Lalu’s nemesis

Print edition : November 01, 2013

Lalu Prasad, Rashtriya Janata Dal leader and former Chief Minister of Bihar, at the CBI court in Ranchi. Photo: Manob Chowdhury

A CBI special court convicts Lalu Prasad on the basis of circumstantial evidence. In the present economic environment, the corrupt politician-bureaucrat-contractor nexus can cause even greater damage to the polity than the fodder scam.

THE conviction of Lalu Prasad and Jagannath Mishra, two former Chief Ministers of Bihar, by the Central Bureau of Investigation (CBI) special court in Ranchi on October 3 in the fodder scam case, opened a Pandora’s box. The verdict not only underlined the increasing criminalisation of politics but exposed the manifold ways in which an ubiquitous but invisible corrupt nexus of bureaucrats, politicians and private contractors works in a State administration. The 700-page judgment of Special Judge Pravas Kumar Singh has become the most pertinent example of how corruption in the legislative and executive bodies is often guided by the business interests of a few individuals.

The verdict is significant as Lalu Prasad, a sitting Member of Parliament, faces immediate disqualification and will be rendered ineligible to contest any election for at least six years. He is the second MP to be disqualified on the basis of the recent Supreme Court order. In a ruling delivered in July, the court struck down Section 8 (4) of the Representation of the People Act (RPA) and mandated that elected representatives convicted of any criminal charge should face immediate disqualification. Section 8 (4) had provided an additional layer of immunity to lawmakers to retain their seats upon conviction if they could appeal to a higher court within 90 days.

Rasheed Masood, Congress member of the Rajya Sabha, was the first MP to be disqualified under the apex court order. Masood was found guilty of fraudulently nominating undeserving candidates to seats in medical colleges across the country when he was Union Health Minister in V.P. Singh’s government during 1990-91.

While the verdict quashing Section 8(4) will help raise the level of accountability in the Indian political system, it will also significantly alter the political landscape of Bihar in the coming years.

Lalu Prasad was the Chief Minister of the State between 1990 and 1997. He resigned in 1997 following corruption charges relating to the fodder scam and disproportionate assets cases but continued to be at the helm of affairs until 2005 when his wife Rabri Devi was Chief Minister. Lalu Prasad emerged as a social justice hero during Jayaprakash Narayan’s “Total Revolution” in the 1970s. By the 1990s, he had established himself as a mass leader of a substantial Yadav population in Bihar. By forging a powerful Yadav-Muslim alliance, he ended the dominance of the upper-caste Bhumihar-Brahmin-Rajput-Kayastha alliance in the State’s politics. As is famously held, he gave the backward classes swar (voice) and samman (dignity). Bihar remained free of communal riots during his tenure. Many observers believe that Lalu Prasad’s political masterstroke was that he united the traditional adversaries, Yadavs and Muslims.

However, rampant corruption and the absence of a sustainable governance model began to take their toll on the State. The high-handedness of Lalu Prasad and his power-hungry family members caused public outrage. It is in this context that the chara ghotala (fodder scam), involving the embezzlement of some Rs.950 crore from the State treasury, was exposed. It was alleged that huge amounts of fodder was shown to be procured for a large number of fictitious livestock over a period of 10 years. While corrupt practices were known to be rampant in his administration, what was shocking about the fodder scam in monetary terms was its magnitude. Since the allegations were against top officials and politicians, including the two Chief Ministers, the case was referred to the CBI in 1996.

Out of the 53 fodder scam cases registered by the CBI in 1996, 44 have been disposed of. Most of the accused have already been convicted. Of the remaining nine cases, Lalu Prasad is named as an accused in five. The October 3 judgment pertained to a case of fraudulent withdrawal of Rs.37.7 crore in 1996 from the treasury of Chaibasa district in undivided Bihar. Fifty-six people have been named accused in the case. In the intervening years of the trial, seven accused died, two turned approvers, one admitted to the crime, and one was discharged. The remaining 45, including senior Indian Administrative Services (IAS) officers, officials of the Animal Husbandry Department (AHD), private contractors and politicians, were convicted by the special court. Four politicians—Lalu Prasad; Jagannath Mishra; Jagdish Sharma; a sitting Janata Dal (United) MP; and R.K. Rana, a former Rashtriya Janata Dal (RJD) legislator—were held guilty. While Lalu Prasad and Rana were sentenced to five years’ rigorous imprisonment, the other two were awarded four-year jail terms. The court held that S.B. Sinha, the then Regional Director of the AHD, was the kingpin of the scam but could not bring him to trial as he had died.

