1) SNC Lavalin scandalThe SNC Lavalin scandal is financial scam related to the contracting of the government with a Canadian

company, SNC-Lavalin which resulted in an alleged net loss to the exchequer of 374.50 crore  in the renovation

and modernization works of the hydro electric power stations at Pallivasal (37.5 mw), Sengulam (48 mw) and

Panniar (30 mw) - also known as PSP project in short - installed in between 1940 and 1964 at Idukki district

in Kerala state of India. Several politicians were involved and eventually charged, including former ministers G.

Karthikeyan of Indian National Congress, Vijayan. The first Politburo member in the CPI (M) history to be

prosecuted in a corruption case.

History

In 1992, the Central Electricity Authority (CEA) of India rejected a proposal of Kerala State Electricity

Board (KSEB) to renovate the three hydro-electric power projects at Pallivasal, Sengulam and Panniar instead

the CEA recommended a capacity upgradation of the generators in these three power projects, after they found

that these projects are in good condition. KSEB disregarded this recommendation and went forward with the

decision to renovate these projects.

The initial negotiations with the Canadian company SNC-Lavalin - a company which had been present in the

state's power sector for several decades - began during the tenure of United Democratic Front government,

[7] under the leadership of the then power minister C.V. Padmarajan and later, the Kerala State Electricity

Board (KSEB) signed a memorandum of understanding (MoU) with SNC-Lavalin on 10 August 1995, when G.

Karthikeyan of the Congress Party was the power minister, after the resignation of C.V. Padmarajan. Under the

provisions of the MoU, the funds for the renovation were to be arranged by SNC Lavalin from the Export

Development Canada (EDC), Canada, and the Canadian International Development Agency (CIDA). Later, it

was also found out in a probe by CBI, that G. Karthikeyan also wanted a quid-pro-quo assistance from the

Canadian government for the setting up a hospital for granting a project for refurbishment of Pallivasal,

Shengulam and Panniyar Hydro electric stations in Kerala, after the revelation of a letter by G Karthikeyan to

the then vice-president of Lavalin business operations, Klaus Triendl, who is also an accused in the Lavalin

scandal.[4] It was only in the September 1995, that the KSEB undertook a feasibility study on the proposal, by a

retired Chief Engineer of the KSEB, who later became a consultant to SNC-Lavalin.

Based on the consultant's report and further discussions, the KSEB under the leadership of G. Karthikeyan,

signed the contracts with SNC-Lavalin to provide technical services for management, engineering, procurement

and construction supervision on 24 February 1996, to ensure completion of the projects within three years. The

consultancy agreement did actually include the rates for various equipments to be purchased as part of the

project. Consultancy agreements were converted into fixed price contracts for the supply of machinery and

technical services as part of the renovation at a cost of 67.94 million Canadian dollars (Rs 169.03 crores). The

final follow-up agreement with SNC-Lavalin regarding the renovation of PSP project was signed by Pinarayi

Vijayan of Left Democratic Front - after they took office winning the majority in legislative assembly in 1996 - in

February 1997. Technically, the Left Democratic Front (Kerala) led government could not retreat from the

agreements, even if they wanted to, according to the provisions of the MoU which was already signed by their

predecessors, that is the ministers of United Democratic Front government.

After the final contract was signed, the KSEB entrusted the National Hydroelectric Power Corporation

Limited (NHEPCL) a study to justify the prices quoted by Lavalin, and they concluded in that study that in view

of the grant to the proposed Malabar Cancer Centre (MCC), the purchase of Canadian equipment and

accessories could be considered favorably.[3]

The CAG found that Lavalin was only a consultant intermediary and not the original equipment manufacturer

and that the supply of goods and services was made by other firms at a much higher cost leading to excess

expenditure. According to the CAG, the absence of due professional care in negotiating the foreign loan proved

to be detrimental to the financial interests of the Board. The Board also could not ensure the quality of

renovation work in the absence of technology transfer and training of its engineers. Owing to various technical

defects in the equipment, the generation of power could not be maintained even at the pre-renovation level and

the Board had to spend on repairs.

According to the CAG, failure to exclude the fee for technical consultancy from fixed price contracts resulted in

an avoidable payment of Rs 20.31 crores, and failure to negotiate and exclude the exposure fee from the loan

agreement resulted in avoidable payment of Rs 9.48 crores and future liability of Rs 2.21 crores. In the opinion

of the CAG, there was also an avoidable payment of Rs 1.20 crores as commitment fee despite there being

committed but unavailed advance.

The CAG found that the Government did not receive Rs 89.32 crores out of the grant of Rs 98.30 crores that

was promised for the Malabar Cancer Centre as the MoU was not renewed in time during the tenure of United

Democratic Front when Kadavoor Sivadasan was the minister in charge of power.

