The reality of ED and investigation agencies
Enforcement Directorate sources said that the narrative of a low conviction rate has been created by Opposition leaders.
The Enforcement Directorate (ED), the agency investigating money laundering and allied crimes, has been criticised for its use against politicians from Opposition parties. Alleging the misuse of central agencies such as the Central Bureau of Investigation (CBI) and ED to frame their leaders, nine Opposition leaders have written to Prime Minister Narendra Modi and said that no action was taken against corrupt politicians who joined the Bharatiya Janata Party (BJP). Earlier, in Parliament too, a few leaders questioned the conviction rate in such raids and the actions of investigation agencies. Really, it is a challenging job for agencies. I had good relations with former directors of ED, Sudhir Nath and Javed Chaudhari. They used to talk on and off the records about some cases. On the alleged irregularity and corruption in the Commonwealth Games, Sudhir Nath was in charge and we carried some exclusive facts in our Hindi weekly Outlook. We were also aware that he was facing tremendous pressure from the ruling leaders to weaken the cases. Unfortunately, later he died due to a heart attack. Javed Chaudhary also handled a number of important cases. After retirement, he has also Enforcement Directorate written about his experiences with ED and other ministries, his handling of the infamous bank securities and Jain hawala scams as Director of Enforcement and Union Revenue Secretary. In those years, the major problem was the lack of staff. After 2014, Prime Minister Narendra Modi and his government tried to strengthen investigation agencies. Even then, the number of cases increased and certainly for complicated cases of money laundering agencies have to work not in India, but in a number of other countries to get evidence.
The ED, that has taken up over twice as many money laundering cases in the past three years (2,723 from 201920 to 2021-22) compared to the previous seven (1,262 from 2012-13 to 2018-19), has asked the Centre to increase its strength by three times and establish offices in every state capital, people familiar with the matter said. ED, which also looks at foreign exchange law violations, took up 11,420 of these cases in the last three years compared to 13,473 in the previous seven, according to data provided in the Lok Sabha by Union minister of state for finance Pankaj Chaudhary.
The agency sent a detailed proposal for its cadre restructuring, seeking to treble its workforce from the current 2,100 officers to 6,000, to the department of revenue (DOR) under the Union Ministry of Finance, the people added, asking not to be identified. The actual strength of ED is currently around 1,700, which includes all ranks at the top as well as assistant directors, enforcement officers, clerks, sepoys, multi-tasking staff, and stenographers.
The ED has also sought to open a zonal office in every state capital; and two in some big states such as Maharashtra, Madhya Pradesh, and Rajasthan. It currently operates through 21 zonal and 18 subzonal offices across five regions–west, East, Central, South and North, apart from specialized Headquarters Investigation Units (HIUS) and Special Task Forces (STF).
According to it, the ED registered 221 money laundering cases during 2012-13 fiscal, 209 (2013-14), 178 (2014-15), 111 (2015-16), 200 (2016-17), 148 (2017-18), 195 (2018-19), 562 (2019-20), 981 (2020-21) and 1,180 cases (2021-22). Similarly, the registration of FEMA cases stands at 1,722 (2012-13), 1,041 (2013-14), 915 (2014-15), 1,516 (2015-16), 1,993 (2016-17), 3,627 (201718), 2,659 (2018-19), 3,360 (2019-20), 2,747 (2020-21) and 5,313 (2021-22). These details prove free hands to agencies to investigate and prosecute alleged persons or companies.
An increase in the number of searches shows the government’s commitment to preventing money laundering and improved systems for gathering financial intelligence through the use of technology, better interagency cooperation and exchange of information, both domestically and internationally, concerted efforts to complete pending investigations in old cases and investigations in complex money laundering cases that have multiple accused requiring multiple searches. These are some of the reasons for the increase in the number of searches, he said. On convictions, he said of all convictions, only one had been discharged on merit. Seeking to counter allegations that it is specifically targeting Opposition leaders and using excessive coercive action disproportionate to its low conviction rate, the ED released data which, among other things, claimed that its conviction rate is actually 96%. ED sources said the narrative of a low conviction rate has been created by Opposition leaders, who have compared convictions to the total number of cases registered. “That is not how the conviction rate is calculated. How can you claim failure in a case which, say, was registered yesterday or whose trial is still going on? The conviction rate is calculated based on the number of cases in which a trial has been completed,” said an ED official. Directed by the Supreme Court to present a report card of its performance as a prosecuting agency, CBI director Subodh Jaiswal told the court that the agency’s success rate in securing convictions has been 6570% in the last decade. An affidavit filed by the CBI director in the court stated that it had sent over 150 requests to governments of Maharashtra, Punjab, Chhattisgarh, Rajasthan, Jharkhand, West Bengal, Kerala and Mizoram during the period 2018 to June 2021 for grant of specific consent for investigation of cases in the territories of these states. This was so because these eight states had withdrawn the general consent previously granted to CBI under Section 6 of the Delhi Special Police Establishment Act, 1946. The CBI in its affidavit explained that it had made requests for investigating “trap” cases, disproportionate assets cases, cases relating to allegations of cheating, forgery, misappropriation and loss of foreign exchange, as also bank fraud cases. Requests in 78% of cases are stated to be pending which mainly pertain to bank frauds of high magnitude impacting the economy of the country and this, in turn, has led to the destruction or dissipation of evidence. This is certainly not a desirable position.
For DRI, every day is an Anti-smuggling Day. The enormity of the issue of smuggling can be gauged from the fact that DRI seizes more than Rs 1,000 crore of contraband every month. Smuggling is carried out in our country by land, sea and air routes via different modes—containers, porous borders, and usage of sophisticated means by smugglers etc. Smugglers are using sophisticated methods and technologies to smuggle goods across international borders. This kind of illicit trade in terms of counterfeiting and smuggling is a global risk that has negative impacts on economic activities, deprives governments of revenue, forces a high burden on taxpayers, exposes customers to dangerous products and provides linkages to terrorism.