Selective attack

The right-wing Opposition and the media have not shown any inclination to probe the alleged irregularities of Indian companies named in the report. Their only target is the UPA government.

JOHN CHERIAN in New Delhi

THE continuation of K. Natwar Singh in the Union Cabinet became politically untenable after his former protege, Aneil Matherani, talked to sections of the media on the controversy generated by the Volcker report. Matherani had, in a rambling interview to a magazine known for its proximity to the Bharatiya Janata Party (BJP), talked about the former External Affairs Minister's alleged involvement in the Iraqi "Oil-for-Food" deals. He said that Natwar Singh was aware of the business activities of his son Jagat Singh in Baghdad.

Natwar Singh and the Congress party, have been named "non-contractual" beneficiaries in the annexure to the final report of the Volcker Committee which investigated the purported financial improprieties surrounding the Oil-for-Food Programme supervised by the United Nations. The report has also named 125 Indian firms, including Tata International and Reliance Petroleum, as beneficiaries.

The various political figures from around the world who were targeted in the report are known to have opposed the decade-long draconian sanctions against Iraq. Most of the governments whose citizens were named in the report have either ignored it completely or condemned it as a report based on forgeries. India is the only exception. The right-wing Opposition parties and the media in India have not shown any inclination to probe the alleged irregularities of the Indian companies named in the report. Their only target is the United Progressive Alliance (UPA) government.

There is considerable speculation as to why Matherani, who was until recently India's Ambassador to Croatia, jumped the gun and chose to implicate Natwar Singh and the Congress party in the scandal. Matherani is now denying that he ever gave a formal interview or directly implicated Natwar Singh or the Congress party.

This correspondent met Matherani in Baghdad in April 2001. The Iraqi government had invited hundreds of politicians, religious personalities and mediapersons to celebrate the birthday of Saddam Hussein. Hussein's birthday was a national holiday in those days and was celebrated with great pomp and gaiety every year. The main function was in Tikrit, Saddam's hometown. Matherani said that he felt let down because Saddam had not bothered to meet his invited guests. Matherani was probably unaware that the Americans had made countless attempts to assassinate him. Saddam, anyway, rarely appeared in public after the first Gulf war.

Senior Iraqi officials in those days seemed to have very little time for the Congress party delegation, of which Matherani was part. They were more interested in delegations from Arab and East European countries. Matherani told this correspondent that he would never like to come back again to Iraq.

According to sources in the External Affairs Ministry and the Congress party, Natwar Singh had a key role in Matherani' appointment as the Ambassador to Croatia. There was considerable resentment among Foreign Service officials at the job being given to a "political" appointee. In the years when the Congress was in the Opposition, Matherani was a regular fixture at Sonia Gandhi's residence when foreign dignitaries came calling. In the 1980s, he had worked at Delhi's Taj Man Singh Hotel as a receptionist at the front desk. Most diplomats based in Delhi were convinced that Matherani had considerable influence in the highest echelons of the Congress party. Matherani apparently did nothing to counter that impression. He was a regular at most diplomatic functions as a representative of the Congress party's foreign affairs cell. His appointment initially as an Officer on Special Duty (OSD) in the External Affairs Ministry, immediately after the UPA government came to power, and his subsequent appointment as Ambassador to Croatia lent some credence to this impression.

Matherani's brief stint as the Indian envoy to Croatia turned out to be controversial, if stories emanating from South Block and diplomatic sources are to be believed. His alleged peccadilloes got him on the wrong side of the Croatian authorities. The External Affairs Ministry was not happy with his shifting base to India for months on end. He was officially recalled as Ambassador to Croatia before the Volcker controversy broke out. By that time, Matherani had fallen out with his erstwhile mentor, Natwar Singh.

The last Iraqi Ambassador to India, Sallah al-Mukhtar, has said that he believes the documents on which the Volcker Committee relied wee forged. Mukhtar, who is now leading the Ba'ath underground resistance inside Iraq, has pointed out that the names appearing in the Volcker report were first published in the Iraqi newspaper Al Mada, which belongs to a faction of the Iraqi Communist Party, soon after the fall of Baghdad to American forces. This section of the Iraqi Communist Party had supported the American game plan in Iraq and is closely allied with people such as Ahmad Chalabi. It is represented in the present United States-backed government in Baghdad.

Reports in the American media have said that the origin of the forged documents can be traced to the doors of Chalabi. Mukhtar has also refuted the Matherani allegation that Natwar Singh had negotiated Oil-for-Food deals during the visit of the Iraqi Oil Minister to Delhi. Mukhtar has vehemently denied that any Oil-for-Food deals were discussed when senior Iraqi Ministers visited India.

The former Indian Ambassador to Iraq wrote to the National Democratic Alliance (NDA) government in early 2004 about the Congress party and Natwar Singh being mentioned as beneficiaries. No cognisance of the letter was taken. Now there are allegations that people close to former Prime Minister Atal Bihari Vajpayee were also involved in oil deals with the Iraqi government.

Ram Naik, who was Petroleum Minster in the NDA government, paid a highly publicised visit to Baghdad and negotiated oil exploration concessions for Indian companies. Even Aneil Matherani has now joined the chorus demanding that Ram Naik's role in the affair be investigated. Papers relating to Ram Naik's visit to Baghdad are reported to be missing from the files in the External Affairs Ministry.

Those who still have a soft corner for Natwar Singh are of the opinion that his decision to take his son along with him to Baghdad was an inopportune one. Jagat Singh was back in Baghdad soon after that visit. His friend, Andaleeb Sehgal, became a frequent visitor to Baghdad after that. According to knowledgeable sources, Indian businessmen involved in Oil-for-Food contracts only got small commissions.

The only privilege the sovereign government of Iraq was given under the Oil-for-Food scheme was to choose the companies and individuals to sell its oil. The scheme fetched the Iraqi government only $1.8 billion. The companies and individuals who got the oil vouchers from the government received only a paltry amount for acting as go-betweens. The Iraqi government used the unaccounted money generated by the marketing of the oil in the international market for infrastructural development. This correspondent saw a remarkable improvement in the standard of living in Baghdad after the Oil-for-Food Programme started. The bulk of the oil revenues were generated by the smuggling of Iraqi oil to Jordan and Turkey, with the acquiescence of the U.S. Most of the smuggled oil went to big American oil companies.

THE Volcker report states that the decision to "allow Iraq to choose its buyers empowered Iraq with economic and political leverage to advance its broader interest in overturning the sanctions regime. Iraq selected oil recipients in order to influence foreign policy and international public opinion in its favour.

Several years into the programme, Iraq realised that it could generate illicit income outside of the United Nations oversight by requiring its oil buyers to pay `surcharges' of generally between 10 and 30 cents per barrel of oil".

After Matherani's allegations, Natwar Singh's own party and his friends in other parties started distancing themselves from him. Communist Party of India (CPI) general secretary A.B. Bardhan, who only weeks before had backed Natwar Singh, said that it would be better for the Minister to resign from the Cabinet. Bardhan said in a statement that Natwar Singh's resignation would help to neutralise the malicious campaign launched by the BJP.

The Communist Party of India-Marxist (CPI-M) has been in favour of an honest probe into the affair ever since the controversy broke out. The party's general secretary, Prakash Karat, said in the second week of December that the standards applied to the investigations into Natwar Singh's case should be applied to all the others. He called for the investigations to be expanded further to include other individuals and companies who figure on Volcker's list.