On 16 January 2007, Kerala High Court ordered a CBI enquiry into the scandal.

On February 18, 2008, the CBI informed High court of Kerala that the investigation was progressing and said

that former Electricity MinistersPinarayi Vijayan and G. Karthikeyan would be examined at the appropriate time.

On 21 January 2009, the CBI filed a progress report on the investigation in the Kerala High Court. Pinarayi

Vijayan had been named as the 9th accused in the case.

On 2 February 2009, the CBI wrote a letter to the Governor of Kerala, seeking sanction for the prosecution of

Pinarayi Vijayan under section 197 of the CrPC, who later referred it to the cabinet.

On 6 May 2009, the Cabinet opined that it was not necessary to grant permission to prosecute Pinarayi

Vijayan.

On 31 August 2011, the Supreme Court of India issued notices to Government of Kerala and the CBI, on a

petition filed by Pinarayi Vjayan, challenging the then Kerala Governor, R.S. Gavai's nod to prosecute the

former, over-riding the decision of the council of ministers, after he wrongly assumed that he had jurisdiction

and power to grant sanction on his own. The proceedings against Pinarayi Vijayan initiated in the special court

were stayed by this order.

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2) Jeep scandal caseFrom Wikipedia, the free encyclopedia

The jeep scandal in 1948 was first major corruption case in independent India. V.K. Krishna Menon, the then

Indian high commissioner to Britain, ignored protocols and signed an Rs 80 lakh contract for the purchase of

army jeeps with a foreign firm.

Corruption allegations

V. K. Krishna Menon, then the Indian high commissioner to Britain, bypassed protocol to sign a deal worth Rs

80 lakh with a foreign firm for the purchase of army jeeps. Even then the jeeps were unusable, but Nehru

forced the government to accept them. Govind Ballabh Pantthe then Home Minister and the then Government

of Indian National Congress announced on September 30, 1955 that the Jeep scandal case was closed for

judicial inquiry ignoring suggestion by the Inquiry Committee led by Ananthsayanam Ayyangar. He declared

that "as far as Government was concerned it has made up its mind to close the matter. If the opposition was

not satisfied they can make it an election issue". Soon after on February 3, 1956 Krishna Menon was inducted

into the Nehru cabinet as minister without portfolio.

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3) Taj corridor case

The Taj Heritage Corridor case is an alleged scam wherein 2002–2003, the then Chief Minister of Uttar

Pradesh Mayawati and a minister in her government, Nasimuddin Siddiqui, were charged with corruption. The

Taj Corridor project was intended to upgrade tourist facilities near the Taj Mahal and was to be implemented

during her tenure as Chief Minister. The then BJP government at the Centre gave the Environmental Clearance

required for the project near Taj Mahal. However, later on the BJP backed out and then started saying that the

project was not cleared by the Environment Ministry and blamed Mayawati for starting construction work near

the Taj Mahal.

Cost and funding

The total estimated cost of the project was Rs. 175 crore (US$ 44 million).

Political support

The project was started with the support of the BJP and interrupted when Mayawati Bahujan Samaj

Party disaligned itself with that party on 25 August 2003. Commentators said that this change in alignment was

due to Mayawati's quickly-changing temperament and because of the BJP's hostility toward the Taj Heritage

Corridor project. A political commentator said that the support for the Corridor project came when Mayawati

protected BJP leaders L.K. Advani, Murli Manohar Joshi and Uma Bharti from prosecution in the case of

the demolition of the Babri Masjid by moving the trial of all charges except the conspiracy charge to a court

in Rae Bareilly.

Investigation of scam

It has been alleged that Mayawati embezzled the money dedicated for this project. The case is currently under

investigation by the Central Bureau of Investigation. Initially, the case saw some rapid progress, when CBI

conducted extensive searches on her various addresses, and claimed that though she had claimed income of

only Rs. 1.1 crores during her tenure as CM, her bank balance in a single bank went up to 2.5 crore and total

assets held by her were estimated at Rs.15 crore. At one point a warrant was expected for her arrest, but she

was granted a stay. 

In September 2003 Ajay Agrawal, the former government counsel in the project, began accusing Mayawati of

enriching herself from the Corridor project and also stated that Mayawati had recently acquired property both in

her name and in the care of her relatives.

However, since late 2003, investigations appear to have slowed down; there are speculations in the media

about political interference, and theSupreme Court of India has several times pulled up the CBI for its tardy

progress in the case. Media sources reported that various officials who had been investigating the case were

transferred to other duties.

Project status

The project is now defunct, and plans are being made to remove the partial construction near the Taj Mahal

site and replace it with a low tech forested greenbelt. The High Court of Allahabad has ruled in favor of a 45–50

crore project but exactly who will foot the ASI bill remains to be clear.

