals only with cases of violations of foreign exchange.”
Whenever the CBI files an FIR, the ED is bound to enter all those CBI cases where the money trail needs to be unearthed. The cases of Partha Chatterjee and Sanjay Raut are about alleged money laundering (within the country), which may or may not involve violations of foreign exchange rules, but these cases fall into the ED’s purview under the PMLA. There are some 32 different acts and many more clauses of the criminal act which if the CBI applies in any of its FIR, then automatically ED can take cognisance and enter the case. Like it did with Partha Chatterjee. The local office of ED headed by Subhash Agrawal in Kolkata had its own intelligence network that helped track the money and got the big catch. Now, Aadhaar number, PAN card, income tax returns and buying and selling of properties and shares are all thickly interlinked and less opaque than before.
Meanwhile, let’s see how and when the CBI files the much-awaited case of disproportionate assets against Partha Chatterjee. Remember how the disproportionate assets case against Mulayam Singh Yadav and Akhilesh Yadav once saved the Congress-led UPA government in 2008?
Sheela Bhatt is a Delhi-based senior journalist. Views are personal.