One of the great tragedies of contemporary Indian politics is the corrosion of the autonomy of our law enforcement agencies. It probably dates back to the Emergency in the mid-70s, after which every political party has continued this unhealthy practice with varying degrees of doggedness. The independence of these agencies is a cornerstone of any vibrant democracy. The other large democracy, the USA, has seen this battle play out in its history. John Edgar Hoover, the legendary head of the Federal Bureau of Investigation (FBI) for 37 years, battled with several American presidents. Recently, we have seen how American enforcement agencies and the US Congress have been challenging President Donald Trump for malfeasance. For any democracy to thrive, the checks and balances of its institutions must be allowed to work to prevent abuse of power by those in office.
In the past few months, the sudden hyper-activity of one central agency — the Enforcement Directorate (ED) — in its pursuit of India’s economic offenders, mainly politicians and businessmen — has raised questions about its functioning. The ED has been around for decades and isn’t quite the new sheriff in town. What has changed, however, is its empowerment through a troika of post-liberalisation laws designed to be severe with economic offenders.
The Prevention of Money Laundering Act (PMLA), the Foreign Exchange Management Act (FEMA) and, more recently, the Fugitive Economic Offenders Act (FEOA) can be unsparing towards transgressors. FEMA, introduced in 1999, treats offences related to foreign exchange as civil offences and is, hence, relatively milder. The FEOA, which came into force in January this year, is meant to pursue economic offenders who might have fled overseas by confiscating their property, sometimes way in excess of their dues. It is, however, the PMLA that has made the ED a fearsome agency. The 2002 Act aims to curb money-laundering and confiscate the proceeds from it. Earlier, an offence under PMLA was something called a ‘predicate’ offence, a crime that was part of a larger crime, and was tried under the Prevention of Corruption Act. PMLA came into force as an independent Act in 2005, and all violations under it were treated as cognisable and non-bailable.
This instantly placed enormous powers in the hands of the ED, allowing it to make arrests without warrants and seize the properties of those accused of receiving proceeds from money-laundering. The ED has, in the past five years, attached properties worth over Rs 55,000 crore. Confessions before an investigating officer are admissible as evidence, bail provisions are stringent and a 2013 tweak in the Act makes even possession of the proceeds of money-laundering a criminal offence. Since 2005, when the revised PMLA and FEMA gave it more teeth, the ED has registered over 2,500 money-laundering cases and over 16,000 cases of foreign exchange violations. However, there have been only 18 convictions so far.
Defending the corrupt cannot be anyone’s brief. However, it is the way the law is applied that sometimes raises concern. The classic case of harassment that goes against all norms of natural justice is the issuing of lookout circulars (LOCs) without informing the person concerned. The person discovers it only when stopped at the point of departure. The other problem is that investigations drag on for years. Agencies rush off on a tangent without solid evidence. Headlines are made and a person’s reputation sullied even before a charge-sheet is filed.
The government’s drive against corruption is commendable; we need hard-hitting measures against the corrupt. But weaponising enforcement agencies such that they trample on a citizen’s fundamental liberties, including the right to be considered innocent till proven guilty, does not bode well for our democracy.
(India Today Editor-in-Chief's note for the cover story, Weapon of choice, for October 14, 2019.)