CAG: Allegations of Corruption, Cronyism, and Cover-Up

CAG - the Comptroller and Auditor General of India is a cornerstone of accountability in India’s governance, tasked with auditing the Union and State governments, government bodies, third-tier administrations, PSUs amongst others. This role of the CAG ensures institutions stay transparent, accountable, and corruption-free. But when allegations of corruption, cronyism, and cover-ups infiltrate this office, the consequences reverberate far beyond its walls, threatening to destabilise the entire state and central government machinery.

In Part 1 of our series, we reveal a pattern of controversial foreign postings, allegations of corruption, and misconduct, and how the C&AG overlooked them, even awarding one of the officials a lucrative foreign posting. In these forthcoming stories under the series, we explain why the independence of the office of the Comptroller and Auditor General of India must not be compromised. As the CAG Girish Chandra Murmu’s term ends on November 21, 2024, his successor will again be chosen by the Prime Minister and appointed by the President, continuing a cycle that places the independence of this constitutional body under serious scrutiny. The CAG’s autonomy and the crisis it faces are more pressing than ever.

CAG's Foreign Posting Fiasco

On 21 August 2024 and again on 28 August 2024, an explosive, nearly 6,000-word email from "a cohort of vigilant employees working at the CAG office" reached senior officials within the institution. Signed off by the whistleblower on behalf of this group, the email detailed a series of serious allegations against Vishal Desai Bapusaheb, a senior official. Desai is a 2010 batch Indian Audit and Accounts Service (IA&AS) officer who was the Director (Personnel) at the time. 

The accusations against Desai were damning, involving incidents of corruption and sexual misconduct allegedly occurring during an audit assignment in Mauritius. Moreover, the complaint claimed Desai engaged in sexual exploitation during the recruitment process for young professionals. The allegations extended to a bribery scheme linked to recruitment under the sports quota, alongside claims that, over the past four years, vacant posts at CAG Headquarters had been filled exclusively through bribery. According to the complainants, these allegations added to the growing list of financial misconduct within the organisation and raised serious concerns about the integrity of the internal financial management of the Comptroller and Auditor General of India’s office.

The complaint included annexures that the complainants, self-identified as current Comptroller and Auditor General of India officials, claimed provided documentary and photographic evidence to support some of their allegations. The Probe has obtained copies of these documents and photographic evidence. However, we have not independently verified the evidence or investigated the claims against Desai; responsibility for this lies with the competent authority. 

What followed, however, raises serious questions about accountability within the institution. Instead of initiating an inquiry to assess the truth behind these grave allegations—whether to exonerate Desai or hold him accountable—the organisation instead granted him a coveted foreign posting. 

On September 6, 2024, just a few days after the complaint was received at the headquarters, Desai assumed charge as the Principal Director of Audit in London. This move sparked a hue and cry among 'whistleblowers' and other senior officials within the institution, who had long raised complaints against Desai. They felt that the serious allegations were being ignored, brushed under the carpet, and that the officer in question was instead rewarded with a prestigious foreign posting.

Desai was given permission to assume charge in London on September 6 despite requests from senior officials within the institution for an inquiry into his conduct. Notably, Geetali Tare, an Additional Deputy Comptroller & Auditor General, urged action in an August 28, 2024 communication. Tare argued that the complaint filed by the whistleblower should no longer be considered anonymous as the complainant had provided even his Aadhaar card copy and that the matters raised in the complaint provided substantial grounds for initiating a preliminary inquiry. This inquiry, she emphasised, was essential to either clear Desai’s name or confirm the truth behind the allegations, leading to appropriate action as per regulations.

Tare further revealed the need for impartiality in the inquiry, suggesting that “all personnel in the IR Division, Staff, and Headquarters wings from DG downwards” be excluded from the fact-finding committee, as well as other personnel named in the complaint. She recommended relocating these individuals to prevent any potential bias, noting that the Vigilance Wing, while newly established, may lack the resources to investigate an issue of this scale. Instead, she advised appointing officers from outside headquarters, known for their integrity, to handle the matter.

Despite these urgent appeals, Desai was sent to London. It was only when the pressure mounted that the headquarters decided to recall him in less than two months after he assumed charge as the Principal Director of Audit, London. 

On October 23, 2024, the Comptroller and Auditor General of India’s office issued an order—obtained by The Probe—which cited 'administrative reasons' for Desai’s return. The order reassigned him as Senior Deputy Accountant General in Jaipur, Rajasthan, and he was instructed to take over the charge of the post by November 10, 2024.

