The Enforcement Directorate (ED) has arrested BRS leader K Kavitha, the daughter of former Telangana chief minister K Chandrashekar Rao, under the Prevention of Money Laundering Act (PMLA). The arrest was made in connection to the Delhi liquor scam, in which Kavitha has been accused of being part of the “South Liquor Lobby” that played a role in influencing Delhi’s liquor policy.
The origin of the issue is with the excise policy framed by the Government of the National Capital of Delhi for liquor trade in 2021, which was later withdrawn by Lieutenant-Governor Vinay Kumar Saxena ordering a probe. The investigations led to the arrest of Manish Sisodia, former deputy chief minister of Delhi and a leader of the Aam Aadmi Party (AAP).
In relation to this case, ED has also issued summons to Kavitha, as a part of its probe into liquor policy. In March 2023, ED summoned her to appear in person in Delhi for questioning in connection with the Delhi excise policy case. Kavitha argued that she had not been named in the first information report (FIR) and that the summons were challenged in the Supreme Court.
The role of Kavitha in the Delhi liquor scam is not directly linked with her being termed as a proxy in South Group. South Group was accused in the liquor scam for gaining access to Delhi’s liquor licences while paying a bribe to AAP, which the Enforcement Directorate claims was used by AAP in elections of Goa. Members of the South Group have turned approvers in the case with the ED potentially using their statements for the arrest of Kavitha.
This sudden arrest of Kavitha just before the release of the Lok Sabha poll schedule shows the weaponisation of central agencies against the opposition. These raids by the ED also come in the backdrop of the emerging role of the enforcement directorate’s raids leading to the purchase of electoral bonds by business groups, with money being donated to evade persecution.
The role of electoral funding of political parties is where the tussle between the Enforcement Directorate and politicians is creating fault lines. Any mechanism of political funding other than legal channels is being used by these agencies for a crackdown on political party leaders. The BJP using central agencies has figured out how to squeeze the opposition to all forms of political funding. This also needs to be seen with the Congress being blocked from accessing its own bank accounts by the Income Tax agencies.
The weaponisation of the Enforcement Directorate is an issue the political parties in India have been constantly complaining about. The Prevention of Money Laundering Act (PMLA) has been used against civil society organisations and opposition parties to arrest and detain people with malafide intentions. The Enforcement Directorate’s powers have been constantly challenged in the Supreme Court by various people subject to its harrasment.
Opposition leaders across India including leaders like Hemant Soren, Arvind Kejriwal, DK Shiva Kumar, and Abhishek Banerjee have been subject to one form or another abuse of powers by ED. The functioning of the ED has also raised multiple challenges to officials of the state government who are being summoned by ED and the Supreme Court is largely allowing these actions of the Enforcement Directorate.
The role of the Enforcement Directorate and its actions against opposition and civil society were documented in a shadow report later last year, which was submitted to the Financial Action Task Force part of its Mutual Evaluation Review (MER). This report documents how NGOs were indiscriminately targeted under the money laundering laws and procedures. The MER report if and when it comes out could potentially disclose the scale of this problem in India.
The surveillance infrastructures and laws that were amended post 26/11 Mumbai Attacks including PMLA in 2012 gave wide powers to investigative agencies in India. These powers meant to stop terror financing give Law Enforcement Agencies (LEAs) like Enforcement Directorate unlimited powers with no oversight. We are now witnessing a political fallout of lack of accountability of these powers of investigative agencies being used against democratic opposition.
After 9/11 the United States figured out a way to weaponise the dollar with its dominant position in global currency trades. The US threatened any and every other bank, country and their entire networks that were helping finance terrorists to be cut off from the currency trades. US officials later used these mechanisms against Iran, China and Russia as part of their geo-political strategies. Similar to the US, India is weaponizing its domestic currency and its transfer against political opposition instead of real terrorists.
