Dubious documents, unwary targets

Published : Dec 02, 2005 00:00 IST

Trucks from an Indian manufacturer headed for Iraq under the Oil-For-Food Programme, at Mumbai port in February 2004. - ARKO DATTA/REUTERS

Trucks from an Indian manufacturer headed for Iraq under the Oil-For-Food Programme, at Mumbai port in February 2004. - ARKO DATTA/REUTERS

It is unlikely that any clinching evidence will emerge backing the Volcker Report as Iraqi officials who can explain the nature of transactions that appear suspicious are not available as witnesses.

THE adverse impact of the Volcker Report has been felt only on Indian politics so far, though leading politicians, political parties and business institutions from different parts of the world have figured in it. The names of External Affairs Minister K. Natwar Singh and the Congress party figure in the fifth and final report of the Committee as "non-contractual" beneficiaries. They share space with the likes of Megawati Sukarnoputri, the former President of Indonesia, and other leading political figures belonging to progressive parties such as the African National Congress.

According to the Report, Rev. Jean-Marie Benjamin, a Roman Catholic priest, received a $140,000 donation for his charity for helping a businessman buy more than two million barrels of oil. Benjamin was an outspoken critic of the sanctions against Iraq. The probe by Paul Volcker revealed that around half of the 4,500 companies that participated in the programme paid under-the-table cash. These revelations have scarcely caused a ripple in the politics of the countries concerned so far.

The Volcker Committee had come to the conclusion that the Iraqi government manipulated the Oil-For-Food Programme (OFFP) to generate around $1.8 billion in "kickbacks" for itself.

The Report has said that Natwar Singh and the Congress were allotted four million barrels each. Natwar Singh, echoing British politician George Galloway, said he had never seen "a barrel of oil in his life". Immediately after the invasion of Iraq in March 2003, the British and American governments had charged Galloway with making money from the oil-for-food deal. Early this year, he successfully rebutted the charge in front of a United States Senata Subcommittee, characterising the charges as a "web of lies". The Iraqi government papers implicating Galloway were found to be forged.

However, the Volcker panel has once again named Galloway as a recipient of money generated by the OFFP funds. There were reports in the Western media that the incarcerated Iraqi leader Tariq Aziz had personally implicated Galloway. In the last week of October, Aziz clarified through his lawyer that he had done no such thing. Most of the evidence produced against Galloway by the Senate Committee was based on photocopies.

Meanwhile, the Congress has written to U.N. Secretary-General Kofi Annan to look into the specific complaints made against the party and the External Affairs Minister. Senior U.N. officials have said that the Volcker Report should not be viewed as a charge-sheet.

It is well known that after the American invasion Baghdad was awash with forged documents as the case against Galloway proved. Hazim al Amin, a journalist working for the London-based Arabic newspaper al Hayat, had written that "document experts in Baghdad talk about large number of forgeries circulating in Baghdad", particularly as a large number of letterheads of key Ministries had been stolen. In an article published on November 13, 2003, he had said that the media should treat with suspicion all documents emerging from the Iraqi government.

Sajad Ahmad Ali, an Iraqi, admitted in an article that appeared in the Palestinian daily Duniya-al-Watan, that he was hired to forge contracts implicating personalities and organisations that took a strong stand against the American blockade and plans for war against Iraq.

This did not mean that war profiteers and carpetbaggers did not take advantage of the situation in Iraq once the OFFP started being implemented. As many commentators have pointed out, the programme was poorly planned and managed, leaving plenty of scope for corruption and underhand dealings. The oil that Iraq was allowed to export was priced much below the prevailing international market price. The Iraqi government devised some unconventional ways of conducting business so as to get the most out of the oil it exported.

Before the scheme was implemented, more than a million Iraqis had died, mainly owing to the impact of the draconian sanctions. It was sanctions that prevented Iraq from legitimately selling oil in the international market and providing a normal life for its citizens.

In the two years before the American invasion of Iraq, this writer witnessed tangible progress in the living standards and infrastructure of the country. It was evident that much of the so-called illicit profits made in the oil-for-food scam was being funnelled into the economy. The Iraqi government also preferred to divert some of the business generated from the deal towards people who it thought could be trusted.

During a visit to Baghdad in April 2003, this writer met with many Indian businessmen. They all claimed that they were into trading. In April 2001, Natwar Singh's son Jagat was in Baghdad. At a chance meeting at the Indian Ambassador's office in Baghdad, he introduced himself as the president of the National Students Union of India (NSUI) and said that he was part of the Congress delegation visiting Iraq at the time.

Recent history is replete with instances of how countries under American sanctions resorted to inventive ways to survive. The former Yugoslavia under Slobodan Milosevic resorted to smuggling and other unorthodox economic practices to survive. No secret bank accounts have been traced in the names of either Milosevic or Saddam Hussein.

Before the oil-for-food scheme was implemented, Washington had turned a blind eye to the rampant smuggling of Iraqi oil. Most of the oil transited through the territory of America's allies in the region and the bulk of the oil was destined for the U.S. markets.

A report in The San Francisco Bay Guardian said that during U.S. Vice-President Dick Cheney's tenure as the chief executive of Halliburton Inc in the 1990s, the firm did roaring business with Iraq. Financial Times of London reported that Halliburton oversaw $23.8 million of business contracts related to Iraq's oil industry before Cheney became the Vice-President.