A senior official from the C&AG, speaking on condition of anonymity, told The Probe, "The question is, how was this gentleman sent to London when he was facing these grave allegations? Why wasn't a committee of inquiry constituted to investigate the truth? If the headquarters believed that he was innocent, then the question is, why did they hastily call him back?"

The handling of Desai's case raises serious concerns about how such grave allegations are treated within the organisation. The vague reasoning of “administrative reasons” does little to satisfy questions surrounding accountability.

Highly placed sources within the CAG's office in Delhi told The Probe that, instead of a transparent investigation, Desai’s posting orders to Rajasthan appear to be a superficial resolution, failing to address the urgent need for integrity within an institution tasked with the nation’s auditing mandate. If the CAG's own practices fall under a shadow, how can the office uphold its role in holding other institutions accountable?

We have accessed a copy of an unsigned response allegedly from Vishal Desai regarding the allegations made against him. In this reply, Desai categorically denies all accusations, describing them as “unsubstantial and malicious.” He states, “The malicious attack on my family members is very upsetting and compelling me to ponder as to where our cadre is heading to. I am sure that this unwarranted response suffices everyone’s intellectual thirst. Having said all these, I also think that such kind of baseless allegations made by few and aired by few others is a challenge to the entire IAAS fraternity.” Desai then offers a point-by-point rebuttal to some of the allegations made against him.

We reached out to Desai in a telephone conversation, informing him that we have his detailed rebuttal addressing each allegation. During the conversation, Desai stated that “internal politics within the organisation” was the driving force behind these accusations levelled against him.

The key issue here is not a verdict on Desai’s innocence or guilt; it is the CAG’s response, which ought to be above reproach. If Desai is innocent, he deserves a formal exoneration; if not, appropriate disciplinary action is warranted. The apparent hesitation in addressing such sensitive allegations head-on damages the credibility of an institution as critical as the Comptroller and Auditor General of India.

PMO Warned on Desai, Yet London Posting Followed

When Desai assumed charge in London in September 2024, the controversy surrounding him had already been simmering. The complaints against him were not limited to August 2024; in fact, the Prime Minister's Office (PMO) was alerted about the alleged issues related to Desai as early as December 14, 2023, when Mukhbain Singh who stated that he was a Section Officer at the Delhi C&AG office, formally lodged a complaint.

We have obtained the full copy of Singh’s complaint letter, which outlines the accusations against Desai: “Vishal Desai, at the outset, is involved in manipulating transfers/postings of the middle level officers, even IAAS officers through underhand dealing. It has also come to light that Vishal Desai is also manipulating to depute the AAO and AO for audits to different PSUs, government officials so that the audit report becomes weak and the financial irregularities doesn’t surface and in lieu of this, he is taking money from various PSUs in connivance with the audit officers...”

This raises a critical question: if the PMO had been alerted to these allegations as far back as December 2023, was there a directive from the PMO to the Comptroller and Auditor General of India’s office to initiate an inquiry? Two possible outcomes could have followed. If Desai was exonerated, he might still have been eligible for the overseas posting, with appropriate disciplinary action taken against anyone who had levelled false allegations against him. On the other hand, if he was found guilty, a departmental inquiry should have ensued. Yet, neither scenario appears to have taken place until then. Instead, Desai was sent to London—only to be recalled under vague “administrative reasons.” 

Enquiry Ordered Against Desai

The Probe has learned that a formal inquiry has been launched against Desai, overseen by a three-member team from the Comptroller and Auditor General of India’s office. This team includes S. Alok, the Director General of Audit, Defence Services; Roli S. Malge, the Accountant General in New Delhi; and Sreeraj Ashok, the Senior Deputy Accountant General in Bhubaneswar. When approached by The Probe, two of the officials stated that they were unable to either confirm or deny the existence of the investigation.

However, a senior official within the organisation hinted at the inquiry’s seriousness, suggesting that the involvement of high-ranking officials highlights the gravity with which these allegations are being treated now. Interestingly, one of the inquiry officers, Sreeraj Ashok, recently secured a foreign posting. A November 11, 2024, order stated: “Sreeraj Ashok, Senior Deputy Accountant General (Administration), Bhubaneswar, is transferred and posted as Director in the newly created Office of the Director of Audit, Nairobi, Kenya.”

