The day the cows came home
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The day the cows came home

The multi-crore fodder scam has finally caught up with Lalu Prasad, after several twists and turns. Ashok Mishra examines the case that unravelled Bihar’s messiah.

india Updated: Oct 06, 2013 14:55 IST
Ashok Mishra
Ashok Mishra
Hindustan Times
Lalu Prasad,fodder scam,Jagannath Mishra

For long — at least 14 years to be precise — netas and bureaucrats in Bihar joined hands to craft a spectacular scam. The fact that a total of Rs 950 crore was looted from the state’s innocuous animal husbandry department is staggering enough; but it’s the ingenuity with which the money was siphoned that is completely breathtaking.

It is well known that receipts for fodder were conjured out of thin air, but picture this: according to government records, voucher (no 430) dated 12/85; four bulls were transported from Ranchi to Ghagra in a vehicle bearing registration no BHN-9231.

All very well, so what’s the big deal about bulls being ferried by the animal husbandry department? Well, in this case, the ferry vehicle turned out to be a scooter. In another instance, a car bearing registration number BHV-5777 was used to carry four bulls from Ranchi to Jhinkapani. Yes, bulls as passengers in a family car. And so, money was systematically looted — crore by crore — and imaginary cows and bulls were being transported to imaginary farmers who existed only on paper. The rush to withdraw money from the government treasury was so great, at least two chief ministers — Jagannath Mishra and Lalu Prasad — presided over the loot through a nexus of gung-ho bureaucrats and suppliers willing to manufacture bills out of thin air.

Prasad, who emerged as the messiah of the backwards in 1990, when he first became Bihar’s chief minister — and eventually went on to become the darling of the media — is brazen by nature and thought perhaps that the law would not catch up with him. In comparison to scams that are now hitting the headlines — 2G and Coalgate — the fodder scam, or chara ghotala as it has come to be known, seems minuscule. But this week, it sent two chief ministers behind bars, and a close post-mortem of the scam reveals that it has brazen written all over it. If during Mishra’s time, money was being siphoned in small amounts, it escalated during Prasad’s tenure: investigations revealed that withdrawals went up to Rs 150 crore in a single year.

Imaginary cattle and fake bills

The scam first took root between 1983-84, when Bihar government had sanctioned Rs 15 lakh to the regional office of the animal husbandry department at Ranchi for the purchase and distribution of bulls and their fodder among the tribal population spread over seven blocks of the of Ranchi, then part of Bihar. The bulls were never purchased. But the senior officers of the animal husbandry department manufactured receipts for procuring bulls from fake firms. Bills were obtained from veterinary doctors and junior officials posted at the block levels. The modus operandi was simple — bribe officials into submitting fake bills or just threaten them into it.

It was in 1990 that the test audit report by the deputy accountant general first put the word scam down in writing. The ingenuity gave it all away — scooters, cars, jeeps, tankers and station wagons were shown to have been used to transport bulls, cows and goats worth Rs 30 crore to remote locations of Ranchi under a tribal sub plan. “The distances ranging from 250 km to 672 km were purported to have been covered by transport which is only possible with divine intervention and no human could undertake such feat’’, said the report authored by deputy Accountant General in 1990.

Following the fraud detected by deputy Accountant General, the then agriculture minister Ramjivan Singh wrote a confidential letter to chief minister Lalu Prasad, recommending a CBI probe into the matter. The recommendation stayed on paper. Prasad was the king of Bihar and his famed rustic wit and innate political acumen saw him stride the state and become a powerful regional satrap.

An emboldened bureaucracy spread its wings. The scam grew in magnitude with the help of netas and babus. The animal husbandry director in Patna secretariat allotted funds beyond the budgetary provisions to Chotanagpur (Ranchi) regional office by diverting funds meant for North Bihar districts through fake allotment letters to the treasuries.

