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JUST days before troops of the United States-led coalition stormed Baghdad, Iraq's then ambassador in New Delhi sat down with a senior Indian journalist for dinner. It was, he noted jokingly, their own private last supper.
Much of the conversation that evening revolved around the Congress party's conduct on the eve of the war. For weeks, the diplomat said, he had struggled to secure an appointment with Congress president Sonia Gandhi. The audience, when granted, was perfunctory. Iraq had reason to be unhappy, for it had stood by India even at times when much of the world seemed hostile to New Delhi. In an article in 2003, Senior Research and Analysis Wing (RAW) official B. Raman had even recorded that only two covert services, including that of Iraq, had helped India locate the perpetrators of the Mumbai serial blasts. The United States, he wrote, seemed concerned only "to cover up the involvement of Pakistan's ISI".
Now, in a spectacular twist of fate, the party Sonia Gandhi heads stands accused of taking payoffs from the regime of Iraqi President Saddam Hussein.
In a country where politicians have rarely resigned even in the face of documented financial impropriety or evidence of having engineered violence, the removal from office of External Affairs Minister K. Natwar Singh has been greeted with incredulity. Coming after an energetic campaign by the Bharatiya Janata Party (BJP), which received the unconditional support of print and television platforms uncritically supportive of the U.S., Natwar Singh's removal has done little to still the Congress' critics. BJP leaders have demanded that the Central Bureau of Investigation (CBI) inquire into his links with the Iraqi regime. Others have expressed outrage that the politician continues to be a Minister - albeit one without a portfolio.
As a judicial inquiry headed by former Chief Justice R.S. Pathak gets under way, and senior diplomat Virendra Dayal sets about locating documents and witnesses from around the world, one key question has been drowned in the clamour: just what is it that Natwar Singh is charged with having done?
Oil-for-food and the Saddam payoffs
Much of the discussion on the oil-for-food issue in India has conflated two separate issues: irregularities and problems within the Oil-For-Food Programme (OFFP) itself, and its alleged use as an instrument of patronage to win supporters for the regime of Saddam Hussein.
Sanctions were imposed on Iraq shortly before a coalition of forces led by the U.S. attacked that country, signalling the start of the first Gulf War, in 1990. For the next 12 years - right up to the time the Saddam Hussein regime was removed as a consequence of the second Gulf War - Iraq was prohibited from selling its principal resource. A wealth of documentation exists to show that the principal casualty of the sanctions was not the regime in Baghdad, but the Iraqi people. Over a million and a half civilians, a third of them children below the age of five, died because of shortages of food and medicine. At the outset, the object of the sanctions regime was clear: to make it impossible for Saddam Hussein to remain in power, no matter what the cost.
worldwide outrage over this human suffering forced the implementation of the OFFP from 1996. Every six months, the United Nations Office for Iraq would determine the quantum of oil to be sold. Two-thirds of the proceeds, after deducting claims for reparations made by the U.S. and its allies, went to a designated account. Contracts for humanitarian supplies to Iraq were paid for from this account, after they were cleared by a United Nations Security Council Committee, which included the U.S. and the United Kingdom. Not surprisingly, the battered Iraqi regime sought to gain what it could from the system for running the government - leading to what are now being described as corporate kickbacks and illegal payments.
In essence, these illegal payments fell into three categories. First, $5.7 billion worth of oil was illegally smuggled out of Iraq, a practice which benefited individuals in that country and their collaborators in Turkey, Jordan and Syria. Second, since the authorised price for oil sales was below the market price, buyers paid the difference - the so-called surcharge in Volcker parlance - into covertly run Iraqi government accounts. Finally, Iraqi officials sometimes paid companies with which they had contracted for humanitarian supplies excessive rates - and arranged for the difference to be sent back. Both these methods, used to evade an ethically indefensible sanctions regime, generated an estimated $1.779 billion for the Saddam Hussein regime - just a small part of the $100-billion worth of transactions under the OFFP.