The monitoring committee appointed by the Security Council to keep a close watch on transactions connected with the Programme, on which the U.S. was represented, did not bother to keep a strict watch on contracts involving Iraqi oil. On the other hand, essential humanitarian goods needed by the Iraqi people, such as medicine and essential spare parts to keep emergency services such as hospitals running, were routinely refused permission.

On many occasions, U.N. administrators alerted the monitoring committee about pricing irregularities involving Iraqi oil exports. The fact that 80 per cent of the oil exported under the OFFP ended up in the U.S market may not have been a mere coincidence. The most lucrative official deals went to America's allies such as Jordan and Turkey.

An unclassified State Department document, which surfaced earlier in the year, actually deemed the illegal sale of Iraqi oil to countries such as Turkey and Jordan to be in America's "national interests" though they generated billions of dollars of unmonitored revenue for the Iraqi government. Even after the U.S. forces occupied Iraq, there have been serious allegations about the way the Iraqi oil sector has been managed.

Many American commentators are of the view that the entire oil-for-food scandal was manipulated by the "neo-cons" in the Bush administration to tar nations, individuals and organisations that opposed the war in Iraq, starting with the U.N. The American media were full of stories by late 2004 that Kofi Annan's job was on the line as a result of the scandal. Annan became a marked man after he described the U.S. invasion of Iraq as "illegal". Volcker himself has admitted that he had to water down his final report so that Kofi Annan would be able to keep his job. The only person of consequence who has lost his job in the aftermath of the Volcker Report is Natwar Singh. Kofi Annan continues to be Secretary-General though his son Kojo Annan is known to have made millions from contracts stemming out of the oil-for-food humanitarian effort.

A day after Natwar Singh was divested of his portfolio, Prime Minister Manmohan Singh reiterated that the Volcker Report was "unsubstantiated" and that there was no proof against Natwar Singh or the Congress. "There is no proof in the report. There are a couple of tables and there were names of the Congress and Natwar Singh. Anyone can write any name, any story. That does not prove anything." Manmohan Singh said the government had set up a judicial commission under the former Chief Justice of India, R.S. Pathak, to delve into the roots of the controversy. The government also named a former diplomat, Virendra Dayal, as its "special envoy" to liase with the U.N. on the issue.

Switzerland, which was the hub of the Iraq oil trade, said that it had frozen bank accounts of some of the people named in the Volcker Report. Russian Foreign Minister Sergei Lavrov said that many of the documents used in the report, which implicated senior Russian officials, were fabricated. Lavrov, however, said his government would study the report carefully.

There are many in India who find the timing of the Report suspicious. Most of the organisations and individuals named in it were highly critical of American policies towards Iraq and its people. "The Volcker Report should be seen in the context of the brutal and unjust sanctions imposed on Iraq after the first Gulf War of 1991," CPI(M) general secretary Prakash Karat told Frontline. He said the sympathy of the Indian people was with Iraq because of the curtailment of Iraqi sovereignty and the imposition of draconian sanctions.

According to the CPI(M) leader, Iraq had "every right" to defeat the sanctions and get the money it was entitled to in the sale of its oil. Had the sanctions been lifted after the first Gulf War ended, Iraq, it is estimated, would have generated tremendous amounts of revenue from the sale of oil. Even at a price of $10 a barrel Iraq would have collected $126 billion in the last 14 years.

According to Dirk Salomons, director of the Programme for Humanitarian Affairs in Columbia University, it was not U.S. or U.N. money that was stolen from the Programme. It was money generated by the sale of Iraqi oil meant to be used for the benefit of the Iraqi people.

"The right wing lobby in the U.S. was gunning for the U.N. leadership from the day the oil-for-food deal came into effect in 1996. The Volcker Committee was set up in response to the pressure from these groups," said Karat. He said the CPI(M) could not accept the argument that all those who did business with Iraq under the OFFP were corrupt.

The Iraq Survey Group, headed by Charles Duelfer, submitted a report in late 2004 indicating that there were no weapons of mass destruction (WMDs) in Iraq. But the Report went on to say that the profits the Iraqi government was making out of the OFFP could be used in the future to rebuild WMDs.

Interestingly, Volcker himself told the American media that he was having problems with the Bush administration. "I can't say that the American government has been eager, or officials of the American administration have been particularly eager in some cases." He went on to add that American companies were involved in the scandal, mostly through buying smuggled Iraqi oil. "To the extent the United States knew what was going on in some of these areas, why didn't they do more about it?" Volcker asked. He pointed out that the controversy generated by the Report helped to divert attention from the multi-billion-dollar scams American companies like Halliburton are involved in.

Prakash Karat said the government should look into the circumstances under which the names of Natwar Singh, the Congress and some private companies figured in the Volcker Report. "The government should fully investigate and ascertain evidence and facts and then come to a conclusion," he said. Left leaders share the view that a strong pro-American lobby in the present government is happy with the turn of events. Though Natwar Singh is no radical, he is among the few in the top leadership of the Congress who at least talked about the need for retaining non-alignment as a pillar of India's foreign policy. Those close to him say he was not kept completely in the loop when the decision to vote against Iran in the International Atomic Energy Agency (IAEA) was taken. The prominent personalities in the queue for the External Affairs Minister's position are known for their tilt towards Washington.

It is unlikely that any clinching evidence will emerge about the Report as the Iraqi officials who can fully explain the nature of transactions that may appear to be suspicious are not available as witnesses; the present government continues to be under American tutelage. Jude Wanniski, a former associate editor of The Wall Street Journal, has said the Volcker Report is "just another trick of the neo-conservatives to blow away anyone who gets in the way of their plans for a global empire".

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