-----------***********-------------***********------------************-------------

4) Kargil coffin scamAfter the armed conflict that too place in 1999 between India and Pakistan in the Kargil sector of India, a major

scam had occurred in the purchase of coffins by the then led Government Of India. The government had

incurred a heavy loss of 1, 87,000 dollars in the entire transaction. Comptroller and Auditor General of India's

report had found several frauds in the transaction of coffins. The caskets were purchased from Buitron and

Baiza, a company based in United States of America rendering funeral services. The then ruling

governmentNational Democratic Alliance had purchased 500 caskets worth 2500 dollars each  which was

presumed to be thirteen times the original amount. However the ambassador from both the

countries India and United States of America had declared in writing that those caskets had a cost worth 2,768

dollars each.

CAG Report

Due to the disturbance in the national security of the country, National Democratic Alliance had made an

emergency transaction as more than 500 army-men had died in the battle. The report by the Comptroller and

Auditor General of India had portrayed that some middlemen in the transaction had made lump sum profits.

The report showed that the fraud couldn't have taken place without the presence of willing insiders who could

have even been bribed to commit it.

CBI Investigation

The investigation was further been carried forward to Central Bureau of Investigation who filled a charge sheet in 2002.[5] The three major Indian Army men who were listed under the charge sheet were Major General Arun Roye, Colonel SK Malik and Colonel F B Singh. Further Victor Baiza, a US National who supplied the aluminium casket and body bags to the Indian Army was also under the charge sheet. However, the then defense minister George Frenandis was not included in the report and was later given a clean chit from the scam. TheCentral Bureau of Investigation officials had later declared that defense ministry had imported inferior caskets and body bags at a heavy price of Rs 125,000 per casket and Rs 4,250 per body bag due to which the Indian Government had a revenue loss of Rs 89.76 lakh. Further in June 2006 Central Bureau of Investigation registered a case under sections 420(signifies cheating), 120 B (criminal conspiracy) and the Prevention of Corruption Act.

**********---------------*****************-------------------------***************-----------------

5) Uttar Pradesh food grain scamUttar Pradesh food grain scam took place between years 2002 and 2010, in Uttar Pradesh state in India,

wherein food grain worth  35,000 crore (US$7.7 billion), meant to be distributed amongst the poor,

through Public Distribution System (PDS) and other welfare schemes like Antyodaya Anna

Yojana (AAY), Jawahar Rozgar Yojana and Mid-day Meal Scheme for Below Poverty Line (BPL) card holders,

was diverted to the open market. Some of it was traced to the Nepal and Bangladesh borders, as in 2010

security forces seized Rs 1.17 crore worth of foodgrains like paddy and pulses being smuggled to Nepal,

another Rs 60.62 lakh worth of grains were confiscated on the Indo-Bangladesh border.

The scam first came into light in 2003, during the Chief Minister ship of Mulayam Singh, in Gonda district in the

distribution of foodgrain meant for the Sampoorna Grameen Rozgar Yojana and soon complaints started

pouring in from other districts as well. After initially ordering an inquiry into the scam Mulayam Singh withdrew

it. [3] The Special Investigation Team (SIT) set up by the Mulayam Singh government in 2006, lodged over

5,000 FIRs.[4] Subsequently the next UP chief minister Mayawati upon assuming office, ordered a CBI probe

into the scam on December 1, 2007. Media dubbed it, "mother of all scams", and TV news channel, Times

Now reported the scam which started in 2002, under the reign of following Chief Ministers of Uttar Pradesh,

estimated to be at over  200,000 crore (US$44 billion).  Uttar Pradesh as with other states and UTs is allocated

a monthly quantity of foodgrains, i.e. rice and wheat, by the Central government for distribution amongst AAY,

BPL and APL families, under TPDS managed by the state government. For the period from Apri1 2010 to

March 2011, this quantity for the state was 528395 tons. 

The latest of the scam series in India, initially referred as the 'UP rice scam' could be the biggest of them all,

even outdistancing the so called2G Spectrum scam. The scam involves goofing up of rice worth 

200,000 crore (US$44 billion). It was a scam that stretched to almost 7 years and 300 FIRs. The scam was

reported in UP (Uttar Pradesh, India) between the years 2003-2007, the period when Samajwadi Party

leader Mulayam Singh Yadav was the chief minister of the UP.

Overview

The Central government allocates foodgrains to each state government for distribution through ration shops at

subsidised rates to the poor. Under the PDS scheme, each BPL (Below Poverty Line) family is eligible for 35 kg

of rice or wheat every month, while an APL (Above Poverty Line) household is entitled to 15 kg of foodgrains

on a monthly basis.

