Senthil Balaji 15th ‘Powerful’ Arrest: Why ED Has Emerged as India's Fiercest Law Enforcement Agency

The arrest of Tamil Nadu minister V Senthil Balaji has yet again brought the Enforcement Directorate in the eye of a storm. The senior cabinet minister was arrested after 18 hours of interrogation, which was followed by high drama as he reportedly suffered a cardiac arrest.

Even as the hearing related to the arrest is on before the Madras High Court, chief minister MK Stalin dared the BJP “not to mess with the DMK”. With the political slugfest continuing, Balaji happens to be one of many such “arrests” of influential people after 2019.

A dozen senior bureaucrats, including eight IAS officers, an IPS officer, an IRS officer, as well as 15 senior politicians from opposition parties – former union finance and home minister P Chidambaram, former J&K CM Farooq Abdullah, Delhi deputy CM Manish Sisodia, six ministers (of different states), an influential MP, and host of MLAs across states: this is the list of India’s “powerful” ED arrests since 2019, as per ED records accessed by News18.

A top ED official said out of 726 cases that the central agency is probing, 181 are related to political leaders. The official added that 191 important cases related to massive scams, political or bureaucratic corruption or bank frauds or money laundering, are now on trial.

Apart from arrests, the ED has summoned, interrogated, and raided at least 115 senior politicians and around two dozen senior IAS, IRS and IPS officers. The bureaucrats under investigation include eight IPS officers, at least three senior IAS officers from West Bengal in connection with the coal, cattle and recruitment scams, four IRS officers in income tax and at least five senior IAS officers from Jharkhand in connection with the coal scam, said the official.

The ED, which was almost non-existent before 2014, has now become India’s fiercest central law enforcement and investigating agency with sweeping power. Under the current director, Sanjay Mishra, the agency is probing India’s major corruption and national security cases. He served at a senior position in the finance ministry, when Chidambaram was finance minister in 2013, and was later moved to the home ministry. However, in 2019, after Mishra was appointed as the director, Chidambaram was arrested in connection with money laundering and corruption cases followed by other politicians’ arrests.

Mishra is known to be a reclusive officer, who refuses to meet any politician or accused, and stresses on speedy investigation and “zero tolerance” for corruption during internal meetings, said his colleagues at the ED. His term as the director was extended thrice by the central government and his third term is scheduled to end in November.

Across governments, the CBI has been called names by the opposition parties — from “Congress Bureau of Investigation” to “BJP Bureau of Investigation” and to “caged parrot”. But the ED is now called “Modi’s new CBI”.

Politicians, policy makers and corruption

Apart from national security cases, the ED is investing its time in major corruption cases across states. The cases include liquor scam and illegal coal and stone mining cases in Chhattisgarh; excise irregularities case in Delhi; coal and stone mining cases in Jharkhand; coal, cattle, teacher recruitment and municipality employee recruitment scams in West Bengal; and land for job scam in Bihar. Senior IAS officers have been arrested in the Jharkhand mining lease cases, Chhattisgarh coal levy cases, and Kerala gold smuggling cases.

Even though the political opponents of the BJP allege that the ED’s action is only against states run by the opposition parties, a senior ED official told News18, “There is evidence and FIRs lodged against politicians who call the ED politically motivated. Many cases are now in the trial phase. Can they deny the cases and the evidence? We have nothing to do with politics, and no politician talks to us. Law takes its own course.”

From where does the ED draw power?

Unlike the Central Bureau of Investigation (CBI), the ED is a multidisciplinary organisation not bound by the Indian Penal Code (IPC) and Code of Criminal Procedure (CrPC). The agency is entrusted with the enforcement of various laws and draws its powers from the Prevention of Money Laundering Act (PMLA), 2002. It has quasi-judicial powers under the Foreign Exchange Management Act, 1999, to investigate alleged violations of the exchange control laws and regulations, as well as the authority to impose fines on those found guilty.

With the last amendment in 2013, the PMLA emerged as one of the strong laws in the country. In 2018, the government made the ED even more powerful by passing the Fugitive Economic Offenders Act, 2018, which the agency enforces from April 21, 2018.

There are at least 130 predicate offences that the ED can probe. Unlike the CBI, it does not need the Centre’s or any state’s recommendation or the court’s direction to pick up a case for investigation. It can investigate any case if there is an FIR. The agency is under the finance ministry and not the home ministry.

While introducing the Prevention of Money Laundering (Amendment) Bill, 2012, in the Rajya Sabha on December 17, 2012, Chidambaram as the finance minister delivered a speech on strengthening the PMLA and explained the concept of money laundering and predicate offence.

“…Firstly, we must remember that money laundering is a very technically defined offence. It is not the way we understand ‘money laundering’ in a colloquial sense. It is a technically defined offence. It postulates that there must be a predicate offence and it is dealing with the proceeds of a crime. That is the offence of money laundering,” he had said. “It is more than simply converting black money into white or white money into black. That is an offence under the Income Tax Act. There must be a crime as defined in the schedule. As a result of that crime, there must be certain proceeds – it could be cash, or property. And anyone who directly or indirectly indulges or assists or is involved in any process or activity connected with the proceeds of crime and projects it as untainted property is guilty of the offence of money laundering. So, it is a very technical offence. The predicate offences are all listed in the Schedule. Unless there is a predicate offence, there cannot be an offence of money laundering.”

Five years later, in 2019, he was arrested by the ED and under the same law.