Incidentally, the officer responsible for issuing the orders to recall Desai from his London post was Swati Pandey, the Principal Director (Personnel) in the C&AG office. It was Pandey who had signed on the document, citing “administrative reasons” for the sudden move, in less than two months after Desai had taken up his overseas posting. However, the situation takes a twist when we consider Pandey’s own recent career trajectory.

In a striking parallel, Swati Pandey was sent to Washington, D.C., as Principal Director of Audit on August 18, 2023, only to be unexpectedly recalled by December 29, 2023—just four months later—prompting questions about the reasons behind these abrupt recalls.

"Swati Pandey was called back hastily, just four months into her posting—a highly unusual move," said a senior official on condition of anonymity. "These back-to-back withdrawals of senior officials from coveted foreign postings are not standard practice at the C&AG office. Pandey’s recall, in particular, was definitely out of the ordinary, and there was more to it than meets the eye."

Another Senior Official Under Investigation

Rajiv Kumar Pandey, a 1994-batch IAAS officer, was also posted in Washington D.C as the Principal Director of Audit from 6 July 2015 to 7 September 2017. He was sent to the United States during the tenure of former CAG Shashi Kant Sharma.

Sources revealed to The Probe that after RK Pandey’s tenure in Washington D.C, disciplinary proceedings were initiated against him by the C&AG over issues that allegedly occurred during his foreign posting. However, no major action was taken against him.

A senior official within the organisation, speaking on condition of anonymity, disclosed that the Department of Personnel and Training (DoPT) recently communicated with the C&AG office regarding the alleged mishandling of R.K Pandey's case. This has led to a renewed investigation into the matter. Currently, Pandey serves as the Director General of Audit (Central Expenditure) in New Delhi, a key position within the organisation. Pandey is being investigated by Anand Mohan Bajaj, a 1990-batch IAAS officer who holds the position of DAI (Commercial and CTO) at the headquarters.

CAG Responds to The Probe

The Probe reached out to CAG Girish Chandra Murmu with a detailed questionnaire on these issues and we received a response regarding Vishal Desai Bapusaheb, Swati Pandey, and Rajiv Kumar Pandey.

In the case of Desai, the C&AG has stated: "Shri Vishal Desai's posting orders were issued much before the complaints were received. The allegations were thoroughly investigated as per the extant DoPT provisions. Subsequently, a systems study was undertaken on related issues, and he was recalled from London to India on administrative grounds as numerous alleged serious allegations surfaced against him. His presence was necessary in India to ensure that a free and fair inquiry in the allegations can take place."

In the case of Swati Pandey, the response states: "Ms Swati Pandey was selected for the overseas assignment based on her work and annual performance appraisals. She returned to India from Washington on her own volition due to health grounds and in fact bore her expenses for return."

Regarding Rajiv Kumar Pandey, the response states: "Penalty was imposed on Shri Rajeev Pandey and an inquiry has been conducted against him."

But the response from the C&AG office does not answer some key questions. In December 2023, complaints against Vishal Desai were sent to the Prime Minister’s Office (PMO), which, under usual circumstances, should have been forwarded to the C&AG. This raises questions about the timing of his London posting orders, making it highly unlikely that the orders were issued before December 2023. Further, despite the barrage of complaints against the officer, which has been acknowledged in the CAG’s response, the officer was allowed to leave India at government expense and was then recalled within a few weeks.

Regarding Swati Pandey, a senior official within the organisation remarked: “The consent of Swati Pandey was obtained before her posting to Washington, D.C. If she had health issues, she could have received the best treatment in Washington itself, with expenses covered by the Government of India. Interestingly, upon her return, she did not go on extended leave but instead assumed the role of Principal Director (Exam), a highly demanding position. Her explanation citing health reasons does not hold ground.”

As for R.K. Pandey, while the C&AG has acknowledged that an investigation has been conducted, the response does not address the second inquiry launched following the DoPT’s reprimand, as the first failed to yield any substantive action.

CAG's Accountability Crisis

These instances reveal a disconcerting reality: the Comptroller and Auditor General of India’s office, tasked with holding the government accountable, is failing to maintain its own internal checks and balances.

Much like the saying, "Caesar’s wife must be above suspicion," the CAG—more than any other institution—must maintain unimpeachable integrity, for if it falters, so too does the bedrock of governmental accountability.