For the U.S., even this token defiance was galling. Soon, critics of U.S. policy were targeted by allegations that they had received bribes from Iraq. Reports that the Congress party received such payoffs went into circulation in early 2004, after the Baghdad-based newspaper al-Mada reproduced documents leaked from the Iraqi Governing Council that purported to show 270 individuals and parties as beneficiaries of Saddam Hussein's largesse. Allegedly prepared by officials at the Iraqi Oil Ministry, the documents purported to show that the individuals who had received allocations from the Saddam Hussein-led regime included British Member of Parliament George Galloway, Indonesian President Megawati Sukarnoputri, the former French Interior Minister Charles Pasqua, and the head of the OFFP Benon Sevan.
Stung by the criticism, the U.N. felt compelled to respond to the payoffs charges - especially after Secretary-General Kofi Annan's son was named as one of the beneficiaries of the irregularities in the scandal. Paul Volcker, who had previously served as head of the U.S. Federal Reserve, was appointed to lead an Independent Inquiry Committee (IIC) to investigate the scandal, along with the former South African Judge Richard Goldstone, and the criminal law expert Mark Pieth.
Their brief was not to look at individual payoffs, but at possible irregularities in U.N. procedures and allegations of improper conduct by top officials of the organisation.
Few facts, many conjectures
A rich study of the Volcker Report published in this issue, tells us what he found and where he failed. It also tells us what he did not do: investigate India in general, and the Congress or Natwar Singh in particular.
For all the reams of newsprint and hours of prime-time television committed to what the Volcker Committee had to say about India, there is precious little understanding of just what Natwar Singh, his son Jagat Singh, and their relative and long-standing associate Andaleeb `Andy' Sehgal are supposed to have done. One very good reason exists for this confusion, even if the right-wing media have succeeded in ensuring that no one has paid attention to the fact: if the Volcker Committee did find any evidence of value incriminating Natwar Singh and the Congress, it most certainly does not figure in its report. There is not one word in the report proper, a little time spent reading the document would make clear, about Natwar Singh, his politician-son, or businessman Sehgal.
The real story, so to speak, lies in the footnotes. Natwar Singh's name, along with that of the Congress, figures in an annexure to the Volcker Report, a table recording figures to whom the Saddam Hussein regime made oil allocations. The names of Natwar Singh and the Congress figure in Table 3 as "non-contractual beneficiaries" - parties who, without signing a legal agreement with the then government of Iraq, were given allocations of oil they could sell. Four million barrels of oil were allegedly allotted to Natwar Singh, of which the Swiss oil-trading company Masefield allegedly lifted some 1.936 million barrels. For its part, the Congress was allegedly allotted four million barrels; Masefield, again acting as an agent for the principals who received the allocations, allegedly lifted 1.001 million barrels. Jammu and Kashmir Panthers Party leader Bhim Singh also allegedly received an allocation, which was not lifted.
Case closed? Not quite. Nowhere does the Volcker Report offer even the slightest documentation proving three crucial facts: that the Congress or Natwar Singh actually knew that they had been given allocations by the Iraqi government; that they entered into any kind of legal or informal arrangement with Masefield; and, critically, that these allocations were indeed made to the named recipients by the Saddam Hussein regime.
At least one supposed non-contractual beneficiary - the former Russian bureaucrat Alexander Voloshin - has produced plausible evidence that signed letters and faxes issued by him authorising oil sales were in fact forged. Indeed, The Christian Science Monitor was forced to issue an apology and pay George Galloway compensation after it turned out that documents linking him to oil-bribes were in fact sophisticated forgeries.
To understand why the integrity of the documentation is an important issue, one needs to understand the context in which the charges were first made. Soon after the al-Mada story appeared, another Iraqi newspaper, al-Watan, carried an interview with a former official who admitted to having forged the supposed evidence. As the American journalist Seth Ackerman has pointed out, worries about reliability of the al-Mada documents were well-founded. Among those who played a leading role in the U.S.-installed Iraqi Governing Council was Ahmad Chalabi, the politician who oversaw the Oil Ministry at the time the al-Mada documents were leaked. Chalabi's Iraqi National Congress, according to an interview given to The New Yorker by the former Central Intelligence Agency (CIA) officer Robert Baer, ran a high-technology forgery department, which specialised in producing fake documents for spreading disinformation about Saddam Hussein's regime.
