Chronicle of a scandal foretold

The Paul Volcker report unlocks memory and sets in motion a process that could imperil more than today's headline grabbers

Special correspondent  Delhi
In March 2004, a good eighteen months before Natwar Singh's name figured in an annexure of the Paul Volcker committee report, an independent commission of enquiry constituted by the United Nations Security Council to probe the messy $100 billion Iraq's oil for food programme (OFP), Hardnews hinted at a Congress leader who had got an oil coupon or a voucher from Iraqi Premier Tariq Aziz to be sold in the open market for a mark —up and who routed his money through a Singapore-based company. Due to the absence of documents we did not mention Natwar Singh's name, but we had enough testimonies from individuals who claimed that his and his son's name kept cropping up in Baghdad on the issue of the OFP. Call it prescience or our own understanding of politics we had categorically stated that the exposure of this deal could cause a "headache for the Congress-led alliance". Interestingly at that time, the National Democratic Alliance (NDA) government was still in power and the Congress-led United Progressive Alliance (UPA) was trying to lift itself off the ground.

In another news item that appeared in an earlier issue of Hardnews, we had also hinted at a sex scandal involving a close relative of a senior leader in the NDA government and one of Saddam Hussein's slain sons. There are reports that the photographic evidence of orgies involving relatives of top politicians and public sector managers, which reportedly took place in Basra, are in the possession of the same people who exposed the beneficiaries of the OFP. If that evidence finds its way to India then it would leave a lot of red faces in the BJP, which is now baying at Natwar Singh's alleged involvement in the OFP scandal.

Natwar Singh, who has expressed righteous indignation over his name figurng in the Volcker report, refused to leave the foreign office till he was forced by Prime Minister Manmohan Singh and UPA president, Sonia Gandhi. He had insisted that he had been wronged as no notices had been sent to him by the Volcker secretariat. In fact, he drove Indian ambassador to UN, Nirupam Sen, to meet Volcker to find out why they did not inform him before putting his name in the annexure. A government source said, "Volcker did not send a notice to Natwar Singh as he had not left his address behind with the Iraqi oil ministry. Also he was spelt as Natora Singh in Arabic." He is likely to see reason once Virender Dayal, special envoy of the prime minister, Manmohan Singh, submits his report based on the documents that he has got from the UN.

Singh had also claimed that in his long public life his name had never figured in any kind of corruption scandal. He has probably forgotten the Jain hawala scandal that rocked India in the 1990s, where his name had similarly figured in an accountant's diary. The hawala scandal came to the fore when a diary was recovered from an accountant that had the details of pay-offs to most of the top Indian politicians. LK Advani, Buta Singh, Yashwant Sinha, and many other politicians and bureaucrats figured in that list. Although the hawala case was dismissed because of the lack of corroborative evidence, it is clear that the former diplomat is not a careful man. Neither is he as sagacious as other politicians of the BJP who use front companies for soaking up kickbacks.
The OFP is similar to the hawala scandal in another way: all the proceeds from the kickbacks were brought back to India through the same hawala route. Most of the alleged hawala recipients were those who had received pay-offs from French power equipment suppliers. In the OFP scandal, too, most of the Europe-based banks and dealers have been accused of creaming off funds from the oil deals.

Quite obviously, the OFP, besides being about money and corruption, is also about politics. Saddam Hussein, cash-strapped he may have been, was using the oil coupons to build up support amongst all those who were disagreeable with the United States' policies. He worked on widening the chasm between the US and Europe by supporting and sustaining political parties and individuals who could articulate his point of view and also help him in making money on the sly. He corrupted all those he could to build up support for his cause. And there were a lot many, who saw virtue in being corrupted by him. The gravaman of their argument was that this was the only way that they could get back at the US. The United Nations that was running the programme also seemed to maintain a Nelson's eye to the moneymaking enterprise under the OFP as it at some stage realised the unjust nature of the sanctions against Iraq. Director of OFP, Benon Sevan, too, figures in the documents that emerged from Iraq's oil ministry and were later published in a Baghdad daily, Al Mada. The Volcker report would lead one to believe that the 38-floors of the UN headquarters were reeking of corruption. Kofi Annan's own son, Kojo, has been found with his hand on the till.

Saddam issued substantial contracts to Russia and China, security council members both, on his right side. He also gave money to traditional political parties and their leaders who have been making a living publicly hating US. This coalition of cohorts was linked by the common objective of making money from oil, an instance being Indian non-contractual beneficiaries taking the help of Swiss company, Masefield, to lift their quota of oil.

Saddam's oil for food programme had created so much excitement in Indian business circles — especially of the crony capitalist variety — that they lobbied very hard with those close to Saddam to get them the order to trade with Iraq. Just a fortnight before September 11, 2001, an Indian delegation had gone to Baghdad. There was a clamour among the Indian traders to lobby with the members of the Indian delegation to fetch them some delectable contracts. The delegation was led by former rajya sabha vice-chairperson, Najma Heptullah. Many of the names that figure in the enforcement directorate (ED) investigation such as Jamil Saidi and Andaleeb Saigal were actively involved in Iraq-related deals. It is not really surprising to hear of the flurry of phone calls that have been made between various players after the Volcker stink. ED investigations are revealing the kaleidoscope of corruption where sons of politicians belonging to different ideological hues are running moneymaking enterprises with the help of rogues and fixers. 

The clincher remains: did the Congress get any money from Saddam Hussein? Congress leader Sonia Gandhi has been very particular that the needle of suspicion does not swing towards her family. She has promised strict action if anyone is found guilty, but this has not really stopped the BJP and other opposition members of parliament from making allegations against her. According to highly-placed sources, there indeed was a Congress leader (was it Natwar Singh?) who is believed to have told either Hussein or Tariq Aziz that the Congress needed funding as it was in the opposition and being harassed by a rightwing pro-US party. What remains unclear is whether this leader kept the money to himself or did he pass it on to the party. Highly-placed Congress sources claim that the money never came into party coffers. Sonia Gandhi's ire is primarily directed at some of those who are smirching her name after devouring the kitty.

The curtain has not yet fallen on the Volcker scam, as the UPA-led government uncovers the identity of more than 2,500-odd companies that traded with Iraq. Many of them it is alleged could be benamis of some of the NDA leaders.