Unprecedented Move: Nepal's Chief Secretary Faces Corruption Allegations

Unprecedented Move: Nepal's Chief Secretary Faces Corruption Allegations

In an unprecedented move that has shaken Nepal's civil service to its core, the Commission for Investigation of Abuse of Authority (CIAA) filed a corruption case against Chief Secretary Dr. Baikunth Aryal on Sunday, June 23, 2024. This marks the first time in Nepal's history that a sitting Chief Secretary has been charged with corruption, automatically resulting in Dr. Aryal's suspension from his position.

The case, filed in the Special Court, implicates Dr. Aryal and 11 others, including Ritesh Shakya, Joint Secretary of the Ministry of Finance, for alleged irregularities in the purchase of excise duty stickers. Dhan Bahadur Karki, the spokesperson of the special court, informed that the CIAA is seeking a recovery of precisely 386.67 million, 17 thousand, and 640 rupees from the accused.

Historical Context

To understand the gravity of this situation, it's crucial to look at the history of Nepal's civil service administration. The role of administrative leadership in Nepal dates back to the Licchavi period, with figures like Anshu Burma setting early precedents. In the modern era, Chandrahadur Thapa became the first Chief Secretary on 2012 . Since then, Nepal has seen 25 chief secretaries.

Throughout the Panchayat period and into the democratic era, notable figures such as Kulshekhar Sharma, Krishna Bahadur Manandhar, and Damodar Prasad Gautam held this esteemed position. In the more recent democratic system, individuals like Madhusudhan Prasad Gorkhali, Bimal Koirala, Lokmansingh Karki, and Shankardash Vairagi have served as Chief Secretary.

Previous Controversies

Several past chief secretaries have faced scrutiny, though not to the extent of formal corruption charges:

  1. Lokman Singh Karki: Appointed on Ashoj 3, 2062 (2005), Karki was embroiled in controversy for his alleged role in suppressing the second people's movement. While he was removed from his position as Chief Secretary, he was not accused of corruption at that time. Interestingly, Karki had been acquitted of a corruption case earlier in his career while he was a joint secretary. Later, as chief commissioner of the CIAA, he faced an impeachment motion and was eventually dismissed by the Supreme Court.

  2. Lilamani Paudel: Despite his reputation for integrity, Paudel was involved in the controversial Lalita Niwas land case in 2069 (2012).

  3. Madhav Prasad Ghimire: He faced questioning regarding decisions made during Madhav Kumar Nepal's tenure about the Lalita Niwas land.

  4. Dr. Somlal Subedi: In 2072 (2015), Subedi stirred controversy by deciding to become an alternate executive director of the Asian Development Bank while serving as Chief Secretary.

Dr. Baikunth Aryal's Career and Controversies

Dr. Aryal's 31-year career in civil service began in 2046 (1989) as a Nasu (clerk). He steadily climbed the ranks, becoming a branch officer in 2049 (1992), Deputy Secretary in 2056 (1999), and Joint Secretary in 2066 (2009). After becoming Deputy Secretary, he worked in the National Planning Commission for about a decade. Notably, he served on the board of directors of Nepal Telecom for four years while he was joint secretary of finance, a position that later became controversial.

He holds master's degrees in economics and public administration from Tribhuvan University and in development and resource economics from the Norwegian University of Agriculture.

Despite cultivating an image of integrity, Aryal has been implicated in numerous controversies, particularly during his tenure in the Ministry of Communications. The CIAA is investigating about a dozen complaints against him, including:

  1. Irregularities in Nepal Telecom's billing system maintenance contract

  2. The National Payment System

  3. Teramox affair

  4. Mobile Device Management System (MDMS) tender manipulation

  5. Revenue exemptions for Internet Service Providers (ISPs)

  6. Irregular operations at the Birgunj dry port

  7. Illegal property acquisition

One particularly contentious action was Aryal's decision to change the directory to make Sunil Poudel the managing director of Nepal Telecom, a move that has come under scrutiny in the current investigations.

Aryal's Path to Chief Secretary

Aryal's appointment as Chief Secretary on 2080 (2023), just three days before his scheduled retirement on June 17, 2024, raised eyebrows. This was made possible by the resignation of then-Chief Secretary Shankardas Bairagi, whose tenure was set to end on September 21 2023,. Bairagi resigned three months early and was moved to a newly created position of National Security Adviser.

It's worth noting that according to the provisions of the Civil Service Act at the time, employees who entered the service intending to retire at 60 would receive pension benefits calculated based on 60 years of service if they resigned before that age. This provision may have played a role in the timing of these changes.

The appointment was reportedly orchestrated with the support of the Congress leader Arju Deuba group and had tacit approval from other major parties, including the UML. Had the corruption case not intervened, Aryal would have completed his three-year term as Chief Secretary 2026.

The Excise Duty Sticker Scandal and CIAA Investigation

The corruption case against Aryal centers on irregularities in the purchase of excise duty stickers. The investigation has also implicated Vikal Poudel, the former executive director of Suraksha Printing Center. Aryal, as Communication Secretary, is accused of making decisions favoring Poudel's group.

This case is part of a broader pattern of alleged misconduct involving Aryal, including his role in protecting Sunil/Vikal Paudel in various IT sector irregularities. Aryal allegedly manipulated directories to appoint Sunil Poudel as the managing director of Nepal Telecom and was involved in extending Nepal Telecom's contract period for billing maintenance.

The CIAA's investigation into Aryal has been extensive. He has been called to give statements on at least six corruption complaints, including the national payment system, transactions with Teramox, and dealings with Vikal Paudel. Interestingly, the CIAA initially split the file of the payment gateway, reportedly to avoid sending a bad message by prosecuting the incumbent chief secretary who had a "decent personality." However, they are now investigating a second file related to the payment gateway.

In response to these allegations, Aryal has consistently denied any wrongdoing. In a statement to Online Khabar, he claimed to have worked according to procedures and denied involvement in any irregularities.

Impact on Nepal's Civil Service

The charges against Dr. Aryal have significant implications for Nepal's administrative and political landscape. Experts and former officials have expressed various concerns about the state of governance and the potential consequences of this case.

A Stain on Nepal's Administrative History

This case marks a significant departure from historical precedent. From the Licchavi period through the Rana regime and into the modern era, no head of administration had been charged with corruption until now. The outcome of this case will have far-reaching implications for Nepal's civil service, political landscape, and anti-corruption efforts.

As Nepal grapples with this unprecedented situation, questions arise about the integrity of its highest administrative office and the overall health of its governance systems. The case against Dr. Baikunth Aryal serves as a stark reminder of the ongoing challenges in maintaining transparency and accountability in public service, even at the highest levels of government.

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