Excise policy case spells trouble for AAP as it becomes first party to be named as accused under PMLA

In a first-of-its-kind case with deep political ramifications for the Aam Aadmi Party, the Enforcement Directorate named AAP as a “company” that has been a “beneficiary” of money laundering, where a part of the “proceeds of crime” was used in its election campaign in Goa.

This is the first time a political party has been named by the ED as an accused and a “beneficiary” of proceeds of crime allegedly used in an election campaign.

Seeking custody of Delhi Chief Minister Arvind Kejriwal, the ED told the Delhi court that AAP, a political party, is a “beneficiary operating company and every individual associated with it (office bearers) should be held accountable under PMLA.”

The court has sent Kejriwal to ED custody till March 28 in the multi-crore Delhi liquor policy case.

The ED case against AAP comes at a time when certain other political leaders in states like West Bengal and Kerala are being investigated in money laundering cases.

For now, the ED has made a detailed 11-point submission to the court explaining why Kejriwal as well as AAP needs to be prosecuted for the offences in the multi-crore scam.

On Friday, the ED told the court that AAP is a political party comprising an “association of individuals registered under Section 29-A of Representation of People Act 1951”. It said, “As per the definition under section 2(f) of the Representation of People Act 1951, 'political party' is defined as an association or a body of individual citizens of India registered with the Election Commission as a political party under section 29A.”

The ED said since the AAP is also an association of individuals, it would fall within the definition of "company" under section 70 of PMLA.

Sources said serious deliberations were held and legal opinions were taken before the ED decided to charge AAP and subsequently move to arrest the sitting chief minister.

Notably, it isn’t the position of chief minister alone that Kejriwal holds which makes him an offender in the case, but the ED has shed light on his role as the “national convenor” of AAP when the offence of money laundering took place. It said the national executive is the highest executive body that organises and coordinates the activities of the party at the national level.

“Arvind Kejriwal is the national convenor of AAP as is evident from the official website of AAP but also from other material, he is in-charge of AAP at national level,” said the ED, adding, “he is also a member of political affairs committee and national executive”.

The ED said AAP as well as Kejriwal shall be deemed to be guilty, as the offences took place with his knowledge and he didn't exercise any diligence to prevent such contravention.

“Kejriwal was ultimately responsible for the funds being used in the election expenses including their generation,” ED told the court.

In its submission to the court, the ED accused Kejriwal of taking advantage of the fact that he was the CM of Delhi and used his post to facilitate the offence of money laundering by the “company” (AAP).

The ED said the “formulation, hatching the conspiracy of kickbacks with the South Group members” and eventually using part of the “proceeds of crime” from the tainted liquor policy in the AAP’s Goa election campaign were not only done with Kejriwal’s knowledge but also his active collusion.

Kejriwal is “liable for use of proceeds of crime to the tune of Rs 45 crore in the election campaign of the AAP in Goa under section 70 of PMLA apart from his role in his personal capacity,” said the ED making out its case against the chief minister.