Rahul Gandhi And Mum In PMLA Al Capone Moment

For the Gandhi family, after all the pelf and power, over decades, of providing three prime ministers and one remote controller, this is the Al Capone moment.

Almost regal, even in a republic, an above-the-law comportment has gone unchallenged for decades.

There are dark whispers of fabulous wealth, billions, accumulated and stashed abroad. More voices from the shadows on kickbacks in defence purchases and every other large contract. Trunks and suitcases of je ne sais quoi brought in from abroad without Customs declaration or scrutiny. Stacks of land and buildings, flats, apartments, hotels, construction companies. Lavish properties, cropping up both in India and abroad in vast excess of the rules. Indian antiquities and artefacts being exported to relatives in Italy. No frisking and passage through the VIP sections of airports - it has been a charmed life at the top with no government agency ever having the temerity to even question them, let alone start an investigation, or file a case.

Nothing untoward has ever been proved in a court of law. The Gandhis are obviously very well-heeled, but maybe they can conjure up the funds they need from thin air, like magic.

Even now, after eight years of the Modi government, and several cases actually filed, on Gandhis and Vadras, both, nobody seriously believes they can actually be sent to jail. Those who say they can, are considered to be cranks. Lalu Prasad or Azam Khan are not in the same league they snort.  

The notorious Depression era American gangster Alphonse Gabriel Capone, known as Al Capone or Scarface, gangster boss of the ‘Chicago Outfit’, allegedly murdered scores of rivals and opponents in the course of his flamboyant career. There are famous movies on him. Capone indulged in flourishing but illegal businesses, but was finally convicted and jailed only on an income tax evasion case.

In America, income tax evasion is a criminal offence, unlike in India. It is ironic that the mother-son duo is also up for crores in tax evasion in this same matter, as indicted by the Central Board of Direct Taxes (CBDT), who have managed to make it stick through many appeals using the best of lawyers all the way to the top court. But it will ultimately result in paying the tax and a fine, rather than being sent to jail.

The Prevention of Money Laundering Act (PMLA) however deals with the criminal act of money laundering. In the case of Rahul and Sonia Gandhi, it involves just Rs. 1 crore that has the potential to send them both to jail if convicted.

The PMLA is stringent in many ways, not least of which is a presumption of guilt unless the netted ones can prove their innocence. Every statement made during verbal questioning under video and audio recording, and in writing under signature of the accused, is admissible as evidence in a court of law.

Rahul and Sonia Gandhi have been out on bail since 2014 on this case. It  involves the purchase of shares of Associated Journals Limited (AJL), the owner of the independence era National Herald newspaper started by Jawaharlal Nehru, and the several properties it owns.

After eight years, when it was largely assumed that it had been more or less shelved, both Rahul and Sonia Gandhi have received summons for questioning. Subramaniam Swamy, a prime mover in the case, says he presented some new evidence to the ED two years ago to get it going again.

Rahul Gandhi presented himself to the ED for questioning on Monday the 13^th of June 2022, determined to make a media spectacle of it and try and get some political mileage. Some said he was being launched for the penultimate time.

Alongside massive and organised street protest by his partymen, erstwhile ministers, slogan shouters interspersing party and Rahul praise rhymes with Vande Mataram in order to cover all bases. There were bandwalas dressed up as Ramayana characters, party workers delivering filmi style dialogues Dev Anand style, party spokesperson Surjewala in full-dress Prithviraj Kapoor mode, all a-quiver with emotion.

This entire circus was claiming a government vendetta against their innocent leadership, amidst frequently expressed determination to fight this injustice till breath resided in their bodies.

All however in the face of a massive Delhi police bandobast to contain any law-and-order threat. This greatly cramped their style. All the demonstrators were promptly detained by the Delhi Police as soon as they stepped out of the All India Congress Committee (AICC) office in Central Delhi. Once released, after being taken in for unlawful assembly in defiance of Section 144 (that disallows any more than a gathering of four persons), some of the elderly Congress grandees complained of being shoved and pushed.

