How the ED became a political tool

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THE MAHARASHTRA ASSEMBLY  ELECTION in October 2019 was dramatic. The Bharatiya Janata Party had returned to power at the centre in a massive victory, a few months earlier, and was hoping to see similar success in the various state assembly elections. The Shiv Sena, a regionalist Maratha party, was its oldest ally in Maharashtra, but the two parties were at loggerheads over a number of issues, including the distribution of seats, the  hief-ministerial candidate  and the power-sharing  agreement  in the state. Eventually, the Shiv Sena reached out to the Congress and the Nationalist Congress Party, among other parties, to form a new coalition called the Maha Vikas Aghadi. The BJP saw the move as a betrayal and accused the Shiv Sena of abandoning  its traditional ally for the sake of power. Nevertheless, the MVA was able to finally form a government  in the teeth of political chaos.

The drama was, however, far from over. The government  collapsed, in June 2022, after about forty Shiv Sena MLAs rebelled and joined forces with the BJP. Eknath Shinde, the leader of the rebel faction, eventually took over as chief minister, sparking outrage among politicians from the NCP and the Congress, who made some startling claims. They said that many members of the MVA were asked to support  the BJP or face action from investigative agencies.

One of these agencies was the Directorate of Enforcement-the powerful law enforcement body that investigates financial crimes and money laundering-whose current head is Sanjay Kumar Mishra. A few days before the fall of the MVA government, the Shiv Sena MP Sanjay Raut claimed that the rebel MLAs had received ED notices and that the BJP had been using the agency to pressure them into switching  sides.

On 8 February 2022, Raut wrote to the vice-president, Venkaiah Naidu, urging him to take action. "Ever since Shiv Sena parted ways with the BJP in the state of Maharashtra, we find Shiv Sena MP/ leaders being systematically targeted  by using law agencies such as the Enforcement Directorate,"

he wrote, adding that ED personnel "are leaving no stones [unturned] to intimidate/harass our  legislators, MPs, political leaders as well as their relatives, friends and acquaintances." He stated that the agencies were being used to bring down a democratically elected government. Raut alleged that even Shinde was under the ED's radar.

"About a month ago, I was approached  by certain people and was told to assist them in toppling the state government  of Maharashtra,"

 Rautwrote. "They wanted  me to be instrumental in such endeavour so that the state could be forced into midterm  election." He said that he was warned  that if he did not help, he would be "paying a very heavy price." That same month, the ED arrested the NCP leader Nawab Malik in a money-laundering case.

On 3 July, as the Eknath  Shinde government tried to get its candidate for speaker elected, the opposition erupted in the Maharashtra assembly. They chanted  "ED! ED!" while Yamini Yashwant Jadhav-an MLA who had switched over to the Shinde camp and whose husband  had an ED case filed against him recently-registered her head-count in the vote. The BJP leader and former chief minister Devendra Fadnavis, who had just become deputy chief minister, was glib about it the next day. "I had once said that I'll come back," he said. "I've come back today and brought  [Shinde]  along with me. I won't take revenge on people who mocked me. I'll forgive them, everything isn't taken to heart in politics." The rebel MLAs, he added, "came because of ED-Eknath and Devendra."

A month later, the ED arrested Raut. He is currently on bail, after having spent over three months in jail. The Maharashtra Housing and Development Authority had filed a police complaint against Raut's associate for alleged financial irregularities in the redevelopment of Mumbai's Patra chaw!. A special court deemed Raut's arrest illegal, stating the ED had used "extreme and exceptional power of effecting arrest which ought to have been used very very sparingly." The judge, MG Deshpande, also said that the MHADA's move to file a complaint against Raut and others "one fine morning can neither throw dust in the eyes of the court nor can brush of and wash out long civil litigations." The court further  criticised the "pick and choose strategies of the agencies." The judgement noted that the main accused in the case, including MHADA staff, were not arrested.

The Bombay High Court has also criticised the vindictive nature of the ED's handling of cases. In January 2021, it was hearing  a plea for interim protection by Eknath Khadse, who quit the BJP and joined the NCP in 2020. "We are always of the belief that the judiciary  and agencies like the RBI, CBI, ED should act independently and impartially," the bench said. "There is a threat  to the very democracy if these agencies do not act independently."

The allegations of tampering with democratically elected governments did not just come from Maharashtra. Several politicians and lawyers I spoke to said that the ED was targeting political opponents of the BJP in various states, including Jharkhand, Chhattisgarh, Karnataka, West Bengal, Goa, Kerala and Jammu  and Kashmir.

"Why is the ED not going to As- sam, Gujarat, Uttar Pradesh, Uttarakhand, Haryana  or Madhya Pradesh?" Bhupesh Baghel, the chief minister  of Chhattisgarh, asked me. "Are there no corruption cases in these states?

Did corruption end when BJP came to power in these states?" Chhattisgarh is scheduled  for elections later this year. The ED is currently investigating two cases in the state, allegedly involving Congress leaders, bureaucrats and businessmen: one on an alleged illegal levy imposed on transporting coal, and another on alleged illicit liquor trade. "The ED officers have come to the state with their family, because they know they have to be here till the next Lok Sabha," Baghel said. "So, the intention is not to end corruption, but to end the opposition."

Over fifty officers from Chhattisgarh's department of excise, including the excise commissioner, accused the ED of torture and threats during the course of its investigation into the alleged Rs.2,000 crore liquor scam. One complainant  wrote that, during interrogations, "cries were continuously coming and clearly audible" to every one present. An owner of a distillery was "beaten mercilessly" and was told to write some names in his statement, the letter said. The officers complained that their family members were also physically abused and threatened into signing blank pages or pages with typed text without  reading them. One complainant  said that he was interrogated for 19 hours, and "the questions and answers which were not as per the wishes of the officers of the Directorate were deleted." The officers also accused the ED of forcing them to name Baghel and other senior officials of the state government.

The Chhattisgarh government brought these complaints  to the Supreme Court in a petition, arguing that the ED was acting at the behest of its political masters and that the investigation was "completely biased" and premeditated to destabilise  it. In its judgment  in the case, in May 2023, the Supreme Court bench warned  the ED to not "create an atmosphere  of fear" and that "even a bonafide cause becomes suspect when you behave like this."

"The ED has become very autocratic," Baghel told me. "Regarding  the ED cases being probed in Chhattisgarh, if they have the documentary evidence, let them arrest and question. There is no problem in that." Instead, he said, "they are beating up, torturing people, not letting them sleep at night and not providing them food and water."

Thomas Isaac, a former finance minister of Kerala, told me that there "is an attempt to subvert the functioning of the government in Kerala." He said that the BJP "cannot buy MLAs here like in the rest of the country today, so the only way is to destabilise the government through  these means that they are attempting." The ED is investigating Isaac in a case related to the Kerala Infrastructure  Investment Fund Board. The case was registered  against the KIIFB in 2021, for issuing masala bonds-bonds issued outside India by Indian  entities and denominated  in rupees instead of the local currency and for allegedly violating the Foreign Exchange Management  Act.

Isaac called the case a "fishing and roving" expedition, meant to destroy the credibility of a well-functioning government organisation. In February 2023, the Reserve Bank of India informed the Kerala High Court that it had issued a no-objection certificate to the KIIFB to issue the bonds, in 2018. Even Kerala's opposition leader, the Congress's VD Satheeshan-who disagrees with the current government's policy of external borrowing by the KIIFB-opposed the ED's investigation. "After one-and-a-half years, when the high court asks, they don't know what the charges are," Isaac told me in September 2022. "What they are looking for?" He added that the ED is functioning as an "out and out political arm, engaging in political activities like subverting governments, harassing and threatening people."

There has been a fourfold increase in ED cases against political leaders-ninety-five percent of whom are from opposition parties-since the Narendra  Modi government  came to power, in 2014. Among the 121 politicians probed by the ED in the past nine years, 115 are from the opposition, including 24 from the Congress, 19 from the Trinamool Congress, ll  from the NCP and eight from the Shiv Sena. According to data released by the finance ministry in response  to a question in parliament, the ED carried out 3,010 raids between  2014 and 2022, as opposed to ll2 over the previous decade.

Meanwhile, the ED has displayed minimal interest in investigating cases that are inconvenient to the government, particularly in BJP-ruled states. Investigations against several leaders appear to have come to a standstill ever since they joined the BJP. "Since I joined the BJP, I have been sleeping peacefully," Harshvardhan Patil, a Maharashtra politician, declared in October 2021. "There is no enquiry, nothing." Patil, a former minister from the Congress, was under investigation by the Anti-Corruption Bureau for alleged misappropriation of funds from a district cooperative bank. The investigation had been initiated, in 2014, by the Fadnavis government.  Patil joined the BJP just before the 2019 assembly election. Despite the alleged misappropriation of over a hundred crore rupees of public funds, the ED has not yet registered  a case.