According to a report in Outlook magazine:

“Instead of using the Food Corporation of India and the Shipping Corporation the Government cleared a private company to send the rice and earn the profits. Rice sent to Sierra Leone had a Swiss company named Novell as the buyer. 1, 17, 000 tonnes of rice was sent to Nigeria which had a bumper crop and refused to accept the rice. Then the rice was diverted to South Africa which has higher per capita income than India. The African countries could have been just a front to sell the rice in international markets. "But the rice did not even reach the desired African countries. It went somewhere else and resulted in an escalation of the international prices,” Rajya Sabha MP D Raja said. ”

History

The Regional Food Controller's office in the state is responsible for procuring the foodgrain, while the District

Rural Development Agency (DRDA) is in charge of its distribution. An embezzlement by a section of officers

from the controller's office made news in March 2004, after 70 truckloads of rice meant for distribution was

lifted from the Food Corporation of India (FCI) and when FCI demanded its payment, a project director refused

to verify the stock register, gradually it was revealed that they had been selling the grains in the black market

and a probe was ordered. As per initial estimates at the time, foodgrain worth Rs 15,000 crore could have been

diverted from the Antyodaya Yojana (food-for-work scheme) over the last five years. By December 2004, Chief

Minister Mulayam Singh Yadav had suspended a district magistrate ofLakhimpur Kheri and several officials of

the food department and political parties including the CPI, Congress and BJP were increasing pressure on the

government to order a CBI probe. 

First FIRs in the case were filed in January 2005, when the state government acknowledged the scam to be

worth Rs. 45,000 crore under the Central government sponsored Antyodaya Anna Yojana (AAY). Apart 65

officials named in the FIR, further over 300 persons were suggested to involve in the preliminary reports. Apart

from that a district magistrate, six ADMs and a few district food and supplies officials were suspended.

In April 2007, Union Minister, Kapil Sibal demanded a probe by the Central Bureau of Investigation (CBI) into

the illegal sale by private traders who procured the grains from the warehouses of Food Corporation of India,

diverting food grains allotted to the state for the poor. Alleging that the scam took place from August to

November 2004, when Rajpal Tyagi was leading the Rural Development ministry. At first the scam was

investigated by the Economic Offences Wing (EOW) of the Uttar Pradesh Police (UPP), followed by a Special

Investigation Team (SIT) set up by the Mulayam Singh government, after its investigations in three districts,

Sitapur, Lakhimpur Kheri and Gonda, SIT lodged over 5,000 FIRs.

When Mayawati became Chief Minister, SIT investigations had revealed the scam to be larger in scale and

multi-dimensional, covering many welfare schemes like Antyodaya, Sampurana Grameen Swarojgar

Yojna during 2002-2005, thus a CBI inquiry on ordered December 1, 2007; the scam was now worth Rs.

35,000 crore. 

Two years later in early December 2009, CBI lodged 9 cases, identifying nearly 150 government officials,

including some PCS officer as accused; in all nine people were arrested, with one of them being the chief

finance and accounts officer of the District Rural Development Authority (DRDA) in Ballia and his junior.[14]

The Lucknow Bench of the Allahabad High Court, responding to a PIL, on December 23, 2009, directed the

Uttar Pradesh government to file a status report on all the nine food grain scams in the state from 2000 till

January 8, 2010 being investigated by the CBI.

On December 3, 2010, the Lucknow Bench of the Allahabad High Court, responding to public interest

litigation (PIL) filed by advocate Vishwanath Chaturvedi, directed the Central Bureau of Investigation (CBI) to

conduct and complete an inquiry within six months, into the foodgrain scam in Gonda,

Lucknow, Varanasi, Ballia, Lakhimpur and Sitapur districts. It also stated, that "It shall not be necessary for the

CBI or state agencies to obtain sanction under the statutory provision with regard to present controversy where

from initial stage, prima facie intentionally, deliberately and in a planned manner, the foodgrains were lifted

from godowns for sale either in the open market or to smuggle outside UP or to other countries, "  The bench

also asked the Centre and Uttar Pradesh government, to consider appropriate amendments in the "Prevention

of Corruption Act, 1988. Though period under investigation is till 2007, the court also directed that "it should be

open to the CBI and state agencies to proceed with investigation with regard to the scam not only up to 2007

but even beyond in case some link evidence/material is found with regard to continuance of diversion of

foodgrain under various schemes of the state and Central governments."

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6) Pratap Singh KaironFrom Wikipedia, the free encyclopedia

Pratap Singh Kairon (1901–1965) was the Chief Minister of the Punjab province (then comprising

Punjab, Haryana and Himachal Pradesh), and is widely acknowledged to be the architect of post-

Independence Punjab Province(or Punjab, Haryana and Himachal as of today). Moreover, he was an Indian

independence movement leader. He was jailed twice by the British Empire, once for five years for organising

protests against British rule. His political influence and views are still considered to dominate Punjabi politics,

sometimes called the "father of modern Punjabi politics".

