The month of May saw the arrest of two former ministers, Mr. Bal Krishna Khand from the Nepali Congress, and Mr. Top Bahadur Rayamajhi from the CPN-UML, along with other fifteen individuals for their alleged involvement in the Fake Bhutanese Refugee Scam. On May 22, Nepal Police submitted an investigation report on the same to the District Attorney’s Office Kathmandu with a recommendation to prosecute thirty-three individuals including those senior leaders, senior bureaucrats and middlemen on charges of treason, organized crime and fraud. On the other side, the opposition faction of the Nepali Congress (NC) upped the ante against the top leader Mr. Sher Bahadur Deuba, and launched “Nepali Congress Rupantaran Abhiyan (transformation campaign)” against the backdrop of Mr. Deuba’s dubious positions on the ongoing investigation of the scam, and the NC’s dismal performance in the April by-polls.

Timeline of Major Events

 

Date	Event
May 10	Former Home Minister Bal Krishna Khand arrested for his alleged involvement in the Fake Bhutanese Refugee Scam.
May 14	Former Deputy Prime Minister Top Bahadur Rayamajhi arrested for his alleged involvement in the Fake Bhutanese Refugee Scam.
May 22	Nepal Police submitted an investigation report on Fake Bhutanese Refugee Scam to the District Attorney Office Kathmandu.
May 25	The opposition faction of the Nepali Congress launched “Nepali Congress Transformation Campaign '' to be held all over the nation, with the first program in Madhes Pradesh.

 

Fake Bhutanese Refugee Scam

On May 22, Nepal Police submitted an investigation report to the District Attorney’s Office Kathmandu on the Fake Bhutanese Refugee Scam, in which, top leaders and top bureaucrats had allegedly colluded with a group of racketeers in collecting a large sum of money from Nepali citizens with a promise of sending them to the US as Bhutanese refugees. The report recommended prosecuting thirty-three individuals, including former deputy Prime Minister Top Bahadur Rayamajhi, former Home Minister Bal Krishna Khand, secretary of the office of Vice President and former Home Secretary Tek Narayan Pandey, former Nepali Congress’s lawmaker Aang Tawa Sherpa, former home minister Ram Bahadur Thapa’s security adviser Mr. Indrajit Rai, Mr. Khand’s personal secretary Narendra KC, among others. Of the accused thirty-three, seventeen are already arrested, and the rest are on the run.
 

Top Leaders’ Ambivalence

That some senior political leaders and bureaucrats are brought under investigation is in and of itself appreciable, however, kith and kin of powerful leaders who have been implicated in the scam by those in judicial custody weren’t brought under investigation. Mrs. Arju Rana Deuba, a leader of the Nepali Congress, who happens to be the wife of Ex-Prime Minister, and Nepali Congress’s top leader Sher Bahadur Deuba, Ex-deputy PM Ram Bahadur Thapa Badal’s wife, former PM KP Sharma Oli’s personal secretary Mr. Rajesh Bajracharya are among those. It is reported that Mr. Sher Bahadur Deuba pressurized the government and the Nepal Police to not investigate his wife, Mrs. Arju Rana Deuba, and fearing that Mr. Khand’s wife Mrs. Manju Khand could implicate Mrs. Rana Deuba, Deuba, Mr. Deuba is reported to had asked the authority to not investigate against Mrs. Khand as well. Mr. Oli, the opposition leader, cried foul in the investigation process, and the UML took a while to expel the accused leader, ex-deputy PM Rayamajhi, that too reluctantly. Mr. Oli also reportedly asked PM Dahal to not drag Mr. Prem Kumar Rai, Chief Commissioner of the Commission for Investigation of Abuse of Authority (CIAA), who was also implicated in the scam.The top leaders of the three parties, Mr. Deuba, Mr. Oli and PM Dahal held a series of meetings, as the investigation took off – questions were raised about the same in the parliament, while some leaders of the three parties questioned the motive behind such unusual meet-ups. All these have raised doubts over the impartiality of the ongoing investigation, and whether the Nepal Police was allowed to carry out the investigation fairly.
 

Many Facets and Implications of the Scam

There are quite a few facets and implications of the scam and investigation – first, the entire episode is a testament to the systemic corruption which has deeply penetrated the system, with its tentacles spread to almost every state agency. Second, the investigation against some senior leaders is a good start but for others, who are kith and kin of the top leaders, being able to evade the investigation process is revealing enough of the fact that the road to ending impunity is quite long and arduous. That those accused weren’t even called for recording their testimony, despite being implicated by those in judicial custody, is telling in itself – of how the system is rigged and manipulated by those in power, to their favor. Third, the implication of this scam isn’t just confined to the domestic realm as it involved sending fake refugees to the US. As a consequence, the image of our nation is tarnished and our credibility reduced. Fourth, given that the investigation has garnered huge popular support from across the spectrum, some other cases of corruption could be brought into investigation and judicial trial. PM Dahal has repeatedly vowed the same. However, since all mainstream political parties are already trapped in the quagmire of systemic corruption, these parties are unlikely to bring cases of corruption into investigation impartially. There is a fair chance that cherry-picking of corruption cases could be employed against the opposition and/or political rivals as a political vendetta – if and when so happens, as has been the case in many South Asian democracies, anti-corruption politics could even take an ugly turn. The state and the concerned state agencies, therefore, should bring all reported cases of corruption under investigation and trial with no biases or favor for or against any.

