When Jesus promised to baptize with the Holy Spirit, whom was He referring to?
The promise referred to the nation of Israel, looking forward to the day of Pentecost when they would be inundated or engulfed by the Holy Spirit. Baptism here means being overwhelmed, not water baptism. In that Jewish economy, Jesus baptizes Jews into the Holy Spirit, unlike the later Pauline mystery where the Spirit baptizes Gentiles into Christ.
Les explains that the baptism Jesus instituted was not water baptism but an engulfing or inundating by the Holy Spirit. He was referring to the nation of Israel and looking forward to the day of Pentecost, when they would be inundated. Les notes that the Greek word baptizo really meant to be engulfed; Homer and Plato used the same word for ships sunk at sea, literally engulfed. He also points to 2 Corinthians 10, where Paul refers to Israel coming out of Egypt and through the Red Sea as baptized unto Moses and unto the cloud, even though they crossed on dry land. They were engulfed in Moses' leadership and in the power and protection of the cloud. So baptism in Scripture does not always mean water baptism. Les then contrasts this with the complete change of operation in Paul's letters: now it is not Jesus who does the baptizing, but the Holy Spirit, who baptizes predominantly Gentiles and baptizes believers into Christ. Back in the Jewish economy, Jesus baptizes Jews into the Holy Spirit; by the time of Paul and the revelation of the mysteries, the Holy Spirit baptizes predominantly Gentiles into Christ—a total reversal.