Many view the politics around the 'pay for no work' affair involving a mining company, the Kerala Chief Minister and his daughter as a classic example of how not to run an anti-government campaign. It is said that by latching on to a relatively trivial issue like the GST returns of CM Pinarayi Vijayan's daughter Veena, the Congress had left the CPM off the hook.
It always looked like Pinarayi Vijayan and his party had no convincing defence for the big moral question: Can a CM and his daughter accept money from a company that would be constantly under the scrutiny of the Pollution Control Board under the Chief Minister?
So the CPM seemingly successfully shifted attention from this troubling moral dilemma to what it framed as Veena Vijayan's upright and conscientious behaviour. It said Veena, like any law-abiding citizen, had paid taxes for the money received.
To use a cricketing analogy, it was like defending a player found guilty of betting by saying that he had never once chucked during the matches. Suddenly, the only bone of contention is whether the player chucked or not.
Kuzhalnadan's forced error
The CPM played this focus-shifting game and Congress MLA Mathew Kuzhalnadan took the bait. He challenged finance minister K N Balagopal to show proof. Though it came after nearly two months and was not conclusive, documents revealing Veena's GST payments were released.
All of a sudden, the Opposition advance was forced off the main path and made to tear through a wild thicket of tax-related technicalities on the way to what looked like a steep fall. The entire controversy was in danger of being devoured by one question: Has Veena paid GST or not?
Twist in the story
But what the CPM failed to take into account was the resilient nature of a big allegation like this. According to the report of the Income Tax Interim Settlement Board, it involved not just the bribing of top politicians by a mining company but also the routing of a part of the bribe money through the account of the CM's daughter.
An allegation of this magnitude is both adaptable and near indestructible. Even if temporarily upstaged by a sideshow like Veena's GST returns, it has a way of drawing energy from the very distraction that had sidelined it to call attention back to itself.
That Veena has paid her GST was the CPM's biggest counter till now. But this 'honourable' act will be the heaviest cross the party will have to bear from now on.
Why Veena's fee is illegal
The Interim Settlement Board has stated in no uncertain terms that the money paid by Cochin Minerals and Rutile Limited (CMRL) through banks to Veena was nothing but "illegal payments".
Here is what the report says about payment to Veena through banks; top politicians, on the other hand, were paid using the non-banking route. "The assessee company (CMRL) is making payments through banking channels to persons connected to a prominent decision-maker to claim it as a deductible expense by claiming to compensate a service which it has not received. This payment cannot be treated as business expenditure in the hands of the company and should be seen as part of the other payments made to political persons (sic)."
In other words, the funnelling of bribes through banks and the subsequent payment of GST for this money by Veena were ways to launder illegal money.
CPM's amendment worry
To understand the danger hidden for the CPM in this finding, one has to take note of a recent amendment to the Prevention of Money Laundering (PML) Act, 2002. On July 7 this year, the Centre through the amendment included the Goods and Services Network (GSTN) in the PML Act. Since then, the Enforcement Directorate (ED), formed under the PML Act, has been sharing with the GSTN any information it has obtained if it has grounds to believe that GST provisions were violated.
Now, a central quasi-judicial body under the Income Tax department has found that the money for which Veena is said to have paid the GST was ill-gotten. Such a piece of information will automatically land in the possession of the Financial Intelligence Unit under the Union Ministry of Finance and will be passed on to the ED as required under the PML Act. Here's the short of it: The ED has been told that Veena's account has been used to launder money.
Satheesan's gambit
If at all the ED is still not aware or is feigning ignorance, Opposition leader V D Satheesan has invited its attention in quite an inventive manner. He was careful with his words. If he had called for an ED probe, the CPM would have accused him of working with the BJP to destroy the CPM.
So he flipped his logic. He asked whether the agency had already arrived. "The Chief Minister should make it clear whether the Enforcement Directorate had carried out a probe into the 'pay for no work' scandal?"
The ball is now in the CM's court, and he has only himself to blame. Satheesan's poser is not a shot in the dark. He can justifiably hurl this poser as the CM himself, during his press briefing on October 19, had vaguely referred to a "group" enquiring into the business deals of Veena's company Exalogic.
Pinarayi's election pitch
During the press briefing, the CM had said that a "group" had approached him and said one of the companies associated with Exalogic had terrorist links.
"I asked them about the company. It was a company running educational institutions. I told them not to go there. It's a highly reputed institution. It will never have any terrorist links," Pinarayi said and added: "The only reason why such a link was made was that it was run by a particular community."
It is probable that Pinarayi was using the controversy to his favour by speaking of the Centre's anti-Muslim prejudice and his eagerness to protect the community. He might have even been hinting that the BJP is as suspicious of him as it is of the Muslim community, subtly attempting to forge a political bond with the Muslim community.
Some disturbing questions
Nonetheless, his vague remarks have spawned many questions, some of them highly disturbing.
One, which is this "group" that told the CM of a company's terrorist connections? Two, was this "group" the ED, as the Opposition leader seems to hint? Three, if it was a central agency like the ED, why did it seek answers from the CM about Exalogic's business partners when it could have independently gone about its investigation?
Four, can a CM prevent a central agency like ED from carrying out its own investigation? Five, if an investigation was indeed done, what were its findings? Six, were more questions asked about Exalogic, especially about the funds it received from a mining company?
