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Oil-for-Food scam : Govt. set to order independent probe

	November 07, 2005

Faced with increasing opposition criticism of lack of Government response to the allegations of involvement of the Congress and External Affairs Minister K. Natwar Singh in the Iraqi oil-for-food scam, as brought out by the Volcker Committee appointed by UN Secretary General Kofi Annan, the Indian Government is set to order a probe by an independent person or body into the charges. Prime Minister Manmohan Singh and Congress president Sonia Gandhi have held two rounds of consultations to discuss the political fall out of the Volcker Committee disclosures and ways in which the damage could be controlled.



The assessment is that to establish the Government’s credibility and to satisfy public opinion, the allegations made in the Volcker Committee report need to be probed independently. It is expected that either a retired Chief Justice of India or some other eminent public personality could be asked to examine the report. He would be allowed to travel to New York, seek the help of the Volcker Committee staff and call for and try to get other records and documents, and if necessary, examine the indicted individuals. An announcement of the setting up of the independent probe is expected on Nov. 7, or within a couple of days.



Preliminary scrutiny of the report by the political and administrative leadership has convinced them that the allegations against the Congress are untrue. The assessment is that the matter concerns only individuals and not any political party or organisation. The Congress, on its part, has described as “baseless” a report quoting a non-resident Indian (NRI), Haridarshan Singh Majie that Natwar Singh during his visit to Iraq a few years back carried a letter from party president Sonia Gandhi for the then Iraqi President Saddam Hussein. Congress general secretary Ambika Soni said such reports are baseless and aimed at sensationalising the issue.



Ambika Soni said it is normal for the leader of the party to send messages of goodwill to heads of countries, Congress delegations are visiting. “This cannot be linked to the contracts issue, it is wrong.”



Soni said she had heard the NRI’s comments aired by a television news network and that the individual did not link the allegations to the letter. In any case, “nobody can dare ask the Congress president to write such a letter. Neither the party, nor the Congress president has any role and the party will take all steps necessary to defend its name and protect its prestige.”







Natwar Singh refuses to step down



Meanwhile, External Affairs Minister Natwar Singh has categorically rejected the demand for his resignation pending a probe into the allegations against him in the Volcker Committee Report. In a television interview, he questioned the credibility of the findings of the Volcker Committee.



Natwar Singh said Paul Volcker, the author of the controversial report on the United Nations’ oil-for-food programme, had not bothered to contact the Congress, or him, before recording the findings. Asserting that the report was based on the records of the current Iraqi Government, which has “no credibility in the world,” he said “let him (Volcker) produce evidence.”



Volcker had said in New York that all those named in the report were notified and given a chance to clarify on the contents about them. He also said that he was not aware of the fact that Singh was the External Affairs Minister of India.



The report by the former Federal Reserve chairman alleged that $1.8 billion in bribes and illegal surcharge was paid to the regime of former Iraqi president Saddam Hussein.



The External Affairs Minister said allegations in the report were an attempt to malign the oldest democratic and secular party in the world. He said his family had no business dealings with Andleep Sehgal, who owns Hamdan Exports, a firm on whose behalf Swiss company Masefield AG is reported to have lifted oil barrels “under allotments to Congress and Natwar Singh” made by the Saddam Hussein regime in 2001.



Apart from the Congress and Natwar Singh, another political personality named in the scam, Bhim Singh of Jammu and Kashmir Panthers Party has also denied receiving prior communication from the Volcker Committee about the finding against him. Speaking in New Delhi on Saturday, Nov. 5, Bhim Singh said, “I did not receive any notice from either the independent committee or from any other United Nations body before I was named as a non-contractual beneficiary of oil-for-food allocations.”



Observers say that non-communication of the adverse findings is a violation of the guidelines supposed to govern the UN appointed inquiry committee. The UN committee appears to have flouted its own investigative guidelines in making an adverse finding against the Congress party, External Affairs Minister Natwar Singh and Jammu and Kashmir politician Bhim Singh - without affording them a chance to defend themselves.



