The Fodder Scam was a corruption scandal that involved the embezzlement of about from the government treasury of the east Indian state of Bihar.'Fodder Scam' Could Bring Down a Shaky Indian Government, The New York Times, 1997-07-02. Accessed 2008-10-29. "... the scandal, said to involve $285 million, occurred in one of the country's poorest regions, the eastern state of Bihar. The money, which is reported to have been stolen over nearly 20 years, came from agricultural support programs aimed mainly at helping the 350 million Indians who live in extreme poverty ..." Among those implicated in the theft and arrested were then the chief minister of Bihar, Lalu Prasad Yadav, as well as former chief minister Jagannath Mishra. The scandal led to the end of Yadav's reign as chief minister. Dineshwar Prasad Sharma is also alleged to have received ₹300.60 crore from S. N. Sinha. On 23 December 2017, Yadav was convicted by a special CBI court, whereas Misra was acquitted.
The theft spanned many years, and allegedly involved numerous administrative and elected officials of Bihar State across multiple administrations of the Indian National Congress and the Janata 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.Lok Sabha, "Lok Sabha Debates, ser.11 Aug 26–30 1997 v.17 no.18-23", Lok Sabha Secretariat, Lok Sabha (House of the People), Parliament of India, 1999. Snippet: ... The leakages are such that no benefit is accruing to the intended beneficiaries. There is a lot of corruption, not only under this Government's rule, but it has been there for quite a long time. But of late, because of the financial problem, corruption has increased appallingly. There is also the Letter of Credit scandal which is a kind of a younger sister of the chara-ghotala of Bihar. This scandal also relates to the Animal Husbandry Department, but the CBI is dragging its feet ... Although the scandal broke in 1996, the theft had been in progress, and increased in size, for over two decades.Stifling dissent: PM’s lost kavach, The Tribune, 2002-01-22. Accessed 2008-10-31. "... Laloo has never been the kingpin but was one of the main beneficiaries of the fake purchase and distribution of the non-existent fodder for about 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 among tenured bureaucrats, elected politicians and businesspeople that it revealed,क्या है चारा घोटाला? What is the fodder scam?, BBC, 2001-12-14. Accessed 2008-10-29. "... सीबीआई के अनुसार, राज्य के ख़ज़ाने से पैसा कुछ इस तरह निकाला गया- पशुपालन विभाग के अधिकारियों ने चारे, पशुओं की दवा आदि की सप्लाई के मद में करोड़ों रूपए के फ़र्जी बिल कोषागारों से वर्षों तक नियमित रूप से भुनाए. (According to the CBI, animal husbandry officials pilfered crores of rupees from the state treasury by filing bogus expense reports for fodder, medicines and other animal supplies) ... सीबीआई का कहना रहा है कि ये सामान्य आर्थिक भ्रष्टाचार का नहीं बल्कि व्यापक षड्यंत्र का मामला है जिसमें राज्य के कर्मचारी, नेता और व्यापारी वर्ग समान रूप से भागीदार है. मामला सिर्फ़ राष्ट्रीय जनता दल तक सीमित नहीं रहा. इस सिलसिले में बिहार के एक और पूर्व मुख्यमंत्री डॉक्टर जगन्नाथ मिश्र को गिरफ़्तार किया गया. राज्य के कई और मंत्री भी गिरफ़्तार किए गए. ... (This is not a normal case of economic corruption, says the CBI, but rather a pervasive conspiracy to steal in which state bureaucrats, elected leaders, and businesspeople were equal accomplices. Culpability is not limited to the Rashtriya Janata Dal party. A prior chief minister of Bihar, Dr. Jagannath Mishra, has also been arrested as have other state ministers.) ..." and as an example of the Mafia Raj that has penetrated several state-run economic sectors in the country.
As of May 2013, the trial was completed in 44 out of a total of 53 cases. More than 500 accused have been convicted and awarded punishments by various courts.
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 (CAG), 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 accountants general (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.Joginder Singh, "Inside CBI", Chandrika Publications, 1999, . In alleged reprisal, Dvivedi was transferred out of the vigilance unit to a different branch of the administration, and then suspended from service. 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
The Bihar Veterinary Association (BVA) for the first time exposed Animal Husbandry Mafia in its 1985 press conference. In 1990 the BVA's executive committee was changed and Dr Dinneshwar Prasad Sharma was made the general secretary of the BVA. Once the mafia had control over the association, they went all guns blazing. At that point, Dr. Dharmendra Sinha and Dr. Biresh Prasad Sinha (the ex-office bearers of the BVA) started collecting and gathering information against this whole unethical practice of Mafia. They exposed this to all the political guns of Bihar. Among all these political guns was Sushil Kumar Modi, who initiated the whole episode after it was broken out by V S Dubey. The then charismatic yet "native" leader Yadav was the chief minister of undivided Bihar, where the then-finance commissioner Dubey stumbled upon the financial irregularities of a massive scale.
In 1992, then-Police Inspector Bidhu Bhushan Dvivedi, who was with the state Vigilance Department, submitted a detailed report highlighting the inclusion of high-profile persons including the chief minister and others. His reports were ignored and he was transferred to another department and was slapped with multiple frivolous inquiries and suspension. He was also threatened by bomb-hurling at his residence so as to stay away from participating in investigations. Although the scam was later picked by other authorities and persons of interests, Dvivedi was never given true credit for unearthing the biggest scam while being in a subordinate rank with true compassion and honesty.
On 19 January 1996, State Finance Secretary Dubey ordered district magistrates and deputy commissioners of all districts to go into cases of excessive withdrawals. He followed it up on 20 January 1996 by dispatching one of his additional secretaries to make an enquiry of the excessive drawls of money by Animal Husbandry department from Ranchi treasury. The enquiry revealed a whole scale loot of government money; drawn fraudulently by forged documents. Then on 27 January 1996, the deputy commissioner of West Singhbhum district, Amit Khare, acted on direction from Vijai Shankar Dubey 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 organised mafia of officials and business people. The news of fodder scam was first broken out by Indian journalist Ravi S Jha, who working with the Asian Age then in Calcutta, named the then-Bihar chief minister of having implicit involvement in the scam. Based on evidence he collected from Chaibasa, Jha not only found out widespread involvement of Bihar government machinery in the scam, but also even mentioned how earlier governments too were taking advantage of a shoddy system, where top government officials along with the ministers were flouting norms to make money illegally. Jha, an associate director of Public Affairs, is currently working with anti-corruption crusader and good governance promoter Rajeev Chandrasekhar, the Rajya Sabha Member of Parliament. Yadav ordered the constitution of a committee to probe the irregularities.
There were fears that state police, who were 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, in March 1996, the Patna 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. 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, Lalu Prasad Yadav and, on 10 May 1997, made a formal request to the federally-appointed Governor of Bihar to prosecute Lalu (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. An income tax Investigation also blamed Lalu for the scam. On 8 May 2017, In a major setback for RJD leader Lalu Prasad Yadav, the Supreme Court has ordered separate trials in all four cases registered against him in the Rs. 1,000 crore fodder scam. Because the Supreme Court was hearing a CBI plea challenging the Jharkhand High Court's dropping of conspiracy charges against Yadav, the higher court asked the trial court to complete the trial in nine months.
Path to prosecution