By Ashima Makhija
On Thursday, the Nitish Kumar-led Bihar Government ordered a Central Bureau of Investigation (CBI) probe into the Srijan scam. This scam allegedly syphoned off an estimated Rs 700 crores of public funds. The scandal that continued its operations over ten years and across two governments, of JD(U)-BJP and RJD-BJP, has raised several questions about the governments commitment to its anti-corruption drive.
Srijan Mahila Vikas Sahyog Samiti Limited provided vocational training to women and sold pickles. Reports by The Indian Express reveal how the small Bhagalpur NGO allegedly pilfered funds from Bhagalpur district administrations accounts. These were funds meant for at least half a dozen welfare schemes. Government officials, bank employees and the NGOs own staff were reportedly involved in the scheme.
How to syphon off government funds
The nine FIRs registered so far and other police records show that two crucial methods held the key to the decade-long success of this scam. The first technique involved the direct deposit of government funds to Srijans accounts through fake third-party endorsement. We call it sweep method in which A (the state government) transfers money to B (Bhagalpur administration). The bank gets B to make a fake endorsement on the back of cheque to deposit it to C (Srijan in this case), said Bhagalpur SSP Manoj Kumar. Third-party deposits had been allowed after due endorsement until 2008. However, the RBI declared them illegal to prevent money laundering. Despite this, the deposits were made in this case.
The second method is via forged cheques. For any government account, a valid cheque series is issued. In this case, a duplicate cheque series was also released and given to Srijan. The NGO would forge the DMs signature to transfer the funds into its account. The police have seized several chequebooks from government offices having Srijan bank account numbers written overleaf.
Unveiling the scandal
The scam was supported by excellent machinery and a dedicated team. The District Welfare Officer, the auditors and nine District Magistrates, who were the sole custodians of these reserves, were part of this complex corruption network and have been arrested.
The scam first came to light after a government cheque of Rs 270 croresmeant to be paid to farmers in return for their land for a power plant bounced on August 4. Investigators found that on earlier occasions, whenever a cheque from the government was presented at the two bank branches, a bank employee or a government clerk would alert Srijan Founder and Secretary Manorama Devi. Srijan would promptly deposit the required amount in the government account. This was to ensure that the cheque did not bounce and the fraud was not detected.
The death of Manorama Devi and takeover by her daughter-in-law, Priya Kumar, resulted in mismanagement. Due to this, the aforementioned cheque bounced, which ultimately led to the revelation of the whole scam.
Setback for the anti-corruption drive?
The Bihar CM has repeatedly emphasised on how the Modi-Kumar brand of politics is intolerant towards corruption. Kumar had cited the corrupt history of Tejashwi Yadav, Lalus son, for the recent break-up of the Grand RJD-JD(U) Alliance. On Thursday, RJD supremo Lalu Prasad Yadav took a dig at Kumar over his ‘inaction’ towards the Srijan scam. Before the announcement of the CBI probe, Tejashwi accused Kumar of pressurising the media not to report the scam even though a special investigation team (SIT) was investigating it at that time.
However, the picture painted by the bitter Opposition is quite distant from the quick response of the Nitish government. After the bouncing of the cheque and discovery of fraud, District Magistrate Adarsh Titarmare conducted an internal inquiry and found that the government account did not have funds. Following this, CM Nitish Kumar sent an Economic Offences Unit team to Bhagalpur. So far, several people and organisations have been brought under the scanner and twelve people have been arrested. JD(U)s chief ally, BJP, has suspended Vipin Sharma, Vice-President of party Kisan Morcha after his name surfaced in the scam.
Anti-Corruption is the central feature of the Modi-Kumar campaign. It has helped consolidate vast support for the Grand Bihar Alliance 2.0. The swift response of the Central and State governments, despite criticism from the Opposition, is expected to strengthen this incorruptible image.
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