 "The ruling party buys lawmakers for hundreds of crores and yet members of the Opposition represent  95 percent of lawmakers under investigation by the ED," the Trinamool Congress MP Mahua Moitra said in the Lok Sabha, in December 2022. By March this year, 14 political parties came together and moved the Supreme Court against the "arbitrary use" of government  agencies to "crush political dissent and upend the fundamental premises of a representative democracy." They argued that a pernicious  pattern was being followed, in which the ED would move in to arrest the defendant  immediately after they got bail  from the Central Bureau oflnvestigation. The court rejected the petition, claiming politicians could not claim "higher immunity" than citizens.

It can, of course, be nobody's case that there is no corruption or money-laundering among politicians from opposition parties. But it is the arbitrary  implementation of laws, timed to suit major political developments or elections, and the stalling of cases against those who switch allegiance to the BJP that have raised serious questions about the credibility  and functioning of the agency.

THE  ED IS  MEANT TO  PLAY  a significant  role in ensuring compliance with India's economic laws, combating money-laundering and safeguarding the integrity of India's financial system. Among the laws it is responsible  for enforcing are the Foreign Exchange Management Act, the Fugitive Economic Offenders Act and the Prevention of Money Laundering Act. The agency operates under the finance ministry and has broad powers to conduct investigations and raids, issue summons, freeze assets and initiate legal proceedings. It works in close coordination with other law enforcement  agencies, such as the CBI, the National Investigation Agency and state police forces. Once one of these agencies register a predicate offence-the underlying  criminal activity that generates  illicit funds or assets - the ED initiates its investigation into the "proceeds  of crime" derived from that offence. The ED also plays a crucial role in international cooperation and coordination, working with foreign agencies and governments to exchange information and facilitate the investigation and prosecution of cross-border financial crimes.

According to its website, the agency considers impartiality to be one of its core values, aiming to "be fair and reasonable  in investigations," to "take decisions without fear or favour" and to "act without malice, prejudice or bias, and not allow the abuse of power." But a major criticism against the ED and other investigative agencies has always been the reluctance to act against those in power. Under the Modi government, this has only worsened. The organisation's powers have been widened, thanks  to a series of amendments  to the PMLA, while safeguards  have been whittled down.

The PMLA, as it stands now, deviates from India's established criminal jurisprudence. Unlike the CBI and police, which are constrained by regulations laid out in the Code of Criminal Procedure, the ED, for the most part, has unchecked  powers. Statements made before ED officers can be admitted as evidence in court. While other agencies, including the NIA, upload most of their first-information reports and the status of investigations and trials on their websites, only curated information on ED cases comes out into the public domain, in the form of press releases and selective leaks to the media.

The fundamental tenet of presumption of innocence until proven guilty-considered  the bedrock of the judicial system-is reversed, with the onus on the defendant  to prove themselves not guilty. "Inherently, there are huge defects in the law that we should be ashamed of," Tanveer Ahmed Mir, a senior lawyer handling ED cases, told me. "Here, you have a law which says, 'I will register a case, then I will immediately arrest you, but I will not tell you what I have arrested you for."'

Unlike FIRs, the Enforcement  Case Information Report is considered  an internal document, and access to ECIRs is restricted. The ED does not need to furnish  a case diary, as the police does in its investigations. It is not mandated to seek permission from state governments before pursuing a case within the state. For all intents and purposes, the ED is a black box, functioning with little regulatory  oversight. With the new amendments, magisterial  oversight is no longer mandatory-cases can be referred  to an "adjudicating authority," a body of experts from different  fields appointed by the central government.

"The adjudicating authority functions like the mouthpiece of the ED," Tarannum Cheema, an advocate handling ED cases, told me. Defendants are faced with limited legal recourse. They can challenge the adjudicating authority's order before an appellate tribunal, but this had been non-functional without a chairperson or members since August 2019. The government  was directed by the Supreme Court in July 2022  t0 fill the vacancies.

In its response  to a list of questions I sent, the ED said, "At the outset, it is stated that invariably, in all the cases, criminal investigation conducted by ED is presented  before the judicial authorities at every stage. Therefore, various unsubstantiated allegations made by interested  parties and also brought forth by you in the form of questions are diversionary tactics to divert attention from the offences committed by them and to create factual and legal facade."

According to the agency's website, the adjudicating authority has confirmed more than sixteen hundred  provisional property attachments, totaling 71,290 crore, that were issued by the ED since 2005. However, in response to a right-to-information query, the adjudicating authority revealed that, as of March 2020, it had dismissed only three provisional attachment orders issued by the ED.

Out of approximately  six thousand ECIRs filed by the ED, the agency has initiated prosecution complaints or charge sheets in only around a thousand  cases. The agency asserts a conviction rate of 96 percent, citing convictions in 24 out of 25 cases that have gone to trial since the implementation of the PMLA-but this amounts to less than half a percent of the ECIRs filed. According to an Indian  Revenue Service officer, who has worked with the ED, the agency tends to file charge sheets running to thousands  of pages "in a deliberate  attempt to delay trials." Punishment can be imprisonment for three  to seven years along with a fine.

"I believe about ninety-five to ninety-eight percent cases currently being probed by the ED today will be dropped in the next ten to fifteen years," the IRS officer said, "because there is no investigation happening  on the money trail." The officer explained  that a proper investigative procedure would require a "lot of time and energy to study the bank records and company accounts carefully and track where the money flowed." Instead of this, the officer said, in most cases, officers obtain a list of properties owned by the accused and attach properties worth the amount allegedly involved, without  establishing a clear connection between the seized properties and the proceeds of the crime-including ancestral properties acquired years before the case was registered. To my question on this allegation, the ED responded  that "attachments made by ED are provisional in nature and subject to confirmation by quasi-judicial Authority which is Adjudication Authority. These provisional attachments are made after adhering to the legal provisions which you have unfortunately failed to understand."

During the tenure of the current  director, SK Mishra, and his predecessor, Karna! Singh, the ED has been pushed further outside any regulatory over-sight. Since Mishra took over, in 2018, the ED's focus on high-profile political cases involving important opposition leaders became more intense. He has been given multiple extensions by the Modi government. "He is known to be manageable," a politician from Gujarat told me. "His reputation was that he was not a judicious officer but was someone who would listen to whoever was in power. This government gives extensions to people who listen to them." The central government enjoys absolute control over the ED's functioning, which goes against the principles of federalism outlined in the Constitution regarding the enforcement of law and order.

The ED is now used as a tool  to go after anyone or any entity the government sees as a threat, including media houses, NGOs and businesses. In the past decade, the ED has constantly been in the limelight, conducting flashy raids and dramatic  arrests. "There is no evidence or not even a predicate offence in most of these cases-they are creating predicate offences," a lawyer handling  the ED cases of several opposition leaders, told me. "A target is identified, some flimsy cases are made, then pliable witnesses are found or witnesses are threatened by saying that 'either you give the statement or you will also be made an accused."'

In May, an open letter signed by over five hundred  citizens, including civil-rights activists, women's groups, students and academics, denounced  the misuse of the PMLA against scholars and activists, demanding  the agency stop "witch hunts." The letter pointed to the specific targeting of women. "All of these women, whom we cannot name because of the threat  of further harassment, who are being questioned have worked tirelessly on substantive issues of national importance that matter to a vast majority of our people-food security, accountable and transparent governance, peace and harmony, informed  citizenship, farmers rights, women's issues and so on," the letter stated. "Under the Act, the state is relieved of all responsibility  for observing the principles of natural justice, fair trial, due process, protocols  for women, and human rights."

Apart from raids that could last for days and repeated demands  for documents, the ED's practice of seizing phones and computers is a major grievance  for several accused and lawyers handling  ED cases. "Unlike the income tax officers, who extract data from devices during the raids and allow businesses  to continue their operations, the ED officers grab all devices during the raids and they are retained-like, forever," a digital-forensics expert, who has been a consultant for both the IT department and the ED, told me.

Meanwhile, since Modi came to power, cases of bank fraud have increased fourfold. The Reserve Bank oflndia reported that, during the first seven financial years under the Modi government, banks suffered  losses of about <6 lakh crore in nearly three  hundred thousand  fraud cases, while the recovery rate was about ten percent. The ED is not investigating the Adani Group, which faces serious allega- tions of stock price manipulation and corporate fraud. In the coal levy case in Chhattisgarh, Baghel told me, he had heard Adani's name come up in the investigation, but the ED did not investigate the group. In a March 2023 press conference, the Chhattisgarh Congress alleged that the two businessmen  who were arrested, Suryakant Tiwari and Joginder  Singh, had been workin with Adani for four years. "They made profit to the tune of IO0 core, which was routed through  hawala to Adani," Aijaz Dhebar, the mayor of Raipur, said in the press conference. In May, the ED arrested Dhebar's elder brother in an alleged money laundering case linked to the liquor scam.