They showed off their cuts and bruises to the waiting TV men. One former Congress finance minister, no stranger to criminal and civil prosecution, a senior lawyer and jailbird himself, claimed a hairline fracture on a rib.

But none of this could be verified, because there was no mention of it while being held in the police station. They could have been medically examined if they complained.

There were some comical interludes caught on TV cameras, including a senior Congressman sprinting away from the police to avoid being detained. Other people drafted into the paid-for crowd had no idea what they were protesting.

Elsewhere, marches and protests to ED offices, grandly named a Satyagraha, echoing the independence movement, with many invocations of MK Gandhi, were held simultaneously around the country.

Rahul Gandhi went to the Enforcement Directorate in New Delhi on the 13^th of June 2022. The first day’s questioning lasted 10 hours of recorded conversation and careful revision of the written statement by him. The ED officers questioned Rahul Gandhi again on the 14^th. But on the 14^th, apart from a few Congress workers waiting in the AICC headquarters, the senior leaders had taken the day off. There could be more days of questioning or even a prayer for a spell in custody if Gandhi stonewalls too much.

It is a simple case, the kind it is easy to prove.Rahul and Sonia Gandhi took a loan of just Rs. 1 crore, albeit interest free and without collateral, not from a scheduled bank, but from a well-known Hawala operator in Kolkata. They used Rs. 51 lakhs of it to buy the shares of AJL. They bought 75%  of them, between mother and son, displacing multiple small shareholders of AJL, some very old, others dead but with heirs, who were not even informed about this takeover.

With the acquisition of the shares, came a bonanza of property holdings worth anywhere between Rs. 2000 and Rs, 5,000 crores, according to recent estimates. A lot of the property is on land sold to AJL for the express purpose of running its newspapers in multiple cities all over India. The trouble is the newspaper stopped being published years ago, and was revived online once this case came about. And later still, as a once a week broadsheet recently to provide a further fig-leaf. But this is published from the Indian Express Building in Bahadur Shah Zafar Marg, and not its own building, because it is fully rented out. Besides, the state governments that gave the land for the AJL National Herald buildings at vastly reduced rates, are restive, since no newspaper is being published from those premises.

Because of the nature of the buyout into a Chapter 25 company under the Companies Act, and Young Indian Limited being a non-profit company, the properties cannot be sold.

However, they can be rented, and that is precisely what the Gandhi duo proceeded to do, along with the rubber-stamp darbari owners of the balance 25% of the Young Indian shareholding.

Tenants have included the Ministry of External Affairs (MEA), contracted for when the UPA was in power, to house a passport office in the National Herald Building on Bahadur Shah Zafar Marg.

This rental income, running into crores from multiple properties around the country, is the subject of the Income Tax demand.

But this too has allegedly been siphoned off to benefit the personal coffers of Rahul and Sonia Gandhi. But the income was not shown in the tax returns of either Rahul or Sonia Gandhi.

 In addition, the Congress Party, on its part, has advanced a sum of Rs. 90 crores to Young Indian Limited, ostensibly to pay off the debt accrued in AJL  over the years. This significant amount has been written off by the Congress Party subsequently.

There is no restriction against a political party giving a loan from its funds. They derive however through public donations, and are tax exempt only because its monies are meant to be used for the party’s political activity. It is a stretch to suggest bailing out AJL or Young Indian qualifies as a political activity. To then write it off is really generous with other people’s money.

But this is the other case, involving income tax evasion, that stands, even though it was taken to every possible court in the land in an effort to have it squashed.

The PMLA case that the ED is pursuing right now has had a Delhi High Court observation that the takeover of AJL shares and properties into Young Indian smacks of a ‘criminal acquisition’ and must be investigated.

But the juicy part that cannot be wriggled out of, is the Rs. 1 crore loan from a Hawala operator in Kolkata. Was this a loan at all, or just Gandhi money being round-tripped via an ‘entry’? If so, its classic money laundering, and falls smack dab in the centre of the PMLA. Ouch!

(1,606 words)

June 14^th, 2022

For: Firstpost

Gautam Mukherjee