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Separate studies conducted by Nepal’s anti-corruption agencies reveal that local governments have become hotspots for corruption. Reports by the Commission for the Investigation of Abuse of Authority (CIAA) and the Office of the Auditor General (OAG) show that corruption at the local level is on the rise, yet no serious efforts have been made to address it.

Nepal’s 2015 Constitution granted local governments greater rights and resources, with the goal of bringing services closer to the people. However, corruption has reached alarming levels. In its 34th annual report (2023/24) submitted to President Ram Chandra Poudel, the CIAA painted a grim picture, showing widespread corruption across state mechanisms, with local governments accounting for a significant portion.

Over the past year, 38.91 percent of the complaints received by the CIAA from the public were related to local governments, followed by 15.79 percent involving the education sector. The Auditor General’s 2022/23 report also highlighted local governments as the most corrupt. Audits covering Rs 1.13575trn across 746 local governments uncovered discrepancies totaling Rs 35.67bn. The data shows a consistent increase in complaints related to local and educational institutions. Currently, there are 753 local governments in Nepal.

After investigating complaints, the CIAA files cases with the Special Court. However, the Special Court often acquits defendants in corruption cases. According to CIAA spokesperson Nara Hari Ghimire, the CIAA has succeeded in 68.81 percent of the cases it filed. In the past year, the CIAA has appealed 92 Special Court decisions to the Supreme Court.

In terms of corruption cases filed in 2023/24, government officials lead the list with 520 cases involving civil servants, followed by 106 cases against elected representatives, 148 against nominated officials, and 32 against political appointees. Additionally, 739 cases have been filed against other individuals, such as accountants, intermediaries, and organizational staff. The hierarchy of cases includes six secretaries, 30 joint secretaries, 82 undersecretaries, 202 section officers, and 200 assistant-level officials.

Most cases involve the illegal acquisition of benefits, with 58 such cases filed last year. Other cases include 48 for bribery, 34 for fake educational certificates, 33 for the loss of public property, 13 for revenue leakage, 11 for illegal wealth acquisition, and four miscellaneous cases.

The OAG report also outlines common issues in local governments, including excessive and unauthorized spending on travel, fuel, mobile phones, vehicles, and hospitality, as well as hiring advisors. Local officials reportedly spent over Rs 185.32m on such expenses in 2022/23. Furthermore, 171 local units spent Rs 91.5m on the salaries and facilities of personal secretaries, while 424 units spent Rs 6.92bn on contract staff.

A key mechanism used by local governments is consumer committees. Rule 97 of the Public Procurement Regulations, 2007, states that these committees should handle only labor-intensive work that does not require machinery, tools, or equipment. Despite this, 302 local bodies spent Rs 2.99bn through consumer committees for 3,314 construction projects involving machinery. Rule 97(10) also prohibits consumer committees from engaging construction companies, yet 122 local units approved cost estimates for 1,173 projects to be carried out by consumer committees, paying Rs 700.9m in total.

According to Section 20 of the Audit Act, 2018, the accounts of local units must be audited by the Office of the Auditor General. However, the OAG report found that many local bodies have failed to conduct audits. Despite multiple reports and studies, corruption continues to rise, suggesting that anti-corruption agencies are failing to effectively monitor activities at the local level.

Four years ago, the CIAA conducted a 15-district survey to assess public perception of corruption. Of the 3,000 respondents, 67.6 percent reported that corruption had increased at the local level, and 14.9 percent admitted to paying bribes to officials. Respondents noted that corruption worsened after the formation of local units in 2017.

The special parliamentary inquiry committee, formed to investigate the embezzlement of funds from financial cooperatives, has concluded that Rs 650m funneled into Gorkha Media Network was entirely sourced from cooperatives, and that the company shares were traded using forged documents. 

The committee has recommended prosecuting four individuals, including the then-Managing Director of Gorkha Media and former Home Minister, Rabi Lamichhane, in accordance with existing laws. Others recommended for prosecution include GB Rai, Kumar Ramtel, and Chhabi Lal Joshi.

The committee presented its report to the House of Representatives on Monday, outlining eight recommendations regarding the misappropriation of cooperative funds by Gorkha Media. The report revealed that five out of seven cooperatives operated by Rai and his group had transactions totaling Rs 2.56bn with Gorkha Media, of which Rs 650m was determined to be embezzled.

The committee found that the savings of 50,000 individuals from five cooperatives—Suryadarshan of Pokhara, Supreme of Butwal, Swarnalakshmi of Kathmandu, Sahara of Chitwan, and Sano Paila of Birgunj—were illegally transferred to fund Gorkha Media Network. Legal action has been recommended against the cooperative directors and all individuals involved in the decision-making process. Currently, Ramtel is in jail, and Rai is absconding.

The report emphasizes accountability for those involved, stating, “Every company has its own objective and spirit. Promoters and shareholders bear the main responsibilities. Those in the roles of shareholders, promoters, and managing directors cannot evade responsibility and accountability for the money received by the company.”

Lekhnath Dahal, a committee member, noted that funds from Suryadarshan and other cooperatives were transferred by Rai to Gorkha Media and were spent under Lamichhane's direction. Rai, the chairperson, and Lamichhane, the managing director, along with director Joshi, opened a joint account to handle the funds. During Lamichhane’s 14-month tenure as managing director of Gorkha Media Network, he signed all but one check. The committee also deemed Lamichhane’s 15 percent share in Gorkha Media as illegal.