According to various whistle blowers, complainants  and activists involved in cases currently under investigation, the ED's lack of interest  in pursuing  cases involving serious offences that entail significant  amounts of public money and have substantial evidence is concerning. Some have raised these issues with the prime minister's office, the ministries of finance and corporate affairs, and other regulatory  agencies, but with limited success. Several lawyers who handle ED cases told me that the agency selectively chooses which cases to prioritise, and there are allegations of arbitrary implementation of the law. As a consequence, major bank fraud cases are either neglected or ignored. At a press conference  in Washington in October 2022, the finance minister, Nirmala Sitharaman, dismissed  allegations regarding  misuse of the agency, saying the ED is "completely independent in what it does."

In its response  to my questions, the ED stated questions on the collapse of the MVA government, targeting of opposition leaders, the stalling of cases against BJP leaders, and allegations of torture were "some hypothetical questions" that "require  no response from ED." To questions about how ED carries out its investigations, the agency responded  "reply to some questions cannot be given considering  the sanctity of the investigation and judicial proceedings."

"The questionnaire also indicates selective targeting, bias and lack of basic understanding of anti-money laundering investigation which gets accentuated by the inferences drawn by you on wrong facts," it stated. "There are various questions, which seem to be planted by vested interests through  you and answering these questions would reveal crucial information on ongoing sensitive investigation being conducted by ED which are otherwise not available in public domain."

For it to demonstrate the impartiality it claims to be committed to, the ED would need the finance ministry and officials within the agency, including the director, to possess the capacity to resist political pressure. The misuse of investigative and regulatory  agencies harms public interest and has damaging consequences  for society. "I would say that political misuse of investigative and regulatory agencies is damaging  for even the political formations that use them," the former cabinet secretary KM Chandrashekar told me. "Firstly, this is a game that two can play, and it is presumptuous to think  that the existing political configuration will continue forever. Secondly, a lesson should be learnt from the Emergency. Excessive use of agencies and the law against rivals will only encourage them to sink their differences and come together."

Chandrashekar added that "while political use of agencies may be limited to a few institutions or individuals, it will give unbridled  license to lower-level bureaucracy to harass others, both individuals and institutions, leading to uncertainty, fear and corruption." Yet, there have always been officers known for acting with uprightness and making efforts to defy such misuse, and those who sought to benefit from it.

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THE  ED ROSE TO PROMINENCE  during the 1980s, under the Rajiv Gandhi government, in which VP Singh headed the finance ministry. India had initiated a few deregulation measures  that boosted industrial production. Under Singh, the aim was to ostensibly go after large-scale  offenders  and industries with high concentrations of black money. The ED director at the time, Bhure Lal, was known  for cracking down on corporate  tax-evaders. Several big names in the corporate  sector, including Reliance, Tata, Bajaj and RP Goenka, came under  the scrutiny  of various  agencies probing economic offences. There was mounting  pressure on the government to tone down action against  industrialists. Singh defended  the raids, stating that the public had the right to know about the misuse of public money. Despite criticism against him for sending shock waves into the business  community, tax receipts  increased significantly due to the crackdown  on tax evaders.

There were reports of disagreements between Gandhi and Singh. "In the case of the Foreign Exchange Regulations Act, the Finance Ministry and the prime minister's office were at loggerheads," India Today reported in February  1987. "While the Finance  Ministry was opposed  to any dilution of the rules under this law, the prime minister's office favoured a total scrapping of the act." In 1987, at the height of Singh's campaign  against high-profile tax evaders, Gandhi moved him to the post of defence minister. Singh later resigned  over the Bofors Scandal, in which Gandhi was allegedly involved. Lal was transferred to the post of joint secretary, notes and currency.

During the 1989 general election, a politically sensitive case emerged, involving high-ranking ED officers who had allegedly colluded with  the accused. This case implicated  two ministers and involved forgery and illegal money transfers to St Kitts, a tax haven in the Caribbean. The director, KL Verma, and his deputy, AP Nanday, were accused of assisting in fabricating evidence in a FERA case against Singh's son Ajeya. By then, Singh had assumed  leadership  of the Janata Dal and emerged  as Gandhi's primary opponent.

Ajeya waived the rights of bank secrecy and immunity  to open the original records of his account for scrutiny. There were several discrepancies in the alleged documentary evidence, including payments made on weekends and holidays, when, according to established  banking  practice, no transactions take place. But the ED wasted no time issuing a notice threatening to raid and arrest him.

Despite the scandal, Singh was elected prime minister. The case was handed  over to the CBI. According to its findings, the Congress leader and former minister  of external affairs PV Narasimha Rao, the former minister  of state KK Tewari, the godman Chandraswami and his private secretary were involved in forging documents that purportedly showed an illegal account with Ajeya as the holder and his father as the beneficiary, with a deposit of $21 million. However, the case faced delays, with successive government changes, and eventually fell apart due to a lack of evidence.

The 1990s were a heady time for the Indian  economy. As finance minister in the Narasimha Rao government, Manmohan Singh introduced reforms to liberalise  the economy. "In the early days of reforms, the government wanted  to ease the transactional impediments," Javid Chowdhury, a former revenue secretary and former ED director, writes in his memoir The Insider's View. "An unspoken  message went out to the law enforcement that they should not come in the way of trade and business. The enforcement of economic laws would certainly have slowed down the corporates, but that would not have been to the detriment of public interest."

The period witnessed a surge in commercial and corporate  crimes, posing a new challenge  for law enforcement agencies. According to Chowdhury, these agencies had limited expertise in investigating economic crimes of this nature. The ED had few investigators who possessed  the necessary  skills to "intelligently  read a company's annual accounts." Instead, the focus tended  to be on seizing cash and foreign exchange during curb-side  transactions.

Hawala operations-an illegal system of money transfer without using traditional banking channels-became rampant.  The Jain hawala case was a major political and financial scandal. It involved allegations of illegal money transfers and corruption among prominent politicians and business-men. The case came to light, in 1991, when the CBI seized a diary belonging to a hawala operator. The Jain diary contained  records oflarge payments made to various prominent  politicians and bureaucrats. The alleged payments were believed to be part of a larger corruption network  involving kickbacks, bribes and illegal campaign  financing.

The scandal led to a political uproar, and multiple investigations were initiated. The ED stepped  in after the CBI's investigation into the case revealed documents  and accounts related to infringement of foreign-exchange regulations. "The principal recovery during the searches was a set of detailed hawala accounts totalling about 65 crores," Chowdhury  writes. It was one of his prime investigations during his tenure  as director. "The rogues' gallery included sixty-two politicians and eighteen government  servants." The accounts recorded between 1989 and 1991 were allegedly linked to several political leaders, including LK Advani, Madhavrao  Scindia, Kamal Nath, Arjun Singh and Sharad Yadav. Rao later faced the criticism of using the case to "fix" political opponents, including those from his own party.

The investigation revealed that the funds received through  hawala were not bribes or a quid pro quo for anything in particular-many politicians were not in power when the alleged transactions happened. "These were merely gifts, a far-sighted investment in goodwill made by the Jain family," Chowdhury writes. The Jain brothers were intermediaries facilitating companies in obtaining  major contracts for power projects. The clients paid for services through  foreign accounts, which were transferred to the country through hawala networks.

The case faced legal complexities, with conflicting burdens  of proof under different  laws. Evidence was difficult to produce, and there were discrepancies  in bank records and cash transactions. "There was evidence scattered all over the place, but there was nothing that could be properly established  in a court oflaw," MR Sivaraman, who was the revenue secretary at the time, told me. "That was the tragedy of the case."

MK Bezbaruah  took over as director in 1995. He continued the probe into the Jain hawala case, while also initiating other investigations that brought him into confrontation with politicians and media barons. There were several unsuccessful attempts to remove Bezbaruah  from his post until the Atal Bihari Vajpayee government  issued an order to transfer  him, in August 1998. Sahib Singh Verma, the chief minister of Delhi at the time, requested the centre to name Bezbaruah as the new head of the Delhi transport department, which, he said, needed an "upright officer." Advani, who had resigned from parliament when his name came up in the Jain diary before being re-elected, two years later, and taking over the ministry  of home affairs, approved the request the same evening.