Early life

Pratap was born on October 4, 1901, into a Sikh family in the village of Kairon, the Amritsar district, province

of Punjab during the British Raj. His father, Nihal Singh Kairon, was a pioneer in initiating women's education in

the province. Pratap studied at the Khalsa College, Amritsarand then went to the U.S., where he supported

himself with work on farms and factories. He did his Masters in political science from theUniversity of

Michigan.He also did his Masters in Economics from University of California at Berkeley before going to

Michigan. He was influenced by farming methods practised in the U.S.A and hoped to replicate the same

in India later.

Political career

Entry into politics and contribution to Indian independence movement

Kairon returned to India in 1929. On April 13, 1932 he started an English weekly paper The New Era in

Amritsar. He joined politics and the newspaper eventually shut down. He was at first, a member of

the Shiromani Akali Dal and later of the Indian National Congress. He was jailed in 1932 for five years for

participating in the Civil disobedience. He entered the Punjab Legislative Assembly as an Akali nominee in

1937, defeating the Congress candidate, Baba Gurdit Singh of Sarhali.

From 1941 to 1946, he was the general secretary of the Punjab Provincial Congress Committee. He was jailed

again in the 1942 Quit India Movement and was elected to the Constituent Assembly in 1946.

In power

After Independence in 1947, Pratap Singh Kairon held various offices in the elected state government including

Rehabilitation Minister, Development Minister (1947–1949) and Chief Minister (1952–1964).

Minister for Rehabilition

As Minister for Rehabilitation in the days immediately after the Partition, Kairon ended the chaos and confusion

and handled the tough task of resettlement of millions of refugees who had migrated from West Punjab. Over

three million people were re-established in East Punjab in new homes and often in new professions, in a very

short period of time.

Chief Minister

Pratap Singh Kairon was a man of vision. He laid the base on which Punjab prospered. In his role in

implementing land reforms, the late leader established the Punjab Agricultural University, which played a key

role in the Green Revolution. He also placed Punjab on the industrial map of the country. He was behind the

creation of the city of Chandigarh and the industrial township of Faridabad (in present-day Haryana). Kairon

made primary and middle school education free and compulsory. He opened three engineering colleges and a

polytechnic in each district. He was responsible for establishing much of the state's basic infrastructure in terms

of irrigation, electrification and roads. Punjab was the first state in the Indian Union to have all its villages

electrified.

Charges of Corruption

He and his family members were accused of corruption. A judicial inquiry into the charges against Kairon was

held after an indictment was handed out by the Supreme Court in a case filed by a Punjab Civil Surgeon. It was

the first judicial inquiry into charges of corruption, setup against a Chief Minister, in office, by the Government

of India.

The commission concluded that "There is no getting away from the fact that S. Pratap Singh Kairon knew or

had ample reason to suspect that his sons and relatives were allegedly exploiting his influence and powers... In

view of his inaction in the face of the circumstances here in before eluded to, he must be held to have connived

at the doings of his sons and relatives, his colleagues and the government officers."

Kairon's initial reaction was to stick to his office in spite of the adverse verdict. But when Lal Bahadur

Shastri got the report published, Kairon had no option but to quit.[1]

Demise

In 1964, following the publication of the report of the commission of enquiry which had exonerated him of the

bulk of the allegations made against him by his political adversaries, Pratap Singh Kairon resigned from his

position as chief minister of the Punjab. On February 6, 1965, he was assassinated by Sucha Singh, in his car

on the main highway (the G.T. Road) from Delhi to Amritsar. Sucha Singh was later hanged.

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Belekeri port scamThe Belekeri port scam relates to 3.5 million tons of confiscated iron ore that was exported illegally

from Belekeri port near Karwar inKarnataka. After Deputy Conservator of Forests R. Gokul seized the ore and

the high court refused to permit it to be exported, a large part of it was surreptitiously exported from the port.

After persistent protests and public pressure, Karnataka Chief Minister Yeddyurappa, who is balancing political

considerations with control of corruption, admitted to an illegal iron-ore export racket at Belekeri Port involving

35 lakh metric tonnes of iron ore. It is said that the scam was worth an estimated 60,000 crore rupees (US$12

billion).

This iron ore from the Bellary region is alleged to have been illegally mined after paying a minuscule royalty to

the government. The major irregularities involve mines in Bellary, including those of Obulapuram Mining

Company owned by G. Karunakara Reddy and G. Janardhana Reddy, who are ministers in the Government of

Karnataka.[7] A report constituted by the LokAyukta uncovered major violations and systemic corruption in

mining in Bellary, including in the allowed geography, encroachment of forest land, massive underpayment of

state mining royalties relative to the market price of iron ore and systematic starvation of government mining

entities.This report was finalized and prepared with inputs from the Income Tax Department's Commissionerate

of Central Circle.

