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Politics

National Herald Case: Modi's Third Assault on the Gandhis Shows His Growing Fear of Defeat

The Modi government’s objective is not to prove anything given that there is not even a shred of evidence of wrongdoing by any member of the Congress party in this case. It is only to make a credulous and confused public believe that the Congress’ leaders are corrupt.

On November 9, the following news item appeared in the Times of India, the nation’s most widely distributed newspaper. “The Enforcement Directorate (ED) questioned former Congress treasurer Pawan Bansal for the second consecutive day on Wednesday in the money laundering case in which National Herald former Congress Presidents Sonia Gandhi and Rahul Gandhi recorded their statements last year. ED is probing their alleged role in taking over control of the party mouthpiece National Herald along with its half-dozen properties situated at prime locations in Delhi, Mumbai, Chandigarh, and Lucknow, and valued conservatively at hundreds of crores.”

It went on to remind readers that this was the third time the Enforcement Directorate had questioned the Gandhis, and that in August 2022 also the ED had ‘searched the premises of Associated Journals Ltd at Herald House, on Bahadur Shah Zafar Marg in central Delhi”, after grilling them for hours at the ED Headquarters.

Unsurprisingly for the Modi era neither then, nor till today, has any newspaper considered it necessary to perform that most hallowed function of responsible journalism, which is to crosscheck allegations made against an indicted person or group, by getting their side of the story. So, it is not surprising that most newspaper readers now harbour the suspicion that the Gandhi family and its friends and associates in the Congress party are as corrupt as other run-of-mill politicians in our ramshackle democracy. This article is an attempt to set the record straight.

The allegation was first made by the political maverick Subramaniam Swamy, as a private complaint in the Rouse Avenue District Court in  Delhi in 2012. Swamy alleged that the Congress party, headed by Sonia Gandhi, had sold Associated Journals, a defunct company started by Pandit Jawaharlal Nehru in 1937 to publish three pro-freedom publications, the National Herald in English, Qaumi Awaaz in Urdu, and Navjivan in Hindi, to a dummy company titled Young Indian, for a song.

Also read: Explainer | Why Has the ED Summoned the Gandhis in the ‘National Herald’ Case?

Associated Journals was defunct, but it owned a large amount of real estate in these three cities as well as in four others – Bhopal, Mumbai, Indore, and Patna. In 2012, Swamy valued all of this at Rs 5,000 crores,  and alleged that the purpose of the exercise was to give the board of Young Indian the right to sell, rent or develop  AJL’s properties. 76% of the shares in Young Indian were held by Sonia Gandhi and Rahul Gandhi, and the remaining 24% by Congress party leaders Motilal Vora and Oscar Fernandes.  Swamy argued that under both the Representation of the People Act, 1951, and the  Income Tax Act of 1961, it was illegal for a political party to lend money for commercial purposes. He, therefore, demanded an investigation by the Central Bureau of Investigation (CBI) and de-recognition of the Congress party.

What Swamy either deliberately or inadvertently overlooked was that there was also nothing untoward about creating a new company to buy and revive an old one. As president of the Congress, Sonia Gandhi had every right to revive the National Herald, for the paper had been founded by Pandit Jawaharlal Nehru in 1937 with the express purpose of “reflecting the policy and principles of the Indian National Congress”. It had got off to a flying start in 1937 but never fully recovered from the blow it received when the British banned it in 1942 for supporting the Quit India Movement. By the time the ban was lifted in 1945, the British were on their way out and Pandit Nehru and other senior leaders, who used to write for it regularly before 1942, were preoccupied with the transition.

The offices of the National Herald newspaper. Photo: NH_India/Twitter

The death blow came in the mid-1980s when digital technology made it easy to produce a newspaper simultaneously from any number of centres. This killed smaller, regional newspapers, including the National Herald in Lucknow and Searchlight in Patna. Within a decade, scores of independent newspapers all over the country were closed down. By then, the National Herald had become entirely dependent on annual handouts from the Congress party. In 2008, when these losses had mounted to Rs 50 crore, Sonia Gandhi decided to call it a day and shut down the paper. Provident fund, voluntary retirement, and other minor closure raised the cumulative loss to Rs 90.25 crore.