"What occasioned this transfer at this moment?" a Supreme Court bench hearing an ED case asked, two weeks later. "What is the urgency? No other person could be found in the whole country  to run Delhi's transport system?" An officer who worked at the ED at the time told me that "Bezbaruah  was removed because he was going against all politicians, irrespective of who it was. He was quite independent and a very honest officer." Bezbaruah  was reinstated but it did not last long, because of an earlier Supreme Court judgment  that mandated  the ED head must hold an additional secretary rank. Bezbaruah, however, was of the joint-secretary rank. This is how "they removed him," the former ED officer, said.

Now, the approach seems to be, "find the right person and give him a lengthy tenure," he said. He was referring  to the extensions given to SK Mishra, who will soon complete five years as director.

AT A CONVENTION held in Vienna in 1988, the United Nations defined money-laundering as the "process of concealing or disguising the illicit origin of property derived from any criminal  offense, with the intention to evade legal consequences." Money-laundering was identified as a three-stage process: placement, which involves moving funds away from direct association with the crime; layering, which aims to obscure the money trail to hinder detection; and integration, which involves merging the illicit funds with legitimate sources.

As a party to international conventions such as the one adopted in Vienna, India was obligated to criminalise  offences related to money-laundering and to address transnational organised  crime. In 2003, India applied to become a member of the Financial Action Task Force and amended  the PMLA to comply with FATF standards, eventually gaining membership  in 2010. Joining  the FATF provided access to real-time information exchange on money-laundering and terror-financing, as well as diplomatic support  against terrorism. Countries listed as "high-risk jurisdictions" on the FATF blacklist or under "increased  monitoring" on the grey list face international economic and financial restrictions and sanctions. Additionally, they may be ineligible for financial aid from organisations such as the International Monetary Fund, the World Bank, the Asian Development Bank and the European  Union.

The PMLA was introduced in 2002. While it was being debated in the Rajya Sabha, a select committee was set up to look at it. According to a retired senior ED officer who assisted the committee, some of the members pointed out that this act would always have the potential to be misused by the party in power and advised the government not to make it too hard line. "They wanted  to make it more stringent, but eventually it was watered down a little," the officer told me. The PMLA came into effect in 2005.

"As revenue secretary, I was one of the architects of the PMLA, where we strove to achieve a balance between  the requirements of dealing with the humongous  black-money problem and the avoidance of bureaucratic overreach," KM Chandrashekar said. The PMLA was meant to be a strong law, but it had limitations: its jurisdiction started only after another agency or court established reasonable  suspicion of a crime, and its focus was limited to specific offences listed in the act that had to do with narcotics, arms and wildlife protections, among others. "The ED had no suo motu power," Chandrashekar said.

Over the years, various amendments to the PMLA have expanded  the ED's jurisdiction, giving it more teeth and weakening checks and balances. The dilution of safeguards began with the 2009 amendment, which introduced the provision for immediate attachment of property involved in money-laundering-removing the requirement that the person be charged with money-laundering before their property was attached. The amendment also diluted conditions to file a prosecution  complaint in the predicate offence before the ED could conduct search-and-seizure operations-this was completely done away with in 2019. Instead, the ED could simply forward  a report to a magistrate and proceed based on the satisfaction of the adjudicating authority.

In 2012, the Manmohan  Singh government, with  P Chidambaram as finance minister, brought  nonprofit organisations under the purview of the act, expanding its scope beyond financial institutions. It removed the threshold of crimes involving money over 30 lakh. The amendment also broadened the definition of money-laundering by including the possession of proceeds of crime, which meant that even individuals unaware  of the underlying  crime could be prosecuted under the act, with punishments ranging  from three  to seven years. With the monetary threshold gone, this could even be for a paltry sum.

Arun Jaitley, who had previously criticised stringent bail conditions for economic offences as leader of the opposition in the Rajya Sabha, brought in several stringent provisions to the PMLA through  various amendments -  introduced as money bills, which do not require  the assent of the Rajya Sabha - once he became finance minister. Terming  the bail provisions  in the Customs Act as "disproportionate," Jaitley had said, in 2013, "You don't need a hammer  to kill a fly." It is worth noting that, until 2015, all amendments to the PMLA were passed after discussions  in parliament.

In 2018, Jaitley introduced an amendment that revived the twin conditions  for bail, requiring courts to grant  bail only if they are convinced that the accused is innocent  and unlikely to commit a similar offence while out on bail. The year before, the Supreme Court had declared that these conditions violated constitutional guarantees such as the protection of life and liberty, and equality before the law. The twin conditions  had previously applied only to scheduled  offences that carried imprisonment of more than  three years, but the amendment made them applicable to all offences under the PMLA. "The teeth of the attack on the political opposition is based on the strict bail requirements in the PMLA," Shadan Farasat, an advocate in the Supreme Court, told me.

A 2019  amendment further limited oversight, placing the supervision  of the ED under the executive-contradicting the principles of the rule of law and the right to a fair trial. It also introduced retrospective implementation of the PMLA, which  raised serious constitutional concerns. P Chidambaram's son Karti, who has been charged  under the act, filed a review petition against a Supreme Court verdict upholding  the amendments, in which he argued  that retrospective application would mean that "an act committed even 100 years ago can be resurrected and the person concerned  can be accused of money laundering."

The Supreme Court verdict, passed on 27 July 2022,  had accepted the government's argument that it could not be said that "presumption of innocence  is a constitutional guarantee." According to Karti, the judgment, while stating that it does not address the fundamental issue of whether amendments to the PMLA can be made through  finance bills, interpreted the provisions  of the PMLA that were made through  these amendments. Petitions challenging amendments made through  finance bills are currently pending before a seven-member  bench of the Supreme Court.

The ruling also stated that because ED officers investigating these cases are not considered  police officers, they are outside the purview  of the Code of Criminal  Procedure. The bench concluded that it is sufficient  for the ED to disclose the grounds  of arrest at the time of the arrest  and that it is the responsibility of special courts to examine the relevant evidence and decide on the need for continued detention. The former Supreme Court justice Madan B Lokur said in an interview following the verdict that the court "seems to be accepting what the executive wants it to accept." He said that an impression has been created  that "the court is partial to the government."

The PMLA contains a provision for officers indulging in "vexatious searches" or making unjustified  arrests, to be imprisoned or fined. But the existence of this provision makes no difference when it comes to holding ED officers to account. "It has never happened  as far as I know," Tanveer Ahmed Mir, who has been handling  ED cases for over two decades, told me. "The system of legal damages or punitive damages is non-existent in India. We don't work like countries such as the US, France or UK where  for a failed prosecution the state will be sued. Here suing an investigating officer or the agency or the state is the last thing anybody who gets prosecuted ever wants to do in their life. Because you don't know how long you'll  have to keep pursuing it."

3

WHILE CAMPAIGNING  for the 2014 general election, Narendra  Modi promised  to bring back every paisa of black money stashed  abroad and deposit some percentage of it in the bank accounts of poor citizens as a "gift." Once he came to power, he made a big show of fighting corruption and black money.

The drastic move to demonetise Rs.500 and Rs.1,000 currency  notes in 2016 - touted by a master stroke to wipe out black money and curb tax evasion - turned  out to be a futile exercise. The Reserve Bank oflndia said that 99.3 percent  of the of 15.44  lakh crore in circulation came back into the banking system. Opposition leaders estimated that over a hundred people lost their lives as a direct result of this drastic policy. Even as millions across India were queuing up outside banks and ATMs to exchange  or deposit demonetised currencies and withdraw money, several senior BJP leaders spent exorbitantly on weddings.

On 4 December  2016, the union ministers Rajnath Singh and Venkaiah Naidu; the BJP president  at the time, Amit Shah; and the RSS chief, Mohan Bhagwat; and then chief minister  of Maharashtra Fadnavis, attended the wedding of the union minister Ni tin Gadkari's daughter. This was soon after the government's announcement that, for conducting weddings, the bride or groom or their parents would be allowed to withdraw only up to 2.5 lakh cash from their bank accounts. Despite this, several crores were spent for the wedding, according to the Hindustan Times, with  fifty chartered planes being used to ferry guests. Similarly, the expenditure for the wedding of the businessman and BJP politician Gali Janardhana Reddy's daughter  was estimated  to be 550 crore.

In letters addressed  to Modi and Karna! Singh, EAS Sarma, a former revenue secretary, raised concerns  about the lavishness  with which Janardhana Reddy and the union minister  Mahesh Sharma celebrated weddings  in their families. "Either  they had unaccounted hoarded  cash or they have received undue favours from some business houses and contractors," he wrote. "These weddings would not have been celebrated  without  the deployment oflarge amounts  of cash, which the common man/ woman on the street is finding it difficult  to raise in view of the numerous  restrictions imposed by the Finance  Ministry and also the shortage of cash that prevails across the country." Sanna told me the prime minister's office and the ED did not respond  to him. "I have brought several cases of possible money-laundering to the notice of the ED, but it is doubtful whether the ED has either the time or inclination to investigate them as it seems to be devoting most of its time to cases taken up under political pressure," Sarma said. Though the income tax department initiated investigations against Reddy-who has since left the BJP-its status is unknown.