The ever-willing treasury officers did not object to excess withdrawals since they also connived with the fodder mafia for pecuniary gains. Imagine this — by January 1995-96, Rs 116 crore were disbursed by various treasuries against the budgetary allocation of Rs 71 crore but the finance department had no clue as to how much money had been overdrawn from treasuries of Bihar. The money withdrawn on fake bills was stashed away in different banks in benami accounts in connivance with bank officials. In January 1996, the Ranchi administration seized seven bank accounts in different branches of Union Bank of India and State Bank of India. According to a report submitted to the government by Rajiv Kumar, the then deputy Commissioner of Ranchi Rajiv Kumar, five out of seven were benami accounts.

The misappropriation of funds did not arouse suspicion at that time, since the Accountant General Office did not object to the excessive withdrawals. It emboldened the then regional director of AHD, Chotanagpur, Shyam Bihari Sinha, kingpin of the fodder scam and one of the prime accused who died during trial due to kidney ailment, to withdraw more funds through fake allotment letters.

When Lalu Prasad became the chief minister in March 1990, the quantum of budgetary allocation increased substantially over the years. Bihar Legislative Assembly records showed that the budgetary allocation of the animal husbandry department stood at Rs 54.92 crore in 1990-91 but the real expenditure was Rs 84.21 crore, nearly Rs 30 crore in excess. From 1990 to 1995, the budgetary allocation of the department rose to Rs 74.40 crore but the expenditure jumped to Rs 245 crore; 229% in excess of the actual allocation. Fake bills were being churned out with immunity. The imagination of the babus began to run riot and in one instance — which even Bollywood would resist incorporating into a fantasy script — Rs 5 crore’s worth of annual poultry feed was purchased for only 2000 hens.

Finally, in January 1996, the scam tumbled out, when Amit Khare, deputy commissioner, West Singhbhum smelt a rat and visited the animal husbandry department. “I found bills and vouchers scattered all over. We even found cash strewn all over the place. I sealed the office and ordered the treasury not to make any further payments,’’ recalls Khare who is currently joint secretary in the HRD ministry.

Mafia power

Until then, the fodder mafia had become so strong it even prevailed upon politicians to get officers of their choice posted to the department. Once, when the post of AHD Director fell vacant, rules were bent. Instead of the Bihar Public Service Commission selecting the candidate, a government committee did the job. Sinha, the kingpin had his way and got a man of his choice. The kind of proximity Sinha enjoyed with Lalu Prasad can be gauged from the fact that he was the local guardian to the ‘messiah’s’ children during their schooling in Ranchi. Again, during a wedding reception of the daughter of one of the fodder scam beneficiaries — at a posh hotel in Patna — Sinha did not even get up to receive the chief minister when he walked in. Instead, Prasad walked up to Sinha and sat down on the sofa beside him. The quantum of loot was so huge that Sinha even went to Adelaide, Australia, accompanied by 11 associates and family members for a kidney transplant.

Most members of the mafia owned palatial buildings in Ranchi, Patna, Mumbai, Bangalore, Delhi and Kolkata and it is said that majority of buildings in Ashok Nagar in Ranchi are owned by fodder mafia and suppliers. All the buildings had black polished marbles fittings and the washrooms had huge lotus-shaped bath tubs which could have been used by at least five persons. The famous white house building in front of the Patna museum was reportedly constructed by the mafia to be gifted to Lalu Prasad. The building, however, was seized by the Patna high court on the basis of a HT report when no one claimed that building. At present, it houses the office of state legal aid authority.

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Lalu Prasad — now in jail for five years — thought he was invincible, but the law caught up with him, even though it took 17 long years. Ironically, the chief minister of Bihar actually went on to become a Union minister at the Center during the prime minister ship of IK Gujral. For a few brief days, attention was focused on him after he was formally charged by the CBI but resisted giving up his gaddi. Gujral too had to be persuaded to demand that he step down and a reluctant Prasad had to but left only after having ensconced his wife Rabri Devi as his successor. Then, in 1997, he emerged virtually unscathed and became a minister in Delhi, but the 2013 conviction has a certain sense of finality. The grand man of Bihar has lost his Lok Sabha seat and even if he manages to get himself bailed out from a higher court, it will be difficult for him to brazen it out in the political arena, for a while at least.

(with inputs from Vanita Srivastava)

First Published: Oct 06, 2013 00:48 IST