In the case of Natwar Singh and the Congress, though, there are no documents, forged or otherwise, available so far. According to the Volcker Committee, the references to allocations made to Natwar Singh and the Congress were found in Iraqi government documents. So far, however, those documents have not been made available for scrutiny. No one even knows if Natwar Singh or the Congress even corresponded with the Iraqi government or Masefield. Indeed, although Volcker initially claimed that all those named in the Report had initially been issued an opportunity to respond to the allegations against them, it rapidly turned out that no notice had been sent to any of the three Indian entities at the heart of the controversy. Bhim Singh and Natwar Singh are both on record as having stated that they only learned of the allegations through the media.
Guilt by insinuation
What we have, then, is nothing other than that most sordid of political smear-tactics, guilt by insinuation.
Media reports have made much of the fact that Jagat Singh, for example, visited Iraq in the midst of the period when the OFFP was in operation. So did dozens of other international political figures and journalists - including some of those now writing on the controversy. While there is little doubt that Jagat Singh was both politically and personally friendly with key figures in the Saddam Hussein regime, that can by no stretch of imagination be described as a crime. Not a single piece of evidence has come out to support the proposition that he used the opportunity to handle funds for the Congress or to lobby for business for his friends.
Sehgal, for his part, has flatly denied being in Iraq at the time when his company, Hamdan Exports, is alleged to have routed kickbacks to the Saddam Hussein regime through the Jordan National Bank. Although Sehgal has made it clear that he did attempt to win Iraqi contracts in 2001, as did hundreds of others from around the world, he claims his efforts were unsuccessful. Sources in the Enforcement Directorate, who along with the Income-Tax Department questioned Sehgal on November 7, told Frontline they had not so far found any evidence of illegal foreign currency transfers having been made by Hamdan Exports - a company not named in the Volcker Report. No financial linkages have so far been discovered between Masefield and Hamdan Exports either. Even if they were, it is worth noting that such linkages would not in themselves constitute evidence of wrongdoing.
Put simply, the sole evidence - if it can be so described - against Natwar Singh is that his son's friend attempted to secure contracts in Iraq. It is here that elements of the media have been at their most disingenuous. Sehgal's controversial business history, notably in Punjab, and Jagat Singh's unhappy personal life have all been used to build an aura of controversy around them. Inner-party Congress politics, too, played a role, for the evidence itself was far too flimsy to warrant resignation. Indeed, one important reason why the Government of India has chosen to institute a judicial inquiry rather than register a criminal case, as some in the BJP have demanded, is that no offence against Indian or international law has so far been established to have taken place: no case can be registered, even if the government wishes to.
All of this is of a piece with the sad history of the inquisition against those who supposedly received bribes from Saddam Hussein in return for supporting his regime. In the weeks and months to come, we will have a better idea of how credible some of the allegations that have emerged in recent days in fact are. It is possible, for example, that someone claiming to represent the Congress did seek benefit from the regime of Saddam Hussein. It is possible that someone within the regime sought to use the OFFP as a means to reward the regime's small pool of supporters across the world. It is possible, too, that individuals in Iraq pretended to be making allocations to supporters - and siphoned off the funds.
And it is possible that none of the large mass of conjecture and speculation on the subject turns out to be true: that the documents on which the Volcker Report based Table 3 are a fabrication.
We just do not know.
Even before R.S. Pathak and Virendra Dayal begin their work, one fact is already clear. For decades, India prided itself on an independent foreign policy with a commitment not just to pragmatic concerns but also to principles. Natwar Singh's conviction-before-trial has established, as nothing else perhaps could have, just how expensive standing up for those principles can prove.
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