After demonetisation, the income tax department referred about four hundred cases of corruption and money-laundering to the ED and the CBI for further investigation. So far, according to the finance ministry, the ED has filed prosecution complaints related to demonetisation in only 13 cases. Several regional leaders and supporters of the BJP were caught with wads of cash during this time, but the ED appears to have missed these. Serious allegations of disproportionate assets and corruption against several BJP leaders, including Gadkari, Reddy, BS Yedi yurappa and Ramesh Pokhriyal, have not resulted in any substantial outcome.

The Modi years have seen the country declaring the highest number of economic fugitives. In March 2016, the Indian  business man Vijay Mallya fled the country  while engaging in negotiations with  a consortium, led by the State Bank oflndia, to settle his debts, which amounted  to 9,000 crore. Mallya became the first person  to be declared  a fugitive economic offender by a PMLA court. Questions were also raised about the role of the minister of external affairs at the time, Sushma Swaraj, and the then chief minister ofRajasthan, Vasundhara Raje, in enabling Lalit Modi's flight to the United Kingdom. By December 2021, the central government informed  parliament that 33 accused in bank fraud cases registered by the CBI had fled the country  in the last five years.

According to Bhagwat Ka rad, a minister  of state for finance, the ED registered around  515 fraud cases between  May 2017 and December 2022. These included cases involving wilful defaulters  under the PMLA. But the agency did not act until the emergence of two major bank fraud cases: the alleged scams involving Mehul Choksi and Nirav  Modi for 13,000 crore, and the alleged fraud of 23,000 crore involving ABG Shipyard, owned by Rishi Agarwal. The way the ED handled these cases was illustrative of how it has been handling bank frauds involving crores of public money. Moreover, in several cases, investigations have not moved in India even when documentary evidence provided by legal officers and investigative agencies abroad has been examined  and approved by foreign courts, such as in the Louis Berger corruption case.

ON  7 MAY  2015,  Vaibhav Khurania, a Delhi-based  entrepreneur, sent a letter to Nilimesh Baruah, the director of the corporate affairs ministry's Serious Fraud Investigation Office, requesting an investigation into the fraudulent activities carried  out by Mehul Choksi, the chairperson and managing  director of the Geetanjali  Group. The following day, the letter reached  the headquarters of the ED, which was headed by Rajan Katoch at the time.

The letter stated that Mehul Choksi and his company Geetanjali Gems had defrauded  several investors  through  a "ponzi franchisee scheme." They would take money from investors promising to set up franchises but would later refuse to fulfil the agreements, leading to prolonged legal disputes. Khurania alleged that Choksi had defrauded  him of approximately 3 crore. He provided a list of 18 separate  complaints against Mehul Choksi and his Geetanjali Group, which included civil suits and police complaints  filed by individuals and companies  in various locations, including  Mumbai, Bengaluru  and Jodhpur. The letter stated that Choksi and his firms owed over 4000 crore to several public banks and expressed concern  that he intended  to flee the country with all his money. Khurania also requested  an investigation into the suspicious growth of Choksi's offshore companies. He also reminded  the agencies that, in 2013, the Securities and Exchange Board oflndia had suspended Choksi and 25 associated firms from trading  in the stock market as part of an investigation into suspected  manipulation of share prices.

Khurania had submitted his complaint to a police station in Delhi, that April, but the police failed to lodge an FIR. The Delhi Police filed an FIR only in July, after Khurania  successfully petitioned a chief metropolitan judge. "I never expected anything concrete  to come out of these complaints given to these agencies, including  SFIO, ED or the CBI," he told me. "We all gave numerous complains, but they didn't look into it. That is why I went to court. But, after that, nothing really happened. All the victims are disappointed in our justice system."

On 29 January 2018, the Punjab National Bank filed a police complaint against  Choksi and his nephew Nirav Modi, accusing them of fraud amounting to 281 crore. The CBI and ED initiated their probe in February. The next month, the estimated value of the scam had risen to 13,000 crore. However, Choksi, Modi and their  relatives had already fled the country. The two were accused of obtaining fraudulent letters of undertaking and loan agreements, and laundering money.

Gaston Brown, the prime minister of Antigua and Barbuda, which granted Choksi citizenship before discovering he was a fraudster, blamed India for approving  their documents. Choksi's extradition petitions and challenges  to the revocation of his citizenship are currently pending before an Antiguan  court, while Nirav Modi is currently imprisoned in a British jail.

In April 2018, Khurania told me the ED issued a show cause notice asking him and his firm to pay money they alleged he owed to Choksi. "We sent them a response," Khurania said. "After that I haven't heard  from them."

According to another complainant in the case against Choksi and Geetanjali  Gems, who did not want to be named, there is a sense of despair  and lack of confidence  in the government.  "There is no point in anything now," they told me. "The government doesn't  seem to have any intention to bring him back. It's useless. I have dealt with all agencies, including the CBI, CID and the ED. There is no clear intention  to bring him back." The complainant suggested that Choksi's wealth  and power have allowed him to evade accountability. "He has looted so much money from India, and everybody got their share. So, nobody is going to act against him." In their  reply to my questions, ED stated that it had "recovered  properties worth Rs More than 5000  crore and also restituted assets worth Rs. 1000 crore to public sector banks."

COMPLAINTS  AGAINST ABG SHIPYARD,  one of the country's largest ship building companies, were initially overlooked. In November 2019, the SBI filed a complaint  against  the Gujarat-based company and its directors, based on the findings of a forensic audit conducted  by Ernst  and Young, covering the period from 2012 to 2017. According to the SBI, the audit report revealed various  illegal activities, including misappropriation of funds, diverting them through  companies  registered in tax havens and criminal  breach of trust. Besides the founder of the ABG group Rishi Agarwal, the complaint  specifically named the executive  director, Santhanam Muthuswamy, and three  other directors, including Sushi! Kumar Agarwal.

The complaint  indicated  the biggest bank fraud case in the country so far, accusing the directors of defrauding 22,842 crore from an ICICI-led consortium of banks. The CBI did not initially register  an FIR, citing reasons such as the absence of specific instances of fund siphoning and a clear modus operandi  in defrauding the banks. The SBI filed a fresh complaint, in August 2020, but it took over a year and a half for the CBI to finally register a complaint, in February  2022. CBI cited "withdrawal of general consent" from various states as a reason for the delay in pursuing  the case. The ED began its probe after that.

During Modi's tenure  as chief minister, the Gujarat government disregarded warning signs regarding ABG Shipyard. This trend continued even after he became prime minister. In April 2014, the Controller and Auditor General revealed that the government-owned Gujarat Maritime Board had failed to recover R2 crore owed by ABG Shipyard for leasing land in Bharuch  district since 2006. The report  stated that the GMB did not take any action to suspend ABG's shipbuilding operations, as required  by the agreement. The Modi government had promised  to take action if the outstanding amount was not paid within the specified time limit. However, according to a 2019 report  prepared  by the Gujarat legislature's public accounts committee, no action had been taken by the BJP government in Gujarat.

While the Gujarat government  dragged its feet in taking action against the company, the ABG group was participant and investor in Modi's 2013 Vibrant Gujarat summit-often portrayed by Modi as one of his biggest achievements as chief minister. ABG Shipyard and other subsidiaries were among the companies with which the Gujarat government entered  into memorandums of undertaking worth thousands  of crores during the summits from 2013 to 2015."On the basis of MoUs which these companies signed with the Gujarat government, loans were sought from the banks," Shaktisinh Gohil, a Congress MP, told me.

Meanwhile, the ABG group was already facing another ED investigation based on a charge sheet filed by the Serious Fraud Investigation Office. The SFIO, which operates under the Ministry of Corporate Affairs, was looking into the irregularities at Infrastructure Leasing and Financial  Services-a state-funded infrastructure development and finance company. As part of their  investigation, the SFIO identified 13 loan accounts belonging to the ABG group, including personal  loans that were allegedly granted  without following due process. In the predicate offence registered by the CBI, the examination of the involvement of public officials was put on hold as the bureau awaited  permission  from the central government to prosecute  them. This delay in filing a charge  sheet resulted in Agarwal being granted  bail by the CBI special court handling the case. In his appeal for anticipatory bail in the ED case, Agarwal pointed  out that the agency had not arrested him during the course of the investigation. The ED had not initially named Agarwal as an accused in its ECIR and did not include him in the main prosecution complaint. However, he was later added to a supplementary prosecution complaint, as the Economic  Times reported.

