Summing up the motion for condemnation of the the alleged involvement ofsome Indian entities and individuals as non-contractual beneficiaries of theUnited Nations' Oil-for-Food-Programme in Iraq, as reported in the Report of theUnited Nations' Independent Inquiry Committee (Volcker Committee).
Source: Verbatim uncorrected proceedings of the Rajya Sabha
Mr. Chairman, Sir, we have had a day-long debate on the Motion which you werepleased enough to permit me to move before this House. And for and against theMotion, a very large number of hon. Members of this House had an opportunity toexpress their views. We also had the benefit of listening to some of the eminentspeakers from the Government. Both are very distinguished parliamentarians, verydistinguished lawyers, and, indeed, these are the people for whom I have greatregard.
Let me, at the end of this debate say, during the last one month, I startedby having a lurking suspicion that this Government was neither honest nor bonafide in its endeavour to unearth the truth. The political manner in whichcomments were being made, the cover up, through these inquiries by incompleteand erroneous procedure, which has been suggested and even justified today,certainly did lead this lurking suspicion to become a disappointment. I wouldhave expected an honourable and honest Government which was truly bona fidein the matters of trying to investigate the truth to really stand up and say:"There is a preliminary material which has come by way of the VolckerCommittee Report....This material indeed is very disturbing."
I expected, at least, the Members of the Congress Party to use the phrases,which their own President used only a few days ago. Today when we find that whenthey are in the Government, the element of concern that they should have withregard to the disclosures made in the Volcker Report is completely missing. Ifind my two very eminent friends, -- though they said, 'we are not trying torubbish the report' -- but there has been a conscious effort not to say that 'wewill treat this as a preliminary material with serious concern and then put theinvestigation on the right track to find the truth.'
But the entire effort has been, 'let us try and pick holes in the report andif possible rubbish the report. If I succeed in rubbishing the report, theallegation against the Government, that you are not being honest in the matterof investigation, it still will fall apart. My friend, Mr. Sibal said, 'well atestimony was given and on the basis of that testimony at best what has beenexpressed is an opinion of Mr. Volcker. It is an opinion which is not based onany material.' I think, it would have been more reasonable to say, what Mr.Chidambaram indeed did, that these findings could be on the basis of certainmaterial, a material which Mr. Virendra Dayal and Director of Enforcement havegone to Mr. Volcker and said 'please give it to us', but to say that this isnothing more than a private opinion is not correct.
What does the report itself says at page 534? 'Source of Evidence' - and I amquoting from that. It says, 'as discussed at length in the report on programmemanipulation, the Committee's findings as they relate to the imposition andcollection of illegal kickbacks, these are based on collections and analysis ofan extensive body of evidence. Much of the evidence comes from contemporaneousdocuments and data provided by various Iraqi contracting Ministries, includingfinancial ledgers, internal correspondence and data based on records. The otherevidence is in the form of bank records and deposits as well as informationprovided by suppliers that participated in the transactions, their agents andshipping companies." Now to say that this entire evidence is hearsayevidence which somebody went and orally deposed before that Committee ...
((Interruptions)...
SHRI P. CHIDAMBARAM: Nobody has said that. ...((Interruptions)...
Therefore It is merely an opinion ...(Interruptions)...Well, if you did notsay and that now you realise either you should not have said that or you havenot said that, then it is certainly much more than ...((Interruptions)...
SHRI P. CHIDAMBARAM: I want that very evidence now. ...((Interruptions)... We need to get those very documents. ...(Interruptions)...
To say that it is merely an opinion, Sir, what are the other arguments thoseare being raised in order to rubbish it. An article has been written somewherecriticising the Report. In a free media world, people may criticise, people maycomment on the authenticity of the Report, but this House in its discussion andthe Government in its attitude is certainly not going to be influenced by this.You are very concerned with the fact that no notice was given to the CongressParty or Mr. Natwar Singh.
Volcker has specified the procedure to the contracting parties to whomnotices were given. What is the stage at which we are today? We are not at astage where some chargesheet has been filed and trial is being conducted againstMr. Natwar Singh and the Congress Party. We are at a stage where in this countrynot even on the basis of the material and information available, a FirstInformation Report is being lodged. We are at a stage where we have to decideand the Government has to decide whether there is a reason to believe or tosuspect that a commission of an offence has taken place on the basis of thismaterial. And the Government says, 'I won't register an FIR.' Let me tell myfriend Mr. Chidambaram that the core issue in relation to the dispute whetheryou legally follow the correct course or not, I have no doubt about the eminenceand fairness of Justice Pathak. You do not require a Judge of the InternationalCourt of Justice at Hague...
