Why the Enforcement Directorate is being seen as a political weapon

Is it any wonder that Sanjay Raut, Shiv Sena MP, skipped summons twice to present himself before the Enforcement Directorate (ED) before he was raided and detained on Sunday? The truth is that the ED, already a feared institution, has been further empowered in cases relating to the Prevention of Money Laundering Act (PMLA), with the Supreme Court giving its stamp of approval to changes made by the Parliament in 2019. But it may be that despite its good intentions, the government’s tinkering may have made the law damaging to the polity in certain ways.

The ED’s sweeping powers, combined with less accountability than the CBI, have made it an effective instrument for the executive. Four laws are entrusted to it – the Prevention of Money Laundering Act, 2002 (PMLA), the Foreign Exchange Management Act,1999 (FEMA), the Fugitive Economic Offenders Act,2018 (FEOA), the Foreign Exchange Regulation Act, 1973 (FERA), and it is the sponsoring agency under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) for preventive detention under FEMA.

The PMLA was already a harsh law, to begin with. The UPA government in 2009 did away with the prerequisite that another agency file an FIR or charge sheet under the PMLA before ED could take up the case. This allowed ED to make arrests without a warrant in certain conditions and made PMLA offences cognisable and non-bailable. Between 2009-2012 the Congress used PMLA to target opponents – recall the money laundering cases against Madhu Koda in Jharkhand, Y S Jaganmohan Reddy in Andhra, the Karunanidhi family in Tamil Nadu and its own leader Suresh Kalmadi. 

Unlike the CBI, the ED has policing powers without the accountability imposed on the regular police. In non-ED cases, there is an institutionalised paper record, like the case diary, which a court can summon once an FIR is registered. But this is non-existent in ED cases. Moreover, contrary to the general assumption by courts in India, the accused is presumed guilty until proven innocent and bail is very nearly impossible.

Also read: ED arrests Sanjay Raut in money laundering case linked to Mumbai chawl

In 2019, the BJP government made the provisions of PMLA even stricter through amendments introduced as a Money Bill in Parliament. These changes have made the ED’s investigation process even more opaque as the detailed Enforcement Case Information Report, or ECIR does not need to be shared with the accused, unlike an FIR; cases can be opened retrospectively; search and seizure can be carried out without an FIR and confessions before ED (unlike those before the police) are admissible in court. The Supreme Court has now put its stamp of approval on these provisions.

Formerly, the Central Bureau of Investigation (CBI) was the agency accused of acting by political opponents on behalf of the ruling regime. However, there are some hurdles in its operations. The CBI, governed by the Delhi Special Police Establishment Act, needs the “general consent” of state governments to investigate in the state. Given its perceived misuse, nine states since 2015 have withdrawn general consent for CBI investigations. All except one were ruled by Opposition parties when consent was withdrawn. 

It can be nobody’s case that politicians are not corrupt. However, coincidentally, the provisions of PMLA have been used by ED against politicians in states that have withdrawn the general consent to the CBI. In Maharashtra, ED led PMLA investigations against Shiv Sena leaders and legislators until the party split, with the splinter group forming a new government in alliance with the BJP. Members of other constituent parties of the Maharashtra Vikas Aghadi government -like the Nationalist Congress Party (NCP)- were also investigated, and two of its leaders, Anil Deshmukh and Nawab Malik, are now behind bars in PMLA cases. In West Bengal, ED’s action against the ruling Trinamool Congress leaders under PMLA began on the eve of the 2021 state assembly elections and has continued since.

In Punjab, former Chief Minister Charanjit Singh Channi’s brother and nephew were hauled in under the PMLA just before the state elections; in Jharkhand, an aide of CM Hemant Soren was arrested, his press advisor summoned, and a minister, Alamgir Khan, is being investigated; in Chhattisgarh, the ED has accused CM Bhupesh Baghel of weakening the case against an IAS officer in a Public Distribution Scheme scam; and in Kerala, Chief Minister Pinarayi Vijayan is on the ED’s radar in a gold smuggling case while notices have been issued to ex-finance minister Thomas Isaac regarding the dealings of Kerala Infrastructure Investment Board.

The ED has also questioned Opposition leaders in Delhi, Karnataka, Tamil Nadu, Bihar, Manipur, Telangana, J&K, Uttar Pradesh, and Goa before government formation. By contrast, cases against BJP leaders are almost non-existent or have been put on a backburner where an accused has joined the BJP. 

Despite its strong provisions, the ED has secured only 23 convictions out of 54,422 cases filed under the PMLA since it came into effect. That is a mere 0.004 per cent. Yet the number of cases filed by ED under PMLA, and FEMA has increased nearly seven times since the BJP came to power. The Opposition has used these figures to allege that the law does less to put money launderers in jail than to harass those accused under its provisions.

Moreover, accusations of money-laundering harm political leaders, their parties and state governments by painting them as corrupt. The ED’s daily leaks to the media play out in screaming headlines such as “X questioned for 27 hours in three straight days” and “marathon questioning of Y continues”. This damages the image of someone like Sonia and Rahul Gandhi, known for their public decency or Mamata Banerjee, whose simplicity is iconic or Kejriwal, who contests on an anti-corruption platform. This can effectively thwart the emergence of an alternative political leadership in the country, even if that is not the ED’s objective.

Although its operations sap the energy of the Opposition and create doubts about its integrity, Opposition leaders cannot easily come together to fight on this issue. Nobody wants to be seen as defending anyone else’s alleged or actual corruption.