In 2012, the Congress reversed its earlier decision and decided to revive the National Herald. But Associated Journals was drowning in an ocean of debt and could not raise a paisa.

The normal way of reviving any company in this condition was to convert all or a part of its debt into equity shares and sell these at a heavy discount to those willing to gamble on its recovery. This is a route that companies all over the world routinely take. Freed of the burden of interest payments, the company regains the capacity to borrow money and launch a new business plan. This was the route the Congress had decided to take. But to ensure that future profits, if any, went to the organisation and not the shareholders, it made Young Indian a not-for-profit company under Section 25 (a) of the Companies Act. From then all the revenues that accrued from its properties went to the Young Indian. Not a paisa came to the Congress party or its board members.

This did not deter the Modi government from unleashing the ED upon the Congress. But when, after a full year of investigation, the ED concluded that there were no grounds for converting Swamy’s private case into a governmental inquiry, Modi’s fury broke all bounds. Rajan Katoch, the Director of the ED  was dismissed overnight, along with Himanshu Kumar, his chief investigator. The new director was Sanjay Kumar Mishra who, for the next five years, did everything Modi wanted him to do. In flagrant violation of the long-standing rule that the ED chief had to have a fixed two-year tenure with a maximum extension of one year, the Modi government gave Mishra extension after extension through Presidential ordinances, till the Supreme Court finally forced him out in September this year.

During his five-year tenure, Mishra used the eight amendments to the Prevention of Money Laundering Act that the Modi government had pushed through parliament in 2019 to turn the Enforcement Directorate into Modi’s principal weapon for destroying the credibility of his political opponents in state after state. Among his principal, but by no means only, victims were Sanjay Raut and Anil Deshmukh of the Shiv Sena in Maharashtra, and Satyendra Jain and Manish Sisodia in Delhi. Other political party leaders who have been similarly hounded are P.Chidambaram of the Congress and his son Karti, Hemant Soren in Jharkhand, D.K. Shivakumar in Karnataka, and Sharad Pawar in Maharashtra.

But throughout Mishra’s term, the principal target of the government has been the Congress party, in particular, Sonia Gandhi and Rahul Gandhi. All the while that Mishra was overseeing the campaign to discredit the BJP’s political opponents, Swamy’s ‘private complaint’ had been dragging its way through the Rouse Avenue District Court with Swamy producing nothing to prove his allegations and failing to appear before it on date after date citing one excuse or another, until he himself asked for the prosecution to be stayed.

In June 2022, therefore, Mishra resumed the attack by dragging Sonia Gandhi and Rahul Gandhi once more into the Enforcement Directorate to answer the same allegations of money laundering that had been dismissed by Rajan Katoch in 2015. Over the next two months the ED interrogated Rahul Gandhi for 50 hours and Sonia Gandhi for 10 hours, but once again unearthed nothing new that could enable it to frame a prima facie case of money laundering.

A year later, an alarmed Modi government facing an imminent general election against a united opposition for the first time, decided to go on the offensive once more. On November 21, i.e. less than two weeks ago, it attached all the properties of Associated Journals and Young Indian, valuing these at Rs 752 crore.

The Modi government’s objective is not to prove anything – it has learned from all that has been described above, that there is not even a shred of evidence of wrongdoing by any member of the Congress in the setting up of Young Indian. The sole purpose of its charade, therefore, is to make a credulous and confused public believe that the Congress’ leaders – who claim the mantle of India’s freedom fathers, must have done something wrong to have caught the eye of the Enforcement Directorate.

Only a contemptuous, united rejection of this thesis by the entire INDIA alliance will awaken doubts in the public, and foil Modi’s stratagem for winning the next election through false propaganda alone. That united voice is still to be heard.

Prem Shankar Jha is a veteran journalist.