Lalu Prasad Yadav convicted in fodder scam: How a one line fax unearthed corruption scandal, unseated ex-Bihar CM

Rashtriya Janata Dal (RJD) supremo Lalu Prasad Yadav was sentenced to three-and-half years jail in the second of the three fodder scam cases by a special CBI court. Fifteen other apart from Lalu were also convicted in the case.

File image of Lalu Prasad Yadav. PTI

File image of Lalu Prasad Yadav. PTI

The multi-million corruption case, which first broke out in the 90s was subsequently stirred up from time to time in the last 21 years. The fodder scam, as we know it, was a classic case of small-scale falsified transactions which flourished over the course of years, got systemised, and snowballed into a Rs 945-crore scam.

The scam took its notorious name from the fact that it was rooted in the Animal and Husbandry department of Bihar government and the fraudulent transactions were made in the name of procuring cattle feed over a period of 20 years, under successive regimes.

However, it took a one-line fax memo, sent by the then Principal Secretary of the Finance Department, Vijay Shankar Dubey, to bring the entire sand castle crashing down. Dubey recounted the episode to Alok Kumar of News18, that how a single-line note unearthed the fodder scam, unseating a sitting chief minister of Bihar and literally paralysing the electoral career of one of the tallest political figures in the state. Here are the edited excerpts.

"By the year 1995-96, the financial condition of the Bihar government was so bad that even government employees were not getting their salaries. I was posted as the principal secretary of finance department, a post I had taken up in July, 1995. Since we were not in a position to pay the salaries of employees, it struck my mind that where was the money going.

Then in the month of September-October 1995, we discovered that Animal Husbandry Department (ADH) was spending more than five times the budgetary allocation. I immediately got suspicious that something was wrong.

On 19 January, 1996 we came to the conclusion that AHD has again exceeded the spending budget allotted to it. It was baffling for me.

I talked to my colleagues and faxed a one-line message that very day to all district collectors. “Please report expenditure under AHD for the last three years.”

This is the message that opened the Pandora's box, now known as the fodder scam.

On 20 January, I dispatched one of our additional secretaries to Ranchi to find out where the money was spent during the last three years and the very next day, on 21 January, he reported back saying, “They have not only exceeded budget limits but all the vouchers and bills are fake, against which the money was withdrawn.”

I told him to seize all the bills and come back. He came back to Patna on 22 January. After scrutinising all the documents, I moved a file to the government the next day detailing how a big fraud has taken place in Ranchi. I recommended filing an FIR against the suspects.

Even though the government kept the report under wraps, all district collectors had already started taking actions on my instructions. On 27 January, 1996, I specifically instructed Amit Khare, the then district collector of Chaibasa, to raid the Chaibasa treasury. The finding of raids made headlines all over the country. Soon after the raid employees and fodder suppliers involved in the scam went underground. But the government had not yet taken note of my recommendations. Lalu Prasad Yadav was the chief minister of Bihar.

However, the government finally acted on my recommendations on 30 January. And in the intervening weeks, a lot of things happened. You can interpret what the political leadership could have tried to do. But during this week the media widely covered the findings of the raids in Dumka, Ranchi and in other districts.

Although nobody tried to pressurise me, people in the government certainly tried to delay the investigations. However, it was too late for that and the fact that a scam had been fermenting in the ADH was evident. It was more than a 100 crore scam.

Later that year, under pressure from Opposition, the state government had to recommend a CBI probe and more than 50 cases were filed. On 23 June, 1997 the CBI named Lalu Prasad Yadav as one of the accused, which subsequently forced him to step down from the post of the chief minister."


Vijay Shankar Dubey, 74, is a former chief secretary of Bihar and Jharkhand. A 1966-batch IAS officer, Dubey retired in 2002 and went on to serve as vice-chancellor of Nalanda Open University from 2003 to 2009.

Published Date: Jan 08, 2018 19:56 PM | Updated Date: Jan 08, 2018 20:20 PM

Also See