the fodder scam

8/10/2019 The Fodder Scam

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The Fodder Scam

If you havent heard of Bihars fodder scam of 1996, you might still be able to

recognize it by the name of Chara Ghotala, as it is popularly known in the

vernacular language.

In this corruption scandal worth Rs.900 crore, an unholy nexus was traced involved in

fabrication of vast herds of fictitious livestock for which fodder, medicine and

animal husbandry equipment was supposedly procured.

Among those implicated in the theft and arrested were thenChief 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 theIndian

National Congressand theJanata Dalparties. The corruption scheme involved the

fabrication of "vast herds of fictitious livestock" for which fodder, medicines

andanimal husbandryequipment 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,
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elected politicians and businesspeople that it revealed, and as an example of the mafia

rajthat 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 thechief minister of

Biharin the mid-1970s, was the earliestchief ministerto be accused of knowing

involvement in the scam.

In February 1985, the thenComptroller and Auditor Generalof 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 wentto trial, and reinstated by order of theJharkhand High Court.
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Exposure and Investigation

Laloo Prasad Yadav,thenchief ministerofBihar,was a prime accused in the fodder

scam investigation.

On January 27, 1996, thedeputy commissionerofWest Singhbhumdistrict, Amit

Khare, acted on information to conduct a raid on the offices of the animal husbandry

department in the town ofChaibasain 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, which 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 theCentral 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. Apublic interest litigationwas filed

with theSupreme Court of India,which led to the court's involvement,and based on

the ultimate directions issued by the supreme court, on March 1996, theBihar High

Courtordered that the case be handed over to the CBI.
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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. Some

legislators of the BiharLegislative Councilresponded by claiming the court had been

misinformed by the CBI and initiating aprivilege motionto discuss possible action

against senior figures in the regional headquarters of the CBI, which could proceed

similar to acontempt of courtproceeding 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 Yadavand, on May 10, 1997, made a formal request to the

federally-appointedgovernorof 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.

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."[50]

In theIndian

parliament,it was cited as an important indicator of the deep inroads made bymafia

rajin the politics and economics of the country.[51]

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 theLok Sabhadebated for a

complete session as the official agenda.
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the fodder scam

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