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Piercing the veil on Volcker Committee and Iraq

Prakash Karat

The inquiries announced by the Government into the charges in the Volcker Committee report represent a correct step. But the exercise has brought Iraq and the brutal regime of U.N. sanctions back into the limelight.

THE FINAL report of the "Independent Inquiry Committee," headed by Paul Volcker, on the United Nations' Oil-For-Food Programme (OFFP) in Iraq has led to a major political controversy in India. In one of its annexures, the report has listed External Affairs Minister K. Natwar Singh and the Congress Party as "non-contractual beneficiaries" of Iraqi oil sales in 2001 under the OFFP. A host of Indian companies have also figured as paying surcharges for the purchase of Iraqi oil or paying other charges for supplying goods under the U.N. Programme.

The Volcker Committee report has brought Iraq and the U.N. sanctions back into the limelight. The sanctions imposed on Iraq by the United Nations Security Council lasted for 12 years — from 1990, that is, before the first attack on Iraq by the United States-led coalition, up to the U.S.-British invasion of Iraq in March 2003. These were the most brutal sanctions imposed on a sovereign country. Iraq was prohibited from selling its oil or trading in goods or purchasing medicines and other essential commodities. `No-fly' zones were enforced and Iraq was subjected to continuous aerial bombing by the U.S. and British air forces.

The horrific effects of the sanctions on the Iraqi people are well documented. More than 1.5 million of them died owing to the effects of the sanctions. The worst affected were children. According to a UNICEF study, 500,000 children died needlessly between 1991 and 1998. According to the Ramsay Clarke report to the U.N. Security Council, the annual number of deaths of children under the age of five grew more than ten-fold from 1989 to 1999. From 1990 to November 1999, 502,292 children under age five died from diseases such as diaorrhea, gastroenteritis, respiratory infections, and malnutrition.

Sanctions were imposed not to punish Iraq for its occupation of Kuwait. On May 20, 1991, President George Bush (Sr.) declared: "At this juncture my view is that we do not want to lift the sanctions as long as Saddam Hussein is in power." The aim was clear. Iraq had to undergo a regime change and sanctions were a weapon for this.

While the United States and Britain insisted on the maintenance of strict sanctions that prohibited even the import of medicines, the sufferings of the Iraqi people caused worldwide outrage. It was due to the pressure of world opinion that the U.N. Security Council adopted a resolution in April 1995 allowing the sale of oil to finance the import of humanitarian goods. The OFFP was implemented only from December 1996. The U.N. Office for Iraq would decide how much oil would be sold every six months, and two-thirds of that amount was to be used for Iraq's humanitarian needs. The OFFP fund was the money of the Iraqi people; there were no foreign funds whatsoever. The money from the sale of oil did not go to the Iraqi Government but to a U.N.-designated account. Claims for reparations for the 1991 Gulf war were made by the U.S. and its allies. Out of the total Iraqi oil sales of $65 billion during the relevant period, only $46 billion went for the OFFP.

The OFFP provided a tenuous lifeline for the Iraqi people. From 1998, the terms were relaxed further to allow more sale of oil. In December 1999, the ceiling on export of oil was removed by the Security Council. But every contract to buy humanitarian goods was scrutinised by a committee that had Security Council members and each single contract was approved by representatives of the U.S. and Britain.

The OFFP was a paltry step to alleviate the sufferings of the Iraqi people but even this came under attack from U.S. right-wing circles. They targeted the U.N. demanding the programme be stopped. Allegations of corruption and malpractice were levelled and it was claimed that Saddam Hussein had made anything from $10 billion to $20 billion out of this programme. While constantly sniping at the OFFP, the U.S. was complicit in allowing Jordan, its key ally, to benefit most from the oil trade.

Saddam Hussein's government tried various means to beat the sanctions and circumvent the humiliating terms and conditions. The Iraqi Government approached a number of companies and organisations in various countries that were well disposed to Iraq and prepared to cooperate with it. Unsurprisingly, most of the oil contracts as well as orders for goods needed by Iraq went to countries that had good relations with it.

The Iraqi Government tried to generate revenue by levying surcharges on the oil contracts and inland transport charges and after sale service charges on the goods supplied to it. For those who opposed the sanctions, Iraq had every right to do so. For those who supported this assault on Iraqi sovereignty and the Iraqi people, these were "kickbacks." The Volcker Committee takes the latter view.

