Why ED is on the backfoot after raiding I-PAC in Kolkata

There are reasons why the Enforcement Directorate (ED) finds itself between a rock and a hard place after its ill-advised raids on the Kolkata premises of political consultancy firm I-PAC.

The Central agency has tried very hard to plead that the raids this week had nothing to do with the Assembly elections in the state in May, though the consultancy has been working for the state’s ruling Trinamool Congress (TMC); that the raids were evidence-based and not targeted at any political party (read TMC).

It also told Calcutta High Court that it was merely acting on an FIR filed by the CBI in a coal-pilferage case in 2020. Agency sources were quoted in local media as saying that proceeds from the crime were paid to I-PAC and part of the money was used in the Goa Assembly election in 2022. In which case, the income tax department would have been the right choice as a Central agency to inquire into the sources of funds to the TMC and I-PAC. However, with apparently no notice from the I-T department pending, the ED was roped in to inquire into alleged payments to I-PAC by TMC.

Even if the ED manages to prove that TMC received the proceeds of coal pilferage and paid part of it to I-PAC for use in the Goa Assembly election, how will it prove that I-PAC committed a crime and laundered the money?

What the ED will also find hard to explain is why the raids had to be conducted now, and why they could not wait until after the elections in West Bengal. If there is evidence of a financial trail from 2022 — it will not miraculously disappear in 2026; moreover, such trails from the past — once exposed — are hard to gloss over or erase.

Had the ED wanted to investigate sources of funds available to West Bengal’s ruling party and if a part of the funds was paid to the consultancy firm in 2022, it could have done so through I-T notices.

This is the same coal pilferage case in which the ED has questioned TMC general-secretary Abhishek Banerjee and his wife Rujuta a number of times since 2021. The high court could legitimately ask what progress has been made by the agency in the investigation so far, and why no charge sheet has been filed.

It would be interesting to observe if the court asks the agency about the latest evidence that it says triggered the raids, and whether the ED obliges in open court or in a sealed cover. The evidence claimed by the ED would conclusively tell the court if there was any urgency in conducting the raid or if it could have waited for six more months.

The ED raid in Kolkata stinks suspiciously of a hatchet job gone awry. This is partly because of the timing and partly because of the ED’s past record. Significantly, the agency has not cared to attach the assets of I-PAC and its director Pratik Jain, though it routinely does so while investigating money laundering cases.

The fact that the search and seizure operation has not been followed up with attachment orders may indicate one of two possibilities. The first is that the agency embarked on a fishing expedition and the intention was to unsettle the consultancy and the ruling party in West Bengal. The other possibility is that the evidence of money laundering against the consultancy is still weak.

No matter what happens in court, the political narrative has been seized by West Bengal chief minister and TMC supremo Mamata Banerjee. She has now upped the ante by alleging that money from the coal pilferage scam had reached the BJP top brass too, all but naming state BJP chief and the Assembly's leader of opposition Suvendu Adhikari, calling him a gaddar (traitor) who was the conduit for the money to the BJP.

Illegal coal mining has always been rampant in both Jharkhand and Bengal, the two states with coalmines. Part of the proceeds of the illegal trade is shared by both law enforcement agencies and political parties, and there will be no surprises if the BJP has been among the recipients.

The West Bengal chief minister, imperious — or reckless, depending on your point of view — as ever, also named Union home minister Amit Shah and defence minister Rajnath Singh, the two most frequent visitors to the state. She went on to warn that she had ‘proof’ of them being recipients of the proceeds of the illegal coal trade, and would not mind releasing them if New Delhi continues to irritate her.

In any case, the raids would have unsettled the consultancy firm and is bound to affect its functioning ahead of the crucial election. The raid also strengthens corruption charges against the state government and ruling party. The dilemma before the ED and CBI is whether to escalate the issue — they have already done so by approaching the high court and may go up to the Supreme Court for action against the chief minister for obstructing public servants.

In a way, they are damned if they do and damned if they don't. In either case, Banerjee sees a political advantage. She has already electrified her base by her audacious physical intervention during the ED raid. While unprecedented and clearly unlawful, it projected her as a strong leader ready to lead from the front. It also strengthened the image of a lone woman fighting all odds against the BJP, the Election Commission, and now the ED.