Under the Investigation Guidelines, it was incumbent upon the IIC’s investigators to inform any “person or entity” of the information upon which an “adverse finding” against them was being made in a “written report.”







A day earlier, Volcker speaking to reporters in New York on Thursday, Nov. 3, had claimed that everyone named in the report was notified and given a chance to clarify on the comments about them. He is yet to respond to the latest statements from the Congress, Natwar Singh and Bhim Singh asking for proof that they were notified.





Son’s business associate questioned



The first steps in probing allegations of wrong doing against External Affairs Minister Natwar Singh in Iraq’s oil-for-food scam were taken on Sunday (Nov. 6) with the questioning of his son’s business associate, Andaleep Sehgal, who is said to have played a key role in the deal.



Sehgal had been ignoring summons for the past two days in spite of these having been served at his Greater Kailash and Jor Bagh residences. The security agencies had on Saturday issued a “Look Out Circular” against him to ensure he didn’t slip out of the country.



Sehgal and his firm Hamdan Exports are the ones named in the Volcker Committee report as having paid $ 748,540 (Rs.30 million) into a Jordanian Bank as an “illegal surcharge” for Iraqi oil, with the money eventually reaching then Iraqi dictator Saddam Hussein.



The payments were made on behalf of a firm named Masefield against oil rights allotted under the oil-for-food programme to Natwar Singh and the Congress party, the Volcker report says.



Natwar Singh, whose son Jagat Singh admits Sehgal is his friend but has no business dealings with him, has rubbished the allegation and rejected demands for his resignation over the issue, saying he enjoys the confidence of Prime Minister Manmohan Singh.





Iraqi officials sought surcharge for oil : Ram Naik



Former Petroleum Minister Ram Naik, meanwhile, said that senior Iraqi officials had sought a surcharge for supplying crude oil to India under the UN food-for-oil programme in 2002. He said that a top Iraqi official had indicated that Baghdad would supply additional crude to the Indian Oil Corporation if New New Delhi agreed to deposit 30 to 50 cents per barrel, over and above, the UN dictated price for the Basra light crude oil into an Iraqi bank account. Ram Naik said that the NDA Government believed in transparency in payments and refused to pay anything over and above the official selling price. A result of this was till Saddam was overthrown in 2003, India hardly got any oil on Government to Government contracts and IOC had to buy some of it through international tender after a certificate from the UN was obtained for each cargo. Crude oil imports from Iraq jumped five fold after US forces took over the oil establishment in that country.





Food scam also



Meanwhile, there are reports that supply of food to Saddam Hussein’s regime in return for oil may have involved kickbacks. The Volcker Committee found that the bulk of Saddam Hussein’s illicit income came from kickbacks provided by individual entities and firms involved in providing humanitarian goods to Iraq. The report says that Saddam Hussein received $1.55 billion in the form of kickbacks from those who secured contracts to provide food, medicines and other aid material.



In the name of providing relief to the people of Iraq, millions of whom were starving due to the UN sanctions, such entities fattened themselves - and the corrupt regime in Baghdad - by indulging in what could be the largest skimming operation in recent times.



“As with its selection of oil purchasers, political considerations influenced Iraq’s selection of humanitarian vendors”, the Volcker report says, adding, “the kickbacks policy began in mid-1999 from Iraq’s effort to recoup purported costs it incurred to transport goods to inland destinations after their arrival by sea at the Gulf Port of Umm Qasr.”





Shadow over cabinet reshuffle



The controversy over the oil-for-food scam has cast a shadow over the proposed reshuffle and expansion of the Manmohan Singh Ministry. Natwar Singh appears to have secured a temporary reprieve and the coming cabinet reshuffle may be a minor exercise without any link with the Natwar Singh episode. Congress sources say that the party’s dilemma is that firing Natwar Singh could be construed as an indirect admission of guilt.



Meanwhile, the BJP has been holding demonstrations in New Delhi and in several other cities to protest against Natwar Singh’s continuance in the Government. They want him to quit owning responsibility for his part of the scam.



The BJP has also decided to raise the issue in Parliament during the coming Winter Session beginning on November 23.