More than the convictions, the judgment is significant for its observation on the methods deployed by a few powerful people to siphon off public money. The judge noted: “...it [fodder scam] is first in the series of such scams.... It is unique in the sense that public money was being siphoned through the government treasury with the help of fake allotment letters and by flouting the rules, while in other scams the money to be deposited in the treasuries were not deposited by the way of flouting the rules.” He added that since it was difficult to find direct evidence of the involvement of politicians and top officials in such cases, circumstantial evidence became important, but only if it could be established through a chain of events pointing to a conspiracy. The verdict tries to establish how government officials, private contractors and politicians were hand in glove in siphoning off state funds. Most of the proof of the scam came from the fake bills and accounts seized by the CBI.

The judgment said: “It has been brought on record that the expenditure made by the DAHO [District Animal Husbandry Office] was far in excess [about 243 per cent] of the actual allotment.” It said the cattle population in the State was inflated and this enabled the officials to give fake orders to procure fodder. While normally fodder for livestock comprises mostly hay, the AHD had ordered huge quantities of costly yellow maize, wheat bran, groundnut cake and fish meal as cattle food. The fake bills proved that fodder 1,000 to 27,000 per cent in excess of what was actually required was ordered. A fake demand for medicines, fodder, and other livestock-management products was created, which helped the officials to demand and release money from the treasury.

The judge accepted the CBI’s evidence that government officials and politicians received kickbacks and “gratification in terms of luxurious holidays, flight tickets, etc.” from the suppliers. The judge observed that politicians were complicit in the crime to the extent that they gave extension of service to the many officials in the AHD who are implicated in the crime. The judgment pointed out the State government had not answered any of the queries raised by the Accountant General, about the functioning of the AHD.

The judge decided to convict all the accused on the basis of five points that proved their direct and indirect involvement in the scam. First, supply orders were given to the suppliers without proper indent. Secondly, 78 fake allotment letters were prepared on the basis of which bills were passed. The allotment shown to be issued through allotment letters for Chaibasa district alone was far in excess of the budgetary provision made for the entire State. Thirdly, medicines said to be supplied were found not to have been even manufactured. Fourthly, the godowns where the food was said to have been stored did not have the storage capacity for such a huge quantity of feed. Finally, to cover up the excessive supply of food/feed, it was shown to be transferred to different districts for supply to beneficiaries under the free distribution scheme although no such government scheme was available.

The corruption, which began during Jagannath Mishra’s tenure, continued unabated after Lalu Prasad came to power. Since Lalu Prasad also held the Finance portfolio, the court held that it was not possible that he did not collude with the officials in such a huge embezzlement of public money. The court also noted that many of the implicated officers were close to Lalu Prasad and some were even the local guardians of his daughters, who were in Ranchi. His direct complicity in the crime was proved by Dipesh Chandak’s depositions. Chandak was a supplier who turned an approver in the case.

The judge said: “Approver Dipesh Chandak has stated that in the year 1992, Rs.1 crore was given to the accused Lalu Prasad through R.K. Rana by the AHD scam kingpin Dr S.B. Sinha. It has been stated that S.B. Sinha was known to Lalu Prasad even before his tenure as Chief Minister and he was receiving cash from S.B Sinha through R.K. Rana. In 1988-89, Lalu Prasad had come to meet S.B. Sinha on the day of the election of Chief Minister and S.B Sinha paid Rs.5 lakhs to purchase MLAs.”

According to National Election Watch and the Association for Democracy Reforms, two non-governmental organisations (NGOs), 162 of the 543 Lok Sabha members have criminal cases against them. Similarly, 1,258 out of the 4,032 legislators in State Assemblies face criminal charges. This means that roughly 30 per cent of India’s lawmakers could be criminals. Therefore, the verdict is crucial as it indicts two former Chief Ministers and many top officials. The judgment, along with the Supreme Court ruling striking down Section 8 (4) of the RPA, could go a long way in cleansing the political system of the influence of money and muscle power.

The fodder scam shows how political horse-trading and other such malpractices are integrally linked to the vested interests of an unregulated business class. The culprits in the fodder scam were small contractors who enjoyed political patronage. In the present economic scenario, an unregulated capitalist class can wreak greater havoc and institute corrupt mechanisms that can facilitate embezzlement of an order much higher than in the fodder scam. The Commonwealth Games, coal blocks allocation, and 2G spectrum scandals are some of the cases in point. In such a situation, the criminal-politician nexus could prove detrimental to the nation.

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