The ‘contracts and kickbacks’ scandal in Uttar Pradesh
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At the centre of the scandal for which the UP police have arrested Badshah Singh, labour minister in the previous BSP government, is a cooperative federation whose brief grew overnight from carrying out small renovations and whitewashing government buildings to undertaking construction projects, the budget for its works in turn multiplying 100 times.
And Badshah is only one of 10 former BSP ministers being probed by the special investigation bureau of the UP police's cooperatives cell. Among the other nine is Babu Singh Kushwaha, already arrested in the NRHM scam. All 10 are being probed for alleged kickbacks they received for projects allocated to the Labour and Construction Cooperative Federation (LACCFED).
A group of officials in the agency allegedly siphoned off crores of rupees in government funds, paid by various departments against projects LACCFED was supposed to execute. They include the agency's chairman, managing director, general manager, chief engineer, engineers, accountant and public relations officer. Seven of them have been arrested, besides the former minister.
SIB sources say they have found that the advances paid totalled Rs 300 crore, and that the then ministers received 8 to 10 per cent as kickbacks.
They say that Kushwaha, then cooperatives minister, got his close associate Sushil Katiyar nominated LACCFED chairman on May 3, 2010. On May 25, 2010, an order issued by then chief secretary Atul Gupta turned LACCFED from a renovation/whitewash agency into a construction agency for one year, and raised its limit from Rs 5 lakh to Rs 5 crore, says deputy SP (SIB) A P Gangwar, who is supervising the investigation.
LACCFED did not fulfil the requirements — staff including the number of engineers, equipment including machinery — for working as a government construction agency, SIB sources say.
The contracts scam was unearthed in January, when it was found that Rs 12.36 crore had been withdrawn from the agency's account without any work done, says P N Singh Yadav, LACCFED's general manager, administration & finance. It was Yadav who lodged the FIR after it was found that the agency's accounts section did not have details of the projects on which the money was supposed to have been spent. The money had been issued through bearer cheques in the names of 16 LACCFED engineers between October 2010 and October 2011.