Ubiquitous Systemic Corruption, and Pervasive Impunity

While systemic corruptions are no rare occurrence, the state by and large has failed to take appropriate actions, and the inability to do so has given way to a corrupt nexus of politicians, bureaucrats and others within the system. The nexus has penetrated deep into the system, and has been able, more often than not, to evade investigation and trial.

Over the past few years, quite a few instances of systemic corruption were reported. In 2019, a corruption scandal surfaced wherein middlemen conspired with land revenue authorities, officials of ministerial rank, civil servants of high positions and politicians to unlawfully appropriate the ownership rights of Lalita Niwas - a government-owned area spanning over 100 ropanis; altogether worth billions in Nepali rupees- which were sold at significantly lower prices than their actual value. The general secretary of the erstwhile Nepal Communist Party (NCP) and ex-Finance Minister, Mr. Bishnu Poudel, was implicated in the scam. In 2020, the government awarded a contract to Omni Business Corporate Group for the procurement of medical equipment, the rates quoted in their bid were highly inflated. The same year, an audio tape surfaced revealing that Mr. Gokul Prasad Baskota – then Minister of Communications and Information Technologies at that time - demanded Rs 700 million from a local agent of a Swiss firm in exchange for awarding them with a security printing press equipment procurement contract. In 2022, a news report accused the Finance Minister and CPN (Maoist Center) leader Janardan Sharma of allowing two unofficial individuals to tweak tax rates in favor of some business houses.

These are just a few examples of corruption scandals that reveal collusion between high-profile leaders, bureaucrats and private sectors. More often than not, such cases are kept under the rug, and very few, barring the top political and bureaucratic leadership, are at times brought under investigation. The state institutions are plagued by the corruption-nexus, and have been largely ineffective, and as a consequence, impunity has prevailed. There is now an urgent need to strengthen state institutions to end impunity, and implement regulatory measures to ensure financial transparency.
 

Opposition Faction of the Nepali Congress Upped the Ante Against Top Leader Deuba

The Nepali Congress (NC), which has been caught up in factional politics for long, now seems to be at the crossroad. The two secretaries of the Nepali Congress, Mr. Gagan Kumar Thapa and Mr. Biswa Prakash Sharma have vowed to put up a decisive fight against the party’s establishment faction, particularly against the top leader Mr. Sher Bahadur Deuba’s wrongdoings and his proclivity of sidelining the opposition faction within and beyond party affairs. The dismal performance of the NC, while still in electoral coalition with ten other parties of the ruling alliance, in the April by-polls was telling of the challenges that awaited the party. The unwillingness of the top leadership to go down the corrective path, and rebrand the party to adapt to the changing political and electoral landscape is viewed as the major reason behind the Nepali Congress’ dwindling connect with its voter base. The discontent against Mr. Deuba was further added as he refused to take action against Mr. Khand, implicated in the Fake Bhutanese Refugee Scam and arrested for the same, who happens to be Deuba’s trusted ally for decades. Mr. Deuba also reportedly went to lengths to not let the Nepal Police investigate his wife Ms. Arju Rana Deuba - also implicated in the scam – and kept postponing party’s meetings indefinitely to suppress voices demanding for prompt actions against those accused. Then, the opposition faction of the party, led by general secretaries, Mr. Gagan Kumar Thapa, and Mr. Biswa Prakash Sharma launched the “Nepali Congress Rupantaran Abhiyan (transformation campaign)” to channelize local leaders against Mr. Deuba and his faction. The general secretaries are said to be deliberating over different ways to proceed further; either to call for an early convention, call for a policy convention or resign from their posts in protest against the top leadership.
The internal turmoil of the Nepali Congress is only a microcosm of what mainstream political parties could face in the near future, if they fail to take corrective measures, promote intra-party democracy and deliver on the governance front. The last cycle of elections has given birth to new parties which have branded themselves as “alternative” to the mainstream ones, the anti-incumbency wave is getting stronger with each passing day, and the public sentiment remains against the old guards of the mainstream parties. The effect of this changing political landscape could cause a major internal shake-up within mainstream parties as the first-rung leaders, who are for the status quo, are likely to face stiff opposition from second or lower rung leaders seeking substantive changes within the party and beyond.