Complainants and activists who were involved with  the ED's investigations into several cases shared  a sense of despair. "I met several senior ED officers, SEBI and other  investigative  agencies," one complainant told me, on condition of anonymity. "Sab jagah upar se order aaya hua hai"-Everyone has received orders from above. "This is how the system works."

WHEN JAITLEY  WAS  FINANCE  MINISTER, he often emphasised  the importance of cooperation with foreign governments and investigative agencies as a major step in tackling black money and money-laundering. Modi, too, raised this issue at international platforms and during his frequent  foreign visits. However, the reluctance to act in particular cases is evident.

The Louis Berger corruption case, which came to light in 2015, highlights a tendency of selectively targeting certain individuals  by cherry-picking details from documents  held by the ED and CBI. In July 2015, two former officials of Louis Berger, a US construction management company, pied guilty in a New Jersey court to bribing government officials in India to secure a project management consultancy contract for water supply projects in Assam and Goa. They revealed that Louis Berger and its partners had paid over R6 crore between 1998 and 2010 to "unnamed officials" in the state governments to secure the project. During this period, the Goa government was led by the Congress, except from 2000 to 2005, when the BJP, under Manohar  Parrikar, was in power. Similarly, the Assam governments were headed by the Congress and the Asam Gana Parishad.

A few days after  the corruption allegations surfaced, the BJP held a meeting in Delhi, which  Modi attended, and released  a booklet implicating Himanta Biswa Sarma, then a Congress leader who was the minister in charge  of the Guwahati Development Department, as a key suspect  in the Louis Berger case. The following month, Sarma joined  the BJP. During a press conference  in Guwahati, in April 2016, Amit Shah was asked about Sarma's alleged guilt. "I will not reply to this," Shah said. "This is not the way to put a question." Shah was appointed union home minister in 2019. No action has been taken against Sanna thus far. Meanwhile, in New Jersey, one former Louis Berger official was sentenced  to a year in prison, while the other received a two year probation and a $10,000 fine. Sarma became chief minister in 2021.

"It has been five years since the high court directed the CBI to investigate, but both CBI and ED have not done anything so far," Bhaben Handique, an activist and former member of the Assamese political party Raijor Dal, told me. "As a petitioner in the case, I had procured  documents from the FBI"-Federal Bureau of Investigation, the United State's security and intelligence service--"and had shared the same with  the CBI," he said. "But nothing has come out of this." While hearing Handique's petition, the Guwahati High Court said that the state police was acting in a partisan manner  and asked the CBI to investigate the case. The ED started its probe in 2015 but appears to have not taken any action since then. The BJP government in the state has, in the meantime, appointed  an enquiry  officer to probe the case.

Handique  pointed  out that the US court judgement  says that bribes have been paid, which means people in India have received this money. "Why has the CBI failed to find anybody involved in this so far?" he asked. "It is definitely because of political interference. If they arrest  the bureaucrats, the truth will come out."

In contrast to the slow progress  in the Assam case, the ED swiftly initiated an investigation in Goa after the corruption issue came to light. The agency filed a charge sheet in July 2018 against several accused, including former chief minister, Digambar Kamat, and former minister of public works, Churchill  Alemao. In July 2021, a special court ordered  the framing of charges  in the case. Kamat reportedly helped engineer  the defection of several Congress MLAs to the BJP, in September 2022. Alemao, who was also reported  to have helped with the defections, and joined the TMC in 2021, has announced  that he will support  BJP candidates in the next general election.

Another case highlighting the government's inaction involves corruption and money-laundering allegedly involving Russian, Indian  and Sri Lankan nationals. On 11 April 2014, Interpol issued a red-corner notice against KVP Ramachandra Rao, a Congress Rajya Sabha MP, based on a request from the United States. The notice was issued in connection with a case involving the payment of $18.5 million in bribes to Indian  officials for a $500 million titanium  project in Andhra  Pradesh. A district court in Illinois had issued a request  for the provisional  arrest of Rao and his co-accused. Dmitry Firtash, one of the accused in the case and a Ukrainian  national with close ties to the Russian president, Vladimir Putin, was arrested in Vienna in March 2014.

An affidavit filed by the CBI stated that Rao "must either approach  the appropriate courts of USA or should face the extradition proceedings in the Extradition court of India." The US department of justice unsealed  the indictment in the midst of the general-election campaign  in India. The indictment lists 57 transfers of funds between various entities, amounting to more than  $10.59 million, between 2006 and 2010.

The Modi government has not yet looked into the case, despite its public importance. Rao is "a senior Congress politician with cross-party connections so extensive that no government seems eager to dig very deep," the investigative journalist Gulam Shaik Budan writes in The Wire. "He was a confidante  and close friend of the late Con- gress politician YS Rajasekhar Reddy"the chief minister  of Andhra  Pradesh  from 2004 to 2009. "Within the state's bureaucratic circles, it was widely known that no major file moved without first being looked at by Rao." Rao's son is married to the daughter of a prominent BJP leader.

Rao continued as a member of the Rajya Sabha until April 2020. The Congress criticised Modi and investigating agencies for its inaction in corruption and black money cases against BJP leaders, while Rao remained  a Congress MP.

In March 2022, EAS Sarma filed an RTI application seeking to know whether any investigation under PMLA had been initiated by central investigating agencies into the matter. The ED replied that, as per Section 24 of the RTI Act, the disclosure of information is not applicable to intelligence  and security organisations under the central government. Sarma told me that this illustrates  "how the ED, preoccupied  with cases taken up under political pressure, has apparently been giving lesser importance to far more serious cases of money laundering, involving national interest."

4

"WITH A NEW GOVERNMENT in place and high priority accorded to tackling black money, the ED has been a busy place this last year," Rajan Katoch said on the fifty-ninth ED Day, in May 2015. Katoch had been appointed  secretary for heavy industries the year before but continued to hold additional charge as director  until August 2015.

During the past year, Katoch said, the ED had concluded investigations into nearly two thousand  cases related to the PMLA and the Foreign Exchange Management Act, surpassing the number of cases handled  in the previous year. Despite receiving three extensions, Katoch's tenure was abruptly cut short by months in October 2015. The government  cited administrative reasons, stating that it was challenging for Katoch to manage the additional charge of director.

Opposition leaders, however, attributed his removal to the ED's handling of the complaint into the National Herald  case against Congress leaders, including Sonia and Rahul Gandhi. The newspaper National Herald is published by Associated Journals  Limited and owned by Young India, of which the Gandhis are majority share holders. The case was initiated by the income tax department based on a complaint filed by the former Rajya Sabha MP and BJP leader Subramanian Swamy, alleging misappropriation and fraudulent conversion of AJL property and shares by the Congress leaders and Young India. The Congress argued  that the conversion of AJL's debt to equity in Young India was aimed at assisting the financially distressed company.

SK Mishra, the future ED chief, was the principal commissioner  of income tax, at the time. According to a profile in the Indian Express, "He built two cases that caught the attention of the government-one against media house NDTV and the other against Young India. Both cases were then in the realm of tax assessment; Mishra turned  them into prosecutable  offences."

In early August, immediately before Katoch's removal, Swamy wrote two letters to Modi. He wrote that, in July 2014, he had given Katoch a "detailed report of money-laundering carried out by Sonia Gandhi, Rahul Gandhi and four others in the acquisition of National Herald's Publishing  Company." Katoch, he added, "seems to have no interest in pursuing  any matter connected with Congress party."

Though the Income Tax department had built a strong case, "the Congress could simply return the loan and the matter could end," Jaitely had told Times Now in August 2014. On 1  May 2015, Himanshu  Kumar Lal, the joint director, had written a report  addressed to the revenue secretary stating that there was no predicate offense that could be made out in the case and that no FIR had been registered  under any relevant statutory provisions-effectively leaving the ED with no jurisdiction over the case. Swamy alleged that this decision was taken after eleven months of inaction and called the reasons given "bogus" and not in accordance with the law. In December, the Modi government  transferred Lal to the Unique Identification Authority of India.

"Good to hear en route to New Jersey that action on appointment of new Director of ED followed my letter to PM," Swamy tweeted. In response  to the decision, the Congress protested during the winter  session of parliament for three days. Jaitley stated that "the government  had no role in the National Herald case" and that there was "no file on National Herald in the Enforcement Directorate." He said Katoch's transfer was unrelated  to the National Herald issue. During Swamy's cross-examination at a trial court, he said he had "entirely relied on this investigation by the IT department."