Justice N. Santosh Hegde resigned from the Lokayukta position on 23 June 2010 after an honest officer

(Deputy Conservator of Forests R Gokul) was suspended by order of minister J. Krishna Palemar and he felt

powerless to help. He expressed inability to be effective in his anti-corruption mandate owing to a non-

cooperative Government of Karnataka. Amid media speculation that the ports minister Krishna Palemar had

recommended Gokul's suspension on behalf of some politicians with business interests, Palemar defended his

recommendation to suspend Gokul, saying Gokul had failed to attend a meeting, and "this raised suspicions

that he too might have had a role to play in this particular incident. Because of this I recommend that he be

placed under suspension".

Hegde's resignation sought to underline the helplessness of the advisory post of the Lokayukta in such

situations. The resignation has brought considerable public attention on the scam, whose existence the

government has also been forced to admit.

Related road damage, accidents and loss of lives

The lack of effective regulation in the mining and transport of iron ore has adversely impacted road safety in

addition to the loss of revenue and environmental denudation due to illegal mining. Overloaded trucks carrying

ore have caused hundreds of fatal accidents on the roadways leading to ports such as Belekeri. As many as

114 accidents were reported in 2007, and 174 in 2008. There are also reports of severe damage to the roads in

Karnataka, including national highways NH-17, NH-48 and NH-63, near Shimoga.

Lokayukta Report of July 2011

The chapter 2 of the Lokayukta Report on illegal mining in Karnataka details the method in which the Belekeri

Port was the anchor point of export of illegally mined iron ore. The report mentions the involvement of private

companies – Shree Mallikarjun Shipping Pvt Ltd (SMSPL), Adani Enterprises Ltd, Salgaonkar Mining Industries

Pvt Ltd and Raj Mahal Silks in large scale illegal exports of ore.

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7) Fodder ScamThe Fodder Scam involved hundreds of millions of dollars in alleged fraudulent reimbursements from the treasury

of Bihar state for fodder, medicines and husbandry supplies for non-existent livestock.

The Fodder Scam  was a corruption scandal that involved the embezzlement of about  950 crore (US$209

million) from the government treasury of the eastern Indian state of Bihar.[1] Among those implicated in the theft

and arrested were then Chief Minister of Bihar, Laloo Prasad Yadav, as well as former Chief

Minister, Jagannath Mishra. The scandal led to the end of Laloo's reign as Chief Minister.

The theft spanned many years, and allegedly involved numerous Bihar state's administrative and elected

officials across multiple administrations of the Indian National Congress and theJanata Dal parties. The

corruption scheme involved the fabrication of "vast herds of fictitious livestock" for which fodder, medicines

and animal husbandry equipment was supposedly procured. Although the scandal broke in 1996, the theft had

been in progress, and increased in size, for over two decades. Besides the magnitude and duration of the theft,

the scam was and continues to be covered in Indian media due to the extensive nexus between tenured

bureaucrats, elected politicians and businesspeople that it revealed, and as an example of the mafia raj that

has penetrated several state-run economic sectors in the country.

The scam

The scam had its origins in small-scale embezzlement by some government employees submitting false

expense reports, which grew in magnitude and drew additional elements, such as politicians and businesses,

over time, until a full-fledged mafia had formed Jagannath Mishra, who served his first stint as the chief minister

of Bihar in the mid-1970s, was the earliest chief minister to be accused of knowing involvement in the scam.

In February 1985, the then Comptroller and Auditor General of India, T.N. Chaturvedi, took notice of delayed

monthly account submissions by the Bihar state treasury and departments and wrote to the then Bihar chief

minister, Chandrashekhar Singh, warning him that this could be indicative of temporary embezzlement. This

initiated a continuous chain of closer scrutiny and warnings by Principal Accountant Generals (PAGs) and

CAGs to the Bihar government across the tenures of multiple chief ministers (cutting across party affiliations),

but the warnings were ignored in a manner that was suggestive of a pattern by extremely senior political and

bureaucratic officials in the Bihar government. In 1992, Bidhu Bhushan Dvivedi, a police inspector with the

state's anti-corruption vigilance unit submitted a report outlining the fodder scam and likely involvement at the

chief ministerial level to the director general of the same vigilance unit, G. Narayan. In alleged reprisal, Dvivedi

was transferred out of the vigilance unit to a different branch of the administration, and then suspended from

his position. He was later to be a witness as corruption cases relating to the scam went to trial, and reinstated

by order of the Jharkhand High Court.

Exposure and investigation

Laloo Prasad Yadav, then chief minister of Bihar, was a prime accused in the fodder scam investigation.