You don't require a former Chief Justice to merely start investigating theaffairs of Hamdan company. You require a Committee, an agency or a body whichhas the legal jurisdiction to start investigating who were the recipients, if atall, of these illegal payments. Let me Sir, just remind my learned friends as towhat is the material with which Mr. Chidambaram tried to present, which isavailable on the basis of these documents.
You have a reference where there are contracting parties which have benefitedfrom the contract and you have a material where non-contracting parties arementioned on these coupons. You have the name of a company which has traded inoil which it was entitled to pick up. It has passed it on as a commercialtransaction to another company. So the oil has been picked up. You have evidenceand there is material in this report, we need not pronounce it, that the levy ofsurcharge was illegal. But you have material to say that on both the contractswhere a non-contracting party was the Congress Party or Mr. Natwar Singh,illegal surcharges have been levied.
You have further material in terms of even bank account details, that exactlythe same amount of illegal surcharge levied and paid has been paid by Masfield,as Mr. Chidambaram rightly says through the instrumentality of Masfield and Mr.Sehgal. You have now evidence which is appearing, and, I am sure, theEnforcement Directorate which is under his Department has further cross-checkedthe reports and there are some answers which I expected, at least, four of myfriends from the Congress Party spoke. Some of you owed an explanation to thecountry. How did this business delegation accompany your political delegation?How are these people meeting Oil Ministry officials? This is further evidenceavailable if your Government tries to honestly investigate. These areconfessions which these people have made in the world of television, ontelevision itself. Why have they repeatedly gone again to Baghdad?
The crux of the issue, as I mentioned was, nearly two-fold investigationswhich are required, that moneys passed on from Masfield to Sehgal and Hamdan forrepayment back to Jordan. This could not have happened without their being anunderlying transaction. It is nobody's case that I must jump to a presumptiontoday itself. This calls for an investigation and a valid investigation in law.It must only be such an investigation which has the legal capability ofunearthing those documents and reaching at the truth. Between Masfield andHamdan the two questions which need to be answered is: what happened, if at all,in terms of passing commercial benefits either to the two named non-contractingbeneficiaries or to some front companies on their behalf. Has this taken place?The second question, which would arise, is the evidence of these non-contractingbeneficiaries. Did they receive any acknowledgement or the coupons itself whichthey were further entitled to trade for the reasons of profit? These are the twokey areas. Now, you may speak in terms of the eminence of Justice Pathak. Youmay speak of the ability of the Enforcement Directorate. Let me now just dealwith both. Mr. Chidambaram says, 'why have we given the inquiry only to theEnforcement Directorate?' The Enforcement Directorate itself can issue a letterrogatory.
SHRI P. CHIDAMBARAM: It can approach a court if it feels.
I think, Mr. Chidambaram did mention that when we speak in terms of letterrogatories, the ghost of Bofors comes back. But then it comes back on varioussides. If you recollect, till December 1989, your Government was in power And,till 1989 December, your Government did not care to have an FIR registered. Youdid send some letters of request. But, every time you send the letter of requestthe Swiss Government came back with a reply, 'We have a treaty...' -- and thetreaty which was entered into prior to that -- '...and the treaty required thefollowing conditions. The treaty requires the principles of dual criminality.There must be an offence which is an offence in both the jurisdictions. Thetreaty requires a case under investigation and a proper letter rogatory.'
If Mr. Chidambaram's memory does not fail, in October, 1989, you wanted aletter of request to be sent precisely for currency and taxviolations...(Interruptions)...You wanted a letter of request to be sent inrelation to currency and tax violation laws! The Swiss Government precisely said'No.' And that is why in the morning I said that unless you go on the correctlegal course and ask the right questions, you are going to draw a blank asindeed you did till December, 1989.
SHRI KAPIL SIBAL: That is why finally you drew a blank on Bofors ...(Interruptions)...
We can discuss that separately...(Interruptions)...
SHRI KAPIL SIBAL: That is why you drew a blank.
I will deal with your approach separately ...(Interruptions)...The FEMA,which is the only case they are investigating, has no powers of letterrogatory in the Act itself. Mr. Chidambaram now wants us to accept thatunder FEMA a request will be sent to some other agency which will then move thecourt for letter rogatory. Sir, FEMA, as Mr. Sibal rightly said, speaksin terms of adjudications, penalties and does not speak about other penaloffences. The language of Section 166, besides the Indo-Swiss Treaty, requiresduel criminality. The FEMA does not fall under dual criminality. It requires,under Section 166, a case under investigation. Unless a case is underinvestigation i.e., FIR has been lodged, letter rogatory cannot be issuedunder Section 166A. Who will issue letter rogatory? The court on anapplication made by an investigating officer...(Interruptions)...You are doingexactly the opposite. Sir, you cannot camouflage this cover upexercise...(Interruptions)...