The Modi government  appointed Karna) Singh as the new director. Karnal's appointment marked the first time in many years that an Indian Police Service officer held the position, as it has predominantly been held by officers of the Indian Administrative Service. His tenure saw the ED turning into a superagency with powers that no law enforcement  agency can boast of. Karna) had a reputation as an "encounter specialist," particularly known for his involvement in the controversial Batla House shootout. He had previously served as joint commissioner  of the Delhi Police's Special Cell, at a time when it faced criticism for alleged human-rights violations and the targeting of young Muslim men.

According to a 2009 report by the Jamia Teachers Solidarity Association, Karna! lied in his affidavit before the Delhi High Court, claiming that the National Human  Rights Commission was satisfied with the Delhi Police's report on the encounter. The NHRC's website reportedly contradicted Karnal's claim, as it was sending repeated reminders  to the police for a detailed report on the incident.

The JTSA also documented  16 cases during this period in which Muslim men accused of being operatives  of various terror organisations by the Special Cell were later found to be innocent by various courts. They were acquitted "not simply for want of evidence, but because the evidence was tampered with, and the police story was found to be unreliable  and incredulous," the report said. Karna I  denied these allegations to me, stating "I can only state that everything was by the book and the allegations were frivolous."

Upon assuming  the role of the ED chief, Karna) reportedly issued a circular reversing a previous order issued by Katoch, in January  2015, which stated that, according to the Code of Criminal Procedure, the registration of an ECIR required  the existence of an FIR. Singh's circular  stated  that the ED could now initiate an investigation even in the absence of a predicate  offence in the form of an FIR, as long as the court had taken cognisance of a complaint. The circular  emphasised  that the judicial magistrate determines the prima facie case against the accused after careful consideration.

Karnal advocated for independent powers for the agency to investigate money-laundering cases, even if the investigations conducted by other law enforcement  agencies failed in court. He expressed  his frustration with the limitations imposed on the ED in a speech, comparing it to a three-legged race. "Our one leg is tied with them"agencies such as the CBI or police-"and many courts consider that when the other case fails then the ED case automatically fails." Karna! said that "the rules of games are different  in the predicate offence investigation and the enforcement directorate investigation. Whenever, there is an investigation by the police, the statement  given before police officer is not admissible in the court while statement given before directorate officer is admissible before the court. So, appreciation of evidences is also different."

Meanwhile, serious allegations were raised against him and his deputy, Rajeshwar Singh. In early 2018, Rajeshwar, who was handling high-profile  cases such as the 2G spectrum  allocation, the AgustaWestland helicopter deal and the Aircel Maxis case, was accused of corruption and possession of disproportionate assets. The activist Anil Galgali submitted a letter to the prime minister's office and the CBI, alleging that Rajeshwar  and his relatives had acquired properties worth over 500 crore through  black money and corruption.

The revenue department was directed to investigate the complaint, and Rajeshwar  accused the revenue secretary  of siding with "scamsters." A public-interest litigation was filed before the Supreme Court, demanding  an investigation into the allegations. The government acknowledged that further investigation was necessary based on sensitive materials in its possession.

I sent a list of questions to Rajeshwar, whose lawyer responded  on his behalf stating that the matter was sub-judice. "As against the allegation of corruption and possession of disproportionate assets, there have been numerous  attempts at behest of individuals  under investigation to sabotage the investigation which was being carried out by Dr. Rajeshwar Singh," he wrote. He dismissed these as "baseless" and "without substance."

During the proceedings, a report from the Research and Analysis Wing, accusing Rajeshwar of having links with Pakistan's Inter-Services Intelligence, was placed before the court. In his response  to the RAW, in November 2017, Karnal Singh wrote, "I may mention that this surfaces at a time when the officer is due for promotion. It is therefore  important that in the light of above facts matter may be re-examined and records may be set right." The ED stated in a press release that Rajeshwar  "received a call in 2016 from a person based out of Dubai who gave important information regarding a case being investigated" by the ED. Rajeshwar, "being a responsible  officer with outstanding career records, passed on this information to the Directorate and the same was used in the investigation of the case," the release added.

In 2018, the Supreme Court decided that Rajeshwar should be held accountable for his actions. "You are simply an officer," the two-member bench told Rajeshwar. "You can't be given a blanket clean chit... We need to ensure that you are accountable. We don't want to damage you or comment against you. There are very serious allegations against you." The status and findings of the inquiry into the allegations remain unknown.

To my question on the RAW report, Rajeshwar's lawyer simply responded  that "a senior leader of BJP from Rajya Sabha" had intervened in the Supreme Court and also held a press conference in which he had exposed the "inherent contradictions" of the document. This was likely a reference to Swamy, who had sought to intervene in the case, and had deposed that Rajeshwar was "one of the most honest officers who was chastised for his uprightness,"  and that there was "political witchhunt" against him.

In February 2022, Rajeshwar took voluntary retirement and immediately announced  his entry into politics. He joined the BJP and was given a ticket to contest from Lucknow in that month's assembly election. "Hon'ble Prime Minister  Shri Narendra Modi ji, Hon'ble Home Minister  Shri Amit Shah ji, Hon'ble Shri Jagat Prakash  Nadda ji and Hon'ble Chief Minister Shri Yogi Adityanath ji have taken the resolve to make India a world power and a vishwa guru," he said in an open letter. "I shall also be a participant in this mission and contribute with conviction in this process of nation building."

Karnal, who defended Rajeshwar, also faced allegations of misuse of power. Jitendra Pratap Singh, an additional commissioner of the central goods and services tax, filed a complaint against him in 2018, accusing him of sabotaging an ED investigation into a cricket betting syndicate. Jitendra submitted in court that when he was heading towards  the "unearthing of Rs One Lakh Crores of money laundering," a complaint was filed against him by the CBI in 2015. The CBI was asked by the Central Vigilance Commission-the body that addresses government  corruption-to investigate Jitendra's allegations about Karnal, but the status of the investigation is unknown. "It is vehemently submitted that in spite of the said order of CVC, the CBI has neither acted upon the directions to investigate the matter, nor have they filed the Status Report, despite several reminders sent by the petitioner," a Delhi Hight Court order had stated, in December 2021. Karnal did not respond to interview requests over several months. To my questions about the cases, Karnal responded "I do deem it necessary  to point out that JP Singh is an accused in 2 anti-corruption cases where chargesheet has been filed in the court by CBI. As far as I am aware, his associates and him have been making frivolous complaints against witnesses, including me, in an attempt to frustrate the proceedings  before the Court of Law. You can ask the CVC/CBI for further clarifications since, to the best of my knowledge no investigation is being pursued  by the CBI against me." The CBI did not respond to my questions.

According to the IRS officer there was a "marked change" in the functioning of the agency under Kamal. The ED started registering a greater  number of cases primarily "to show up the numbers." In the majority of these cases, they said, the ED has been attaching properties of the accused that were acquired prior to the date of the alleged crime. A 2021 Supreme Court judgment explicitly states that there were no provisions to attach properties that have not been established  as proceeds of crime. "There is no point in these attachments they are doing now," the officer told me, since they would not be sustained in court.

THE TREND OF INCREASING  ED RAIDS  and attachments under Kamal Singh increased  exponentially  under SK Mishra. Around two-thirds of all attachments conducted by the ED in the past two decades have occurred during this period. The ED took up 2,723 cases in the last three years alone, while it had registered  only 1,262 cases since 2012.

The ED has undergone  significant expansion  in terms of staffing. In 2018, the agency had five special directors and 18 joint directors. It now has nine special directors, 36 joint directors, three  additional directors  and 18 deputy directors. It has established new offices in various states, including Tripura, Manipur, Sikkim, Meghalaya and Karnataka. Following the Supreme Court verdict upholding the PMLA amendments in July 2022, the ED requested an increase in its staff strength to three  times its current size and offices in every state capital.

A former colleague of Mishra said that officers who worked with him earlier were surprised when Mishra was appointed director. "It was difficult to read the guy," he told me, speaking of the years in which Mishra was posted in the Income Tax department in Ahmedabad. "He was sort of elusive. He hardly talked to anyone, hardly smiled at anyone. He would just walk with his head down and didn't interact much with anyone." The colleague told me that, when a junior officer known for voicing issues within the organisation joined the IT department, Mishra did not assign any work to him for about eight months. "Perhaps he didn't want the officer raising any alarm in his team," he said. To my question for Mishra on this, the ED responded  that it was "completely wrong and incorrect."

In a November 2021 report of the Rafa le deal, the French outlet Mediapart said that the ED under Mishra has been sitting on evidence on alleged kickbacks and bogus transactions. Though the ED had said in 2019 that it would undertake a separate probe into the "kick back from other defence deals," it has not done so.

Meanwhile, after Mishra took charge, the ED issued summons to the accused in the National Herald matter, reigniting national attention on a case he had supposedly help built. The ED accused Young India of transactions with a hawala dealer-according to the company, it had taken a loan from a subsidiary of the RPG group.