On January 27, 1996, the deputy commissioner of West Singhbhum district, Amit Khare, acted on information

to conduct a raid on the offices of the animal husbandry department in the town of Chaibasa in the district

under his authority. The documents his team seized, and went public with, conclusively indicated large-scale

embezzlement by an organized mafia of officials and businesspeople. Laloo ordered the constitution of a

committee to probe the irregularities. There were fears that state police, who is accountable to the state

administration and the probe committee, would not investigate the case vigorously, and demands were raised

to transfer the case to the Central Bureau of Investigation (CBI), which is under federal rather than state

jurisdiction. Allegations were also made that several of the probe committee members were themselves

complicit in the scam. A public interest litigation was filed with the Supreme Court of India, which led to the

court's involvement, and based on the ultimate directions issued by the supreme court, on March 1996,

the Bihar High Court ordered that the case be handed over to the CBI.

An inquiry by the CBI began and, within days, the CBI filed a submission to the High Court that Bihar officials

and legislators were blocking access to documents that could reveal the existence of a politician-official-

business mafia nexus at work.[14] Some legislators of the Bihar Legislative Council responded by claiming the

court had been misinformed by the CBI and initiating a privilege motion to discuss possible action against

senior figures in the regional headquarters of the CBI, which could proceed similar to a contempt of

court proceeding and result in stalling the investigation or even prosecution of the named CBI

officials. However, U N Biswas, the regional CBI director, and the other officials tendered an unqualified

apology to the Legislative Council, the privilege motion was dropped, and the CBI probe continued. As the

investigation proceeded, the CBI unearthed linkages to the serving chief minister of Bihar, Laloo Prasad

Yadav and, on May 10, 1997, made a formal request to the federally-appointed governor of Bihar to prosecute

Laloo (who is often referred by his first name in Indian media). On the same day, a businessman, Harish

Khandelwal, who was one of the accused, was found dead on train tracks with a note that stated that he was

being coerced by the CBI to turn witness for the prosecution. The CBI rejected the charge and its local director,

U N Biswas, kept the appeal to the governor in place.

Path to prosecution

A few days of uncertainty followed the CBI's request to the state governor to prosecute the chief minister. The

governor, A. R. Kidwai, was accountable to the federal government, and had already stated that he would need

to be satisfied that strong evidence against Laloo existed before he would permit a formal indictment to

proceed.[16] The federal government, led by newly appointed prime minister Inder Kumar Gujralwho had just

succeeded the short-lived government of the previous prime minister HD Deve Gowda, consisted of

a coalition that depended on support from federal legislators affiliated with Laloo for its survival. It was also

unclear why the CBI had sought the governor's consent in the first place and, when the High Court demanded

to know why it was being sought, the CBI stated that it was a "precautionary measure." The High Court,

questioning the tactic, warned that it would allow some time for the permission to transpire, but if it sensed a

delay, it would force a prosecution on its own authority.

On June 17, the governor gave permission for Laloo and others to be prosecuted. Five senior Bihar

government officials (Mahesh Prasad, science and technology secretary; K. Arumugam, labour secretary; Beck

Julius, animal husbandry department secretary; Phoolchand Singh, former finance secretary; Ramraj Ram,

former AHD director), the first 4 of whom were IAS officers, were taken into judicial custody on the same day.

The CBI also began preparing a chargesheet against Laloo to be filed in a special court. Expecting to be

accused and imprisoned, Laloo filed an anticipatory bail petition, which the CBI opposed in a deposition to the

court, listing the evidence against Laloo. Also, on June 21, fearing that evidence and documentation that might

prove essential in further exposing the scam were being destroyed, the CBI conducted raids on Laloo's

residence and those of some relatives suspected of complicity.

On June 23, the CBI filed chargesheets against Laloo and 55 other co-accused, including Chandradeo Prasad

Verma (a former union minister), Jagannath Mishra (former Bihar chief minister), two members of

Laloo's cabinet (Bhola Ram Toofani and Vidya Sagar Nishad), three Bihar state assembly legislators (RK Rana

of the Janata Dal, Jagdish Sharma of the Congress party, and Dhruv Bhagat of the Bharatiya Janata Party) and

some current and former IAS officers (including the 4 who were already in custody). Mishra was granted

anticipatory bail by the Bihar state High Court. Laloo's anticipatory bail petition, however, was rejected by the

same court, and he appealed to the Supreme Court, which resulted in a final denial of bail on July 29. On the

same day, Bihar state police were ordered to arrest him. The next day, he was jailed. Later, the Bihar Director

General of Police, SK Saxena, justified the one-delay delay in arresting Laloo by stating in court that "any

precipitate action would have led to police firing and killing of a large number of people."

