The Fodder Scam (Hindi: चारा घोटाला, chārā ghoṭālā) was a corruption scandal that involved the alleged embezzlement of about Rs. 950 crore (US$ 195.7 million) from the government treasury of the Indian state of Bihar. The alleged theft spanned many years, was engaged in by many Bihar state government administrative and elected officials across multiple administrations (run by opposing political parties), and 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 increasing in size, for over two decades. Besides its magnitude and the duration for which it was said to have existed, 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 was said to have 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
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, 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 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. 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. The federal government, led by newly appointed prime minister Inder Kumar Gujral who 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.
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 Rs. 37 crore (US$ 7.62 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.
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 raj in 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. Laloo Prasad Yadav is the only person on whom the Lok Sabha debated for a complete session as the official agenda