Only craven apologists for Washington justify the economic warfare waged against the Iraqi state and people. After the invasion and occupation of Iraq in 2003, a crescendo of attacks on the U.N. was orchestrated by American neo-cons. Kofi Annan and his predecessor, Boutros Boutros-Ghali, were brought within the ambit of the charges. It was in response to these attacks that the U.N. Secretary General appointed a three-member committee to look into the charges of corruption and malpractice in the OFFP.

Those who mounted the attack on the U.N. and the OFFP are totally silent about the loot of Iraq and the profiteering by U.S. corporations. It is under U.S. occupation that the Security Council ended sanctions against Iraq and proposed to set up the Development Fund for Iraq (DFI). In 2003, the OFFP was wound up and $9.978 billion was transferred to the DFI, which was to be administered by the "Coalition Provisional Authority" set up by the occupation forces. The U.S. got its hands on this development fund, which grew to $20 billion in 2004. American companies have made a killing through contracts for the reconstruction programme. This is a scandal of huge proportions that the U.N. will not have the courage to enquire into.

The U.S. and the British governments have been keen to tarnish the image of all those who supported Iraq and opposed the sanctions and the war.

The Volcker Committee report cannot be taken at face value. There have been official Russian and South African refutations of the authenticity of some of its documents or findings. A whole host of Indian companies that did business with Iraq through the U.N. office of the Iraq programme cannot be legally charged with any wrongdoing since the government of a sovereign country asked them to pay levies or charges on the goods they sold. Can all these payments be considered "kickbacks"? There are some exceptions in the oil contracts that need investigation.

The mention of Natwar Singh and the Congress Party in the annexure of the report belongs to a different category. Mr. Singh was a leader of the main opposition party at the time. The Congress Party and Mr. Singh as chairman of the foreign affairs cell of the AICC maintained relations with Iraq and the Baathist party during the entire period when sanctions were imposed and the attacks on Iraq continued. Mr. Singh has rightly defended his views opposing the sanctions and the war on Iraq. The Congress Party need not be apologetic or defensive about its ties with Iraq and other third world countries and organisations intent on defending their national sovereignty. Much of the attack directed at the United Progressive Alliance Government and the Congress Party by the Bharatiya Janata Party and the right-wing media stems from their ideological affinity with the U.S. and its designs on West Asia.

Unfortunately the Manmohan Singh Government — with its new-found dependence on, and willingness to collaborate with, the U.S. — does not seem keen to remember this past. The Government may now find uncomfortable Mr. Natwar Singh's assertion that the U.S. is intent on targeting individuals and organisations that do not share its hegemonic views.

The CPI (M) announced, following the publication of the final report of the Volcker Committee, that the allegations against the Foreign Minister and the Congress Party and a host of Indian companies should be investigated by the Government so that the facts and evidence could be collected. Only then could proper conclusions be drawn. It has become clear that despite Volcker's claim that all individuals and parties were given notice to explain their association, none of the Indian political entities and individuals was issued such notice.

The link between Hamdan Export, Masefield AG, and their alleged connection with the "non-contractual beneficiaries" can be uncovered. This issue must be clarified: was it a case of an illegal deal through political patronage or a business transaction like the other contracts entered into by Indian business enterprises?

The Government has announced two types of inquiry into the charges in the Volcker Committee report. This is a correct step. Mr. Natwar Singh has stepped down during the pendancy of the inquiries and this should help facilitate impartial fact-finding. But it should be noted that he is being targeted for leading a Congress Party delegation to Iraq in 2002 and for opposing the sanctions and the invasion of Iraq. For the Congress and Mr. Singh, an impartial inquiry would help counter the charges that they were "beneficiaries" in the oil deal.

In the recent period, the UPA Government has taken a series of steps that violate the independent foreign policy it promised to pursue. The Indo-U.S. defence framework agreement, the joint statement of July 18, and the vote in the IAEA on the Iran nuclear issue are such instances. The CPI (M) is concerned about how foreign policy will be conducted by the Government. There is in India a strong pro-U.S. lobby that hopes the exit of Natwar Singh will help consolidate the pro-U.S. direction in foreign policy. The CPI (M) and the Left are determined to see that the Government adheres to an independent foreign policy. In the coming days, the CPI (M) will give the highest priority to this issue.

[The author is general secretary of the Communist Party of India (Marxist).]

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