End of Laloo's chief ministership

As it became evident that Laloo would be engulfed in the scandal and its prosecution, demands for him to be

removed from the chief ministership had gained momentum both from other parties, as well as within Laloo's

own party, the Janata Dal. On July 5, Laloo formally parted ways with the Janata Dal and formed his own party,

the Rashtriya Janata Dal (or RJD), taking with him virtually all the Janata Dal legislators in the Bihar state

assembly, and winning a vote of confidence in the state assembly a few days later. The RJD continued to

support the coalition federal government, however.  With demands for his resignation continuing to mount, on

July 25, Laloo resigned from his position, but was able to install his wife, Rabri Devi as the new chief minister

on the same day. On July 28, Rabri's new government successfully won another trust vote in the Bihar

legislature by a 194-110 vote, thanks to the Congress and Jharkhand Mukti Morcha parties voting in alignment

with the RJD.

Laloo claimed he had been instrumental in helping HD Deve Gowda become the prime minister. However,

there was press speculation that Gowda held a grudge against Laloo for insisting that Gowda step down when

Gowda's fledgling government ran into internal coalition squabbles, and this motivated him to push CBI

Director Joginder Singh for Laloo's prosecution. Much later, in 2008, Laloo also claimed that Deve Gowda

confessed, and "wept and fainted," when Laloo confronted him on inciting the CBI to pursue the

prosecution. Looking retrospectively, Laloo has said that the scam had a lasting negative impact on his political

career, and may have ended his prospects to one day be prime minister of India.

There were reports that Joginder Singh had violated norms in keeping the new prime minister, IK Gujral, in the

dark as he pursued the prosecution. Gujral's own new government also depended on Laloo for support in

parliament, and Joginder Singh later alleged that Gujral had attempted to block the scam investigation from

proceeding. On June 30, the federal government issued orders to transfer Singh out of the CBI and into the

Home Ministry as a Special Secretary, which was technically a promotion but also had the effect of removing

him from the investigation. There was also an alleged follow-on move to transfer UN Biswas, the regional CBI

director, which led to the High Court warning that it would act to disallow any such transfer.

Prosecution

As the CBI discovered further evidence over the following years, it filed additional cases related to fraud and

criminal conspiracy based on specific criminal acts of illegal withdrawals from the Bihar treasury. Most new

cases filed after the division of Bihar state (into the new Bihar and Jharkhand states) in November 2000 were

filed in the new Jharkhand High Court located in Ranchi, and several cases previously filed in the Bihar High

Court in Patna were also transferred to Ranchi. Of the 63 cases that the agency had filed by May 2007, the

majority were being litigated in the Ranchi High Court.

Laloo's initial chargesheet, filed by the CBI on 27 April 1996, was against case RC 20-A/96, relating to

fraudulent withdrawals of  37 crore (US$8.14 million) from the Chaibasa treasury of the (then) Bihar

government, and was based on statutes including Indian Penal Code sections 420 (cheating) and 120(B)

(criminal conspiracy), as well as section 13(2) of the Prevention of Corruption Act, 1988. Even though he had

been jailed, he was kept in relative comfort at the Bihar Military Police guest house. After 135 days in judicial

custody, Laloo was released on bail on December 12, 1997.  The next year, on 28 October 1998, he was

rearrested on a different conspiracy case relating to the fodder scam, at first being kept in the same guest

house, but then being moved to Patna's Beur jail when the Supreme Court objected. After being granted bail,

he was rearrested yet again in a disproportionate assets case on 5 April 2000. His wife and then Chief Minister

Rabri Devi was also asked to surrender on that date, but then immediately granted bail. This stint in prison

lasted 11 days for Laloo, followed by a one-day imprisonment in another fodder scam case on 28 November

2000.

Jagannath Mishra had been permitted bail in June 1997, and avoided judicial remand when Laloo was first

detained in July 1997. However, he was taken into custody on 16 September of the same year. He was freed

on bail on 13 October but then remanded again, at the same time as Laloo, on October 28, 1998, when he was

kept at the same guest house as Laloo, and later shifted to Beur jail along with him. Mishra was freed on bail

on December 18, but then rearrested in a different fodder scam case on 7 June 2000.

Due to the multiplicity of cases, Laloo Yadav, Jagannath Mishra, and the other accused have been remanded

several times in the years since 2000. In 2007, 58 former officials and suppliers were convicted, and given

terms of 5 to 6 years each. As of May 2007, about 200 people had been punished with jail terms of between 2

and 7 years.  A 2005 litigation of one of the cases (RC 68-A/96) in the Ranchi High Court involved over 20

truckloads of documents.

Impact

Since it broke into public light, the fodder scam has become symbolic of bureaucratic corruption and the

criminalization of politics in India generally, and in Bihar in particular. It has been called a symptom of the "deep

and chronic malady afflicting the Bihar government and quite a few other state governments as well." In

the Indian parliament, it was cited as an important indicator of the deep inroads made by mafia rajin the politics

and economics of the country.  Reference has also been made to the anarchic nature of governance (the

"withering away of the state") that occurs when a mafia develops in a state-controlled sector of the economy.[52]

Laloo Prasad Yadav is the only person on whom the Lok Sabha debated for a complete session as the official

agenda.