The committee, which spent over three months compiling its findings, prepared a 2,000-page report following extensive interrogation, statements, research, and documentation. 

During the investigation, Lamichhane, a former Home Minister and chairperson of the Rastriya Swatantra Party (RSP), was interrogated for nine hours. He denied possessing or knowing the origin of the cooperative funds and claimed he should not be held responsible. He also asserted that he is not the Rabi Lamichhane who borrowed from the Suryadarshan and Supreme cooperatives.

RSP lawmaker Shishir Khanal, another committee member, indicated that while direct evidence of Lamichhane taking money from the cooperatives was not found, his involvement in spending those funds was clear. Khanal stated, “Lamichhane was MD, this is a fact. He has signed the checks in that capacity, so if signing the checks as MD creates legal liability, it should be borne.”

The report was unanimously approved by all committee members before being submitted to Parliament. Speaker Devraj Ghimire has instructed the government for necessary implementation of the report.

Formed by the House of Representatives on May 28, the committee was headed by CPN-UML lawmaker Surya Thapa, with members including Dilendra Prasad Badu from Nepali Congress (succeeded by Badri Prasad Pandey after Badu became a minister), Ishwari Neupane, Sabitra Bhusal from UML, Lekhnath Dahal from CPN (Maoist Center), Shishir Khanal from RSP, and Dhurba Bahadur Pradhan from Rastriya Prajatantra Party.

Committee Chair Thapa told Parliament on Monday that the cooperative sector is riddled with fraud, stating, “The cooperative sector is plagued by a multitude of fakes. Marriages, property sharing, and even debts are fabricated. Audit reports and working systems are falsified. General meetings and reports are manipulated. Shareholders and debtors, including public figures, have been falsely implicated.” He emphasized the need for all parties to address and resolve these issues within the cooperative sector.

Meanwhile, RSP Chairperson Lamichhane claimed that he was not involved in the case and that his party had dismissed the allegations against him. He said, “The time of the probe committee is over. If anyone has evidence against me, please bring it forward and explain it.”

Meanwhile, Prime Minister KP Sharma Oli informed the House of Representatives on Monday about his upcoming participation in the United Nations General Assembly. During the parliamentary meeting, Prime Minister Oli outlined the issues Nepal plans to raise at the assembly. The Nepali delegation, led by Prime Minister Oli, is scheduled to depart for the United States on Sept 20.

Monday’s parliamentary session resumed after the Maoist Center lifted its obstruction. Deputy Secretary General Shakti Bahadur Basnet, speaking on behalf of the Maoists, announced that the deadlock had been removed to advance key issues, including the Prime Minister’s foreign visit and the passage of important bills.

Basnet addressed the issue of the term ‘violence’, used by UML Secretary Yogesh Bhattarai in reference to Maoist insurgency during the Aug 28 meeting of the Parliament. Basnet criticized the term, stating, “We have taken the word ‘violence’ not as an unparliamentary term but as an insult to the sacrifices of the people. It is not merely a word but an attempt to undermine the entire process of Nepal’s revolution.” He also called for clarification on whether Bhattarai’s use of the term was a personal or party-related statement.

Basnet emphasized that labeling the Maoist armed rebellion as violence undermines the historical significance of political revolutions in Nepal. He questioned, “What about the Jhapa revolt? How do you label the 1951 revolution? Violence?”

The current session of Parliament has officially ended, with President Ram Chandra Poudel approving the recommendation of the Council of Ministers.

A meeting of the Constitutional Council (CC) held today has recommended the senior-most Justice of the Supreme Court (SC), Prakash Man Singh Raut, for the post of the Chief Justice of the SC.

Deputy Speaker of House of Representative Indira Rana Magar said that the meeting held at the Prime Minister's official residence in Baluwatar has recommended the name of Raut for the next CJ.  

The meeting chaired by Prime Minister KP Sharma Oli was attended by Chief Justice Bishwambhar Prasad Shrestha, Speaker of the House of Representatives Devraj Ghimire, Chairperson of the National Assembly Narayan Prasad Dahal, main opposition party leader Pushpa Kamal Dahal 'Prachanda', and Deputy Speaker of the House of Representatives Indira Rana Magar.

The Council recommended the name of Raut from among the senior justices for the vacant position and the name of Raut will be sent to the Parliamentary Hearing Committee under the Federal Parliament.

The tenure of the incumbent Chief Justice, Bishwambhar Prasad Shrestha, is coming to an end on October 15.

Earlier, a meeting of the CC on Friday had decided to further study and discuss the recommendation for the Chief Justice in the country.

The budget session of the House of Representatives (HoR) and National Assembly (NA) has ended effective from midnight today.

In a HoR meeting this afternoon, Speaker Devraj Ghimire read out a letter received from the Office of the President stating that the current session of the Federal Parliament was concluded.

The Council of Ministers on Sunday recommended the President to end the ongoing session of the Federal Parliament as per Article 93 (2) of the Constitution of Nepal.

In today's HoR meeting, Speaker Ghimire shared the major highlights of the ongoing session of the HoR.  

In this budget session, the 56 meetings of the HoR were held in 53 days and the session continued for 130 days, Speaker Ghimire said.

In this session of the HoR, eight governmental and one non-governmental bills were registered and five of them have been passed from both HoR and NA, while three others are under consideration in parliamentary committees, Ghimire added.