The ED has also increasingly started going after NGOs, journalists and media outlets that question the government.  In February 2021, the agency conducted raids at multiple locations associated with the digital news portal NewsClick. The raid at the residence of the editor-in-chief and founder, Prabir Purkayastha, lasted 113 hours. "Our coverage of the farmers' agitation could have been a possible trigger, or just being critical of the government  could be a possible trigger," Purkayastha told me. Even as the ED raids were going on at NewsClick,  pro-government media outlets ran a smear campaign based on information leaked to them by the ED.

Soon after the BBC released a two-part documentary critical of Mod i's role in the 2002 anti-Muslim  pogroms in Gujarat, the income tax department carried out a survey of over sixty hours at the media house's Delhi and Mumbai offices. The ED subsequently lodged a case against the media house for alleged foreign exchange violation. The central government  agencies have also gone after officers and activists who had demanded  accountability from the Modi government  in Gujarat and worked for justice for the victims, including the former IPS officer RB Sreekumar, the human-rights activist Teesta Setalvad and former IAS officer and social activist Harsh Mander.

Former ED officers and lawyers handling ED cases told me that another reason for the poor quality of investigations and the slow pace of a large number of cases handled by the agency is shortage of staff. "Every person is working on fifty to a hundred  cases in a year while, in the case of the CBI, the investigating officers are handling five to six cases in a year," the IRS officer who worked at the ED told me. "In that, even if one political case is there, all energy will go in that case there. So other investigations will suffer." The officer further explained that, in a large number of investigations, nothing much happens once the case is registered. "You just open the file," the officer said. "One day, some person will come and you will record their statement. Then you will attach some past property."

For most questions I sent, including about Mishra's tenure, the ED responded that "you appear to have been routed through  a politically motivated intent... which does not need to be answered."

Mishra has been granted extensions for the last five years. In November 2020, the cabinet retrospectively modified his appointment order from November 2018, extending it by a year. When the NGO Common Cause challenged this order, the Supreme Court said that extension of tenure granted to officers who have attained the age of superannuation should be done only in rare and exceptional cases, and only for a short period. The bench further said that it was not interfering with the extension because Mishra's tenure was coming to an end in November, adding that "no further extension shall be granted."

Four days before the expiry of Mishra's tenure, the government  amended the Central Vigilance Commission Act through  an ordinance, allowing oneyear extensions  for both ED and CBI directors, for a total of five years, in the "public interest." Prashant Bhushan, the lawyer representing Common Cause, told me that, through  the ordinance, "the central government circumvented the SC order."

Challenging Mishra's extension and the amendments to the eve Act and the Delhi Special Police Establishment Act-which regulates  the CBI-Mahua Moitra argued  in the Supreme Court that the "one year period cannot be termed  as a 'short' extension in view of the fact that the total tenure  of both CBI and ED Directors is contemplated as two years in law. Further, the phrase 'public interest' is unconstitutionally vague and confers unfettered discretion on the Central Government  to pick and choose those Directors for the purposes  of extension of tenure who act in line with the Government's preferences."

Moitra's lawyer Gopal Shankaranarayan told me that, "in this particular case, after a previous challenge had been considered by the Supreme Court, the court said very clearly that this man will not be permitted any further extensions. We have said that, by way of an ordinance, you can't just nullify or negate a whole judgment  of the SC. You can remove the basis of it. For example, if the act itself were to be amended, and you were to give tenures, that's different. But this is impermissible  in law."

"Is there no other competent person in the entire agency?" a three-member bench of the Supreme Court asked the solicitor general, Tushar  Mehta, in May, echoing the exasperation that another bench had expressed after the removal of MK Bezbaruah, twenty-five years earlier. "What will happen post 2023, when he does retire?" Mehta had previously argued that Mishra's tenure needed to be extended to ensure continuity in leadership ahead of the FATF review meeting scheduled this year. "Sometimes, continuity is needed when you are dealing with world bodies," he said.

"It's all teamwork," the IRS officer said, laughing, when I asked him about Mehta's argument.  Chandrashekar pointed out that it is usually the revenue secretary  who interacts with the FATF. "I am of the view that only government  departments should interact with  international bodies," he said, "not investigative agencies under them." Moitra argued  that "unjust  extensions" given to Mishra would hurt India's FATF grading. The FATF meeting will include an assessment of whether  the country is achieving the defined set of outcomes in implementing money-laundering laws. "The FATF is not in a position to comment on India's implementation" of anti-money laundering measures, "while mutual evaluation is ongoing," the FATF media team told me, responding  to questions over email. "The FATF expects to discuss the mutual evaluation report at its June 2024 Plenary meeting."

Notably, the FATF is taking stock of its guidelines, particularly the unintended consequences of laws against money-laundering, including the targeting of NGOs and the restriction of their funds. Countries such as Tanzania  and Serbia have faced international criticism for the abuse of such laws, which have resulted in the curtailment of civil  liberties. However, India has not attracted significant  attention in this regard.

OVER  FIVE  ED OFFICERS landed at the Bengaluru office of the human-rights NGO Amnesty International on a late October afternoon  in 2018. They locked the gates behind them and asked the staff not to leave the premises. The officers then asked those present  in the office to shut their laptops and prohibited them from using their mobile phones during a raid that lasted for over ten hours. Aakar Patel, who was then the CEO of Amnesty International India, was in the office at that time. He told me that the officers appeared  "annoyed" with Amnesty's  work on issues pertaining to Kashmir and justice  for victims of the 1984 anti-Sikh violence. "They were asking, 'Why you were working on these issues?' How does one respond to these kinds of questions?" Patel, whose house was also raided, said. "Their level of maturity did not appear to be that of legal officers."

When Patel asked one of the officers if the NGO's accounts would be frozen, the officer replied, "Goats are not informed if their throats are to be cut." The NGO had been raising questions about the Modi government's human-rights record over the years. In August 2020, it had published reports on human-rights violations in Kashmir, and the complicity of the Delhi Police and the accountability  of the government  in the targeted  violence against Muslims in northeast Delhi, which claimed 53 lives. Within a month of this, the ED froze Amnesty International's accounts in India. The NGO, which has a presence in over a hundred  and fifty countries, had to shut down its India offices. Over a hundred  employees lost their jobs without salary for the month and severance  pay.

NGO activities are facing excessive scrutiny under the Modi government, which delivered a body blow to the sector by introducing stringent provisions to the Foreign Contribution (Regulation) Act. The amendment  led to the cancellation of licences of over eighteen hundred NGOs between 2019 and 2021. There were increased allegations of irregularities, allowing the ED to initiate probes under the FEMA. In November 2021, the national security  advisor, Ajit Doval, declared  a sort of war on the sector. "The new frontiers of war, what you call the fourth-generation warfare, is the civil society," he said. "It is the civil society that can be subverted, suborned, divided, manipulated to hurt the interests of a nation." Since then, the crackdown on NGOs and activists by agencies including the NIA, CBI and ED has seen a steady rise.

The ED had ordered the freezing of Greenpeace India's accounts as well, but the Karnataka  High Court overturned this decision, in February 2019. "Even when there is no ground  for the ED investigations, it can still cause harm," Binu Joseph, executive director of Green Peace South Asia, said. "It is like slowly  choking you. A lot of our resources and time now goes into these multiple litigations. It is draining out the funds of the NGOs. Several small NGOs who were doing good work are shutting down or struggling to survive."

"All these attempts are to quell the potential of this sector for dissent and destroy their autonomy and voice," Harsh  Mander, the director  of the Centre for Equity Studies, which also faced raids, told me.

"Are there any proven cases, that is the question to ask," Noshir Dadrawala, the CEO of the Centre for Advancement of Philanthropy, told me. "Have they been able to give any sustainable evidence that any of these NGOs were involved in money-laundering?" He argued  that the idea that money could be laundered through  the FCRA route was absurd, since foreign funds are directly transferred to the SBI, which can be easily tracked. Dadrawala emphasised  that the number ofNGOs registered under the FCRA is relatively small-around twenty thousand-and the majority comply with reporting requirements and financial audits. "The average money coming in annually is roughly Rs.20,000 crore," he said. "Majority of these are into education and healthcare, genuinely reporting their activities, getting their accounts audited and returns filed."

For Mander, being hounded by central investigating agencies was "difficult, harrowing and diminishing." The agencies, he said, can lower the morale of the sector by "both wearing you out through  the process and destroying your reputation." But Mander said his resolve is to continue working. At a time when the independence and voice of parliament, the judiciary, the media and academia are being gradually dismantled, he said, "it is the dissent within civil society that has proven the hardest  to curtail."

(Nileena MS)

 - The Caravan

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