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Bhutanese Refugee Scam Rocks Nepal

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Bhutanese Refugee Scam Rocks Nepal

Part one of a two-part series examines how Nepal’s political leaders fraudulently certified Nepali citizens as Bhutanese refugees to send them to the United States.

Bhutanese Refugee Scam Rocks Nepal

A Bhutanese refugee in Beldangi Camp in Nepal, October 27, 2007.

Credit: Wikimedia Commons/Alemaugil

Nepal is reeling from a corruption scandal involving some of the country’s top political leaders, who were fraudulently certifying Nepali citizens as Bhutanese refugees and sending them to the United States.

Among those implicated in the investigation are a former deputy prime minister, home ministers, a home secretary, a police chief, prominent Bhutanese refugee rights activists, and family members of political leaders. So far, the attorney’s office has charged 30 people with treason, organized crime, fraud, and forgery.

Since the 1970s, Bhutanese of Nepali ethnicity, or Lhotshampas, have faced increasing discrimination in Bhutan. In 1989, the Bhutanese government introduced the “one nation, one people” policy, promoting the Drukpa culture of the kingdom’s majority Ngalop ethnic group.

Lhotshampas have organized protests, which involved some violent activities. The Bhutanese government violently crushed the resistance, forcing tens of thousands of Lhotshampas to flee to India and eventually to Nepal in 1990.

Around 90,000 refugees were registered in Nepal and stayed in six refugee camps in Eastern Nepal, supported by the the United Nations refugee agency and the World Food Programme. Despite Nepal’s efforts to repatriate them to Bhutan, Thimphu has refused to accept them on the grounds that they are “anti-national.”

After more than a decade, a solution was found. The Bhutanese refugees were to be resettled in a third country. Seven Western countries agreed to resettle the refugees, with the U.S. leading the way by resettling around 85,000 of them.

The appeal of resettling in the West was enormous and stories of Nepalis seeking to marry Bhutanese refugees abounded. Such resettlement ended in 2017, leaving behind 6,000 refugees in the camp.

Kathmandu formed a task force in June 2019 led by Balkrishna Panthi to recommend “permanent and long-term solutions to the problem of the Bhutanese refugees.” The task force was mandated to recommend what the Nepal government needed to do with refugees registered but not settled, and with those left out of the registration process.

However, the task force could not complete every mandate and stated that it was repeatedly receiving applications from left-out refugees. The final report was not made public.

It emerged subsequently that a syndicate led by Keshav Prasad Dulal, in collaboration with government officials, had sought to manipulate the task force report. The gang had enlisted 875 Nepali nationals, fraudulently identifying them as Bhutanese refugees previously left out of the registration, and collected a vast amount of money from them by promising to resettle them in the U.S.

The fraud came to light when the individuals who had paid large sums to have their names listed as Bhutanese refugees were not resettled in the U.S.

Corruption scandals are not new in Nepal. The country ranks a lowly 110 out of 180 countries in Transparency International’s Corruption Perceptions Index 2022. Most Nepalis would readily acknowledge that political leaders, government officials, and brokers work in cahoots. Nevertheless, the Bhutanese refugee scam is unprecedented as points to serious problems in Nepali politics.

First, the case lays bare how ordinary Nepalis perceive their lives in Nepal and the lengths to which they are  willing to go in order get out of the country. They are willing to pay massive amounts, declare themselves to be stateless, and put their lives at risk for an opportunity to resettle in an OECD nation. Nepal’s 2021 census reports that the absentee population, who has been abroad for over six months, is 2.2 million, or 7.5 percent of the population. Many have taken treacherous and illegal routes to reach the U.S. and Europe or even go to work in war-torn Iraq or Afghanistan. In this context, the 875 people are not unique in their attempts to leave Nepal, seeking greener pastures abroad through whatever means and risks necessary.

Second, the scam reaffirms why people are pessimistic about positive change in Nepal. Corruption is rampant, and the nexus between contractors, political leaders, and bureaucracy is not new. However, this case is notable because the administrative system as a whole was prepared to facilitate corruption.

Former Deputy Prime Minister Top Bahadur Rayamaji helped with the coordination, while former Home Minister Bal Krishna Khand was instrumental in creating a fraudulent report to the one prepared by the Panthi-led taskforce and approved by the Council of Ministers. Then Home Secretary Tek Narayan Pandey held on to the original task force report and released the report only after falsely adding an addendum. Indrajit Rai, the advisor to the home minister, coordinated among the ring members and appointed sympathetic people to the task force. When he was the chief of the Kathmandu Valley Crime Investigation Office, Inspector General of Police (IGP) Basanta Bahadur Kunwar sought to suppress the investigation. He was promoted to the IGP post and did all he could to save Khand once the investigation was underway.

Ringleader Dulal was instrumental in forming a sub-committee to review the issues of Bhutanese refugees in Nepal in June 2022. Senior bureaucrats who were conducive to the scam were transferred to the “right” positions or even promoted. Prominent Bhutanese rights activist Tek Nath Rijal was in it too. Besides, the families of the accused were also engaged directly in the planning or receiving of bribes.

Third, the statements by the ringleaders and the other brokers expose the impunity with which the go-betweens and officials used office premises to conduct corrupt activities. Dulal and others allege that they met the ministers, their families or aides in the ministry, and official quarters to hand over millions in hard currency. They also met officials outside of the office too. Many leaders admitted to meeting the middlemen and ringleaders in restaurants or while traveling for “refreshments.” Clearly, they saw nothing wrong in wining and dining with intermediaries.

Fourth, despite the serious charges against them, senior leaders are defending the accused and trying to derail the investigation process. Arzoo Deuba, a parliamentarian from the Nepali Congress and widely believed to wield power behind the scenes, is implicated in the investigation. She is the wife of Nepali Congress Chief Sher Bahadur Deuba. Similarly, the personal secretary of former Prime Minister Khadga Prasad Sharma Oli is also implicated. In the last decade, politics in Nepal has primarily revolved around Deuba and Oli, together with Prime Minister Pushpa Kamal Dahal.

Oli warned the government against targeting his Communist Party of Nepal-United Marxist Leninist leaders and cast doubts on how “investigations are conducted in Nepal.” Deuba stood behind Khand, his party colleague, and expressed confidence that he would be acquitted by the court. Though the current home minister has said the right things, people still doubt if the investigation will be carried out professionally without political interference.

Finally, the scam demonstrates that anything is fair game for corrupt officials. The scam would have robbed 875 Nepali citizens of citizenship. They would have been “trafficked” abroad. That the scammers with the active connivance of the political establishment committed such offenses against the state shows the extent to which Nepali society and polity have decayed.