V-Missile Mishits

How The Others Reacted

2,400 companies

66 nations

• USA: US Congress launches probe; courts looking into allegations
• Switzerland: Launches criminal inquiry against four people
• UK: Serious Fraud Office to probe allegations
• France: Wants more clarity as judges begin probe
• Italy: No reaction
• Jordan: Will probe "illegal payments"
• Russia: Studying the report, cites forgery
• Turkey: Silent
• Pakistan: No reaction
• Australia: Rejects calls for "Royal Commission". Will set up an independent inquiry commission.
• China: No reaction
• New Zealand: Plans to investigate claims

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he political frenzy as a result of the Volcker committee findings on the UN oil-for-food programme seems limited largely to India, although more than 2,400 companies from 66 nations have been alleged to have paid "kickbacks" to Saddam Hussein's regime. Politicians from Russia, France, Britain, Malaysia, Italy, Indonesia and South Africa are among those named in the report, yet the only politician to have lost his job seems to be K. Natwar Singh. The list of non-contractual beneficiaries, according to the Volcker findings, included Megawati Sukarnoputri, speaker of the Indonesian parliament, the Russian Orthodox Church, the Palestinian Liberation Organisation, President Putin's Russia Peace and Unity Party, the Russian Communist Party, a deputy speaker of the Russian Duma, the government of Pakistan, Myanmar's ministry of forestry, an MP from Italy, and even Tokyo Sexwale of the African National Congress who had been a prisonmate of Nelson Mandela in Robben Island.

In Volcker's findings, Russia tops the list of countries that illegally profited from oil-for-food contracts, followed closely by France, then China. France and China had consistently called for easing international sanctions on Iraq. But the report received scant attention there. Among the Russian names mentioned in the Volcker report were Alexander Voloshin, the former Kremlin administration chief, Communist leader Guennady Zyuganov and Russian ultra-nationalist Vladimir Zhirinovsky.

Russian foreign minister Sergey Lavrov declared that Russia was studying the report because "in a number of earlier cases the commission gave us some rather questionable or downright fake documents. The Russian side has repeatedly queried the commission about the sources from which such documents were obtained, but has never received any answer. If the current examination of the report again identifies fakes, we will request explanations from the commission regarding ways in which these so-called documents fell into their hands". Asked about Russia's reaction, Volcker conceded "one fabricated document" but added: "But I'm sure it was not all fabricated."

In France, former interior minister Charles Pasqua and former UN ambassador Jean Bernard Merimee were implicated by the report. The French foreign ministry declared France will study the report and "wants full light to be shed on the embezzlement that took place". Meanwhile, French judges are investigating 10 French officials and business leaders on suspicion they received oil allocations as kickbacks.

In Australia, Prime Minister John Howard has denied the government approved payments totalling $300 million from Australia's Wheat Board. Rejecting a call for a Royal Commission, he announced his intention to set up an independent inquiry.

Sweden's Volvo AB acknowledged making payments through an agent to Iraqi authorities but said it did not consider that bribery. "We did business with an authority in Iraq. The same authority tells our agent that you have to pay a fee to do any business at all," chief executive Leif Johansson was quoted as telling a Swedish news agency. "When authorities said that, we drew the conclusion that this was the way to do business in Iraq," he said.

Switzerland launched a criminal investigation focusing on four people. British lawmaker George Galloway, who founded a charity aimed at fighting the UN sanctions, told agencies "there is a witchhunt going on" but Britain's Serious Fraud Office is to examine the allegations. New Zealand also announced it would investigate claims that bribes were paid to Iraq and that the government was not rushing to any judgement. The Jordanian government has said it was probing companies and individuals that may have made illegal payments to Iraq.

n the US, FBI agents last month arrested Oscar S. Wyatt Jr, "the most hated oilman in Texas", on charges that he paid millions of dollars in kickbacks to the Saddam regime. He was later released on a $2.5 million secured bond. Wyatt, the former chairman of Coastal Corp, turned the spotlight on his ties with Saddam when in 1990 he famously flew to Baghdad to ask him to release American oil workers held hostage as "human shields". Then, under the oil-for-food programme, Wyatt and Coastal secured the first tanker shipment to leave the country.

Several US firms are among those that allegedly paid kickbacks. Barred from doing business with Iraq, the firms established subsidiaries in Europe to broker deals. Other US firms named by Volcker include America's two largest oil companies, Exxon Mobil and Chevron Texaco. The list also includes BayOil. The firm, using an Italian company, reportedly purchased up to 45 million barrels of oil from 2000 through 2002 and paid more than $6 million in under-the-table fees to the Iraqi regime in violation of UN sanctions and US law. The Volcker report said the Italian affiliate would bill BayOil for expenses ranging from office equipment to gifts for Iraqi officials, including a jet ski for Saddam Hussein's son Uday. Virginia-based Midway Trading also pleaded guilty in New York State Court to grand larceny in the first degree in connection with the programme.

The US Congress has launched its own investigation, led by Minnesota Republican Senator Norm Coleman, chairman of a senate permanent subcommittee on investigations. State department spokesman Sean McCormack, while declining to characterise the activities of persons and companies named in the Volcker committee's report as "illicit", said the US has laws in place "that govern those things and it is up to the law enforcement authorities to make the judgements about whether or not any laws were broken".

In the case of India as well as other countries, it remains an open question if the documents available with the Volcker committee are sufficient to establish facts up to the point where criminal charges could be brought. M.H. Ansari, a former Indian permanent representative to the UN, says: "Taking the totality of the American record on Iraq in the last two years, would it be prudent to take this report at face value? The American record is a litany of falsehoods, misstatements and outright lies, and each one of them is proved by American evidence itself today. If that is the credibility of the source, would you accept it without scrutiny?"

On the question of surcharge imposed by the Iraqi regime, Ansari counters, "Even the RBI permitted Indian companies to incur a certain percentage—about three per cent or so—to create goodwill. Whoever got a contract in the Gulf without softening the ground? Saddam was constrained by international pressure. Iraq was an oil economy. It was the sole source of its GNP."

M.K. Bhadrakumar, another retired diplomat familiar with the region, characterises the Volcker committee's exercise as a "polemical investigation". He dismisses the report as "an absolute third-rate document. No one is asking as to how these documents—even if they exist—came into Volcker's hands. They were either handed directly by his American staff or by the provisional Iraqi authority at a time when Iraq was under American occupation. Where were these documents found? Who wrote them out and under what circumstances? No one is in a position to confirm. The most regrettable fact is it is not worth appointing a former chief justice to investigate this. The government is attaching too much importance to it." Bhadrakumar asserts that "most of the sanctions-busting" was done by two of America's close allies—Turkey and Jordan. "Under American eyes, everyday thousands of trucks with oil crossed the border. These are the real skeletons in the American cupboard."

Indeed, unclassified state department documents sent to congressional committees reveal that the US knew of and condoned embargo-breaking oil sales to Jordan and Turkey. It said it was in the interest of national security because of America's dependence on these two neighbours of Iraq.