Mr AG, Isn't Maran Money Laundering Threat to National Security?

Published: 14th July 2015 03:26 AM  |   Last Updated: 14th July 2015 03:38 AM   |  A+A-


CHENNAI: The Attorney General’s firm opinion is that economic offences, which include charges of money laundering, do not constitute a threat to national security.

The AG says that to hold Marans’ offences as constituting prejudice to the security of the state, they must have done something “threatening national security”, in the sense of actual or imminent threat, to deny them security clearance. The test of actual and imminent threat adopted by the AG to exonerate Marans seems totally misconceived. The threat to national security need not be actual or imminent. Even potential threat prejudices national security. The Cable Television Network (Regulation) Act 2000 uses the words “in the interest of the security of India” or the words “in the interest of the security of the State”. They comprehend potential threat, which is markedly different from “threatening the security of India” in the sense of actual threat. According to the Home Ministry, Marans have caused prejudice to the security of the State in two ways.


One, they had set up an unlicenced, clandestine and unmonitored telephone exchange of 764 high-speed telephone lines, which undeniably constitute potential threat to national security [Mr Attorney, you got facts and law right on Marans? NIE June 13, 2015]. Two, they also stand charged for money laundering, which according to the Home Ministry constitutes potential threat to economic security of India. A critique of the AG’s view to the contrary not only confirms the Home Ministry’s view, but leads to the position that his view that money laundering is no threat to national security is itself a national security risk. Read on.

Security of State

The AG says that Marans’ television and cable businesses are protected under the right to freedom of expression guaranteed under Art 19(1) (a) of the Constitution. The freedom is only subject to the restrictions imposed by Art 19(2).

One such restriction, security of the state, is discussed by the AG in his opinion. The AG refers to the decided cases on Art 19 to contend that “Security of State” in Art 19(2) means crime or violence intended to overthrow the government, levying war and rebellion against the government, external aggression and crimes and the like.

On the decided cases, the AG says that, from the stand of the Home Ministry itself, it is clear that none of the cases instituted against the Marans — meaning including the charge of money laundering — would fall under threat to “national security”.

By that logic, the AG then boldly says that the Home Ministry “seem to suggest that economic security of the state should be covered under the Article 19(2) of the Constitution. I do not warrant for the same”.

Mr AG, do you really mean that economic security is not comprehended within the meaning of security of the State in Art 19(2)?

MR ATT.JPGIt is obvious that the AG has not been updated on the law, including on the Madras High Court judgment on Kal Cables, by those who had briefed him. In the Kal Cables judgment, which the AG is relying on to give his opinion, the Madras High Court has discussed extensively whether economic security is integral to security of the State. The court had referred to a recent judgment of the Supreme Court of India (in the case of Ex-Armymen’s Protection Services Private Limited Vs. Union of India, 2014). In that case, saying that while it is difficult to define in exact terms as to what national security is, the SC indicated that national security would include economic solidarity and strength. The court also added that what constitutes “security” is a matter of policy for the government to decide and not for the court to define. Mr AG, your opinion does not refer to this judgment or that of the Madras High Court at all. Both say that what is security is a matter of government policy and economic security is integral to it. Yet, you say, Mr AG, in your opinion that economic security is not integral to national security according to courts — thus contradicting both the Supreme Court and the High Court. Referring to the Supreme Court view and also the abuse of power by the Marans noticed by it, the Madras High Court has gone further and ruled, “May be a time has come to hold that the abuse of official position by a person and amassing of wealth of unimaginable proportions, is an assault on the security of the State. Economic aggression may soon become more dangerous than military aggression.”

Mr AG, you seem to be unaware of this observation of the High Court in Marans’ case itself, which directly conflicts with your opinion.

AG Needs to Update Himself

Again, the AG’s contention that economic security is not comprehended within national security is clearly based on an outdated view of law. The AG needs to be updated on this branch of law fast in the interest of national security, as he will be advising and arguing for the government time and again on this vital issue. The world has changed dramatically in the last couple of decades. The Center for Strategic Conferencing Institute for National Strategic Studies 2011 [National Defense University Press Washington, DC] says: “Economic security is a major element of national security, even as borders are less important than ever.” The Congressional Research Service Report to US Congress titled Economics and National Security: Issues and Implications for US Policy [Jan 4, 2011] says that the US national security consists, among others, first, physical security and second, economic security. How then can any one doubt that economic security is integral to national security? Then, Mr AG, is not your view that in Art 19(2) of the Constitution of India “there is no concept of economic security which the Home Ministry seeks to rely on” clearly outdated? The Home Ministry seems to be far more updated on the issue than you, Mr AG.

Money Laundering: Threat to Security

Mr AG, you say that, in your considered view the “charge of economic offences for denying security clearance in the instant case cannot amount to threatening national security.” It means that economic offences are no threat to national security. Now see how outdated are the AG’s view here too. A report on Economic Crimes by the Indian Audit and Accounts Service [2007] says: There is a growing recognition in the world that the economic offences are, many times, part of other serious crimes posing serious threat to the security of the nation.” And, of all economic offences that endanger national security, money laundering is the most serious.

A report titled “Money Laundering and Terrorist Financing: A Global Threat” published by the US Department of State [2004] says that money laundering poses international and national security threats through corruption of officials and legal systems and threatens the financial stability of countries and the international free flow of capital. Mr AG, none of the cases relied on by you had had occasion to consider whether money laundering is a threat to national security. They are, therefore, no authority to say that money laundering is not a national security threat. Mr AG, can you deny this? And yet you say that according to decided cases economic security or economic offences are not integral to national security.

Mr AG, bribery and money laundering are considered the world over as a deadly combination against national security. You seem to have ignored this totally. You have even failed to notice the Preamble to UN Convention On Corruption to which India is a signatory. The UN Convention has noted that all member states are concerned about the seriousness of problems and threats posed by corruption “to the stability and security of societies” and points to links between corruption and other forms of crime, “in particular, organised crime and economic crime, including money laundering” and that cases involving vast quantity of assets can threaten political stability and security of the country”. The Marans have been charged with both bribery and money laundering, Mr AG. They allegedly got paid `740 crore for Dayanidhi Maran, as Minister, pressuring a businessman who owned the Aircel cellular company to sell his company to Maxis Group of Malaysia. They are believed to have laundered the bribe back as genuine investment in Sun Group. The Enforcement Directorate has seized the asset representing the bribe under the money laundering law. This is precisely what money laundering means. An article in the US Federal Bureau of Investigation Law Enforcement Bulletin [May 2001] titled “Money Laundering: A Global Threat and the International Community’s Response” defines money laundering as “the process by which one conceals the existence, illegal source, or illegal application of income to make it appear legitimate”. This is precisely the charge against the Marans. They are alleged to have concealed the bribe taken by them in the Maxis deal and recycled it to make it appear as legitimate capital.

Mr AG, will you still assert that the allegation of money laundering against the Marans is no threat to national security? No, you cannot. And how ridiculous then it is for the I&B Ministry to ask the Home Ministry for “clinching evidence” that can prove allowing Sun TV network operate would impinge upon national security?

Finally Mr AG, will you withdraw your opinion and give another one consistent with the latest law and correct facts?

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