SHRI KAPIL SIBAL: Even now you give us a piece of evidence. We will do it...(Interruptions)...
Therefore, the FEMA investigating officer, the moment, he goes to a specialjudge, no Indian court, without a case under investigation, without an FIR orwithout power under the Act, is going to allow him to issue letter rogatory.Under FEMA there is no power. And, I think, the proof of the pudding will be ineating where a few months from now if they try and issue letter rogatory underFEMA using Section 166 and some other investigating officer, it will be aprocedure completely unknown to law. It will be a procedure completely unknownto law. And, therefore, in the absence of that power, you want us now to believethat Justice Pathak has no power. But, he will request any investigating agencywhich is not investigating the case, to go to special judge. You reasonablyexpect the special judge...
SHRI P. CHIDAMBARAM: It is very unfair to Justice Pathak. Please read the Terms of Reference. Please read the last Term of Reference. Justice Pathak can make any recommendation or suggestion to the Government of India following his findings in the earlier Terms of Reference. I think, you are unnecessarily and unwittingly raising this and it is unfair to the Chief Justice of India.
I don't think the personality of a former Chief Justice of India is thequestion in issue. The question in issue is: Is Justice Pathak, in his capacityas a Section 11 Committee or even as a Section 3 Commission entitle to issue letterrogatory? The answer is big 'No.'...(Interruptions)...
SHRI P. CHIDAMBARAM: Justice Pathak can recommend to the Government that in view of his findings the Government should file an FIR and apply for letter rogatory...(Interruptions)...
SHRI N. JOTHI: If he cannot do it now, when will he do it? After five years! (Interruptions)
I, now, deal with Mr. Chidambaram's main argument. Chief Justice Pathak willask some other investigating officer, not investigating the case, no FIRregistered, no dual criminality principle, to ask Switzerland to give usinformation. The answer is going to be a clear 'no'. The answer is going to be aclear 'no'! This is exactly what the Government between 1987 and December 1989had tried; and, this is exactly what this Government is trying to do now. Mr.Sibal, in the morning, wanted to put a question. I ask which are the cases thatare made out. If a political party, prima facie, on the basis of thismaterial is alleged to be an entity, receiving money, ....(Interruptions)
Sir, this is precisely what a Government, which lacks bona fide...(Interruptions) I, as a Government,...(Interruptions) Mr. Sibal,...(Interruptions)Mr. Sibal's response is, I, as a Government, will make not make an honest effortto bring the evidence; you, as an Opposition, bring the evidence.(Interruptions) But that is the tactic what you....(Interruptions) This isexactly what you have been doing. (Interruptions) I am sorry, this is exactlywhat the Government has been saying. (Interruptions) In the morning, you said,"Mr. Jaitley, ...(Interruptions)
SHRI KAPIL SIBAL: Mr. Jaitley, it is not fair. You made an allegation saying that there is enough evidence. I ask you where the evidence is. (Interruptions)
SHRI N. JOTHI: Here it is. What more you want? (Interruptions)
SHRI P. CHIDAMBARAM: Sir, either the evidence is there, or, we have to gather evidence. According to us, the evidence is not there in the Report. We have to gather the evidence. (Interruptions) Mr. Jaitley says that evidence is there. (Interruptions) We are gathering the evidence. (Interruptions) If evidence is there, please tell us which is the evidence. (Interruptions)
Sir, Mr. Chidambaram will realise that, in this game, none of us was bornyesterday. So, we know what the truth is. The truth really would be that thereis one set of material on which Mr. Volcker has made his recommendations. Thatset of material, on the basis of which Volcker makes his recommendations, may bepossible through diplomatic channel, through Mr. Virendra Dayal or otherwise, torequest the United Nations to give us the documents. Perhaps, some of thosedocuments we have brought. That is one set of documents. But that document wouldonly sustain what is mentioned in the Report. The next step, which you don'twant to honestly investigate, is when Masfield or Vitral did the oil transaction-- you were right in your analysis when you said some part of the money wentback to Jordan to go back to Iraq -- what happened to the balance money? This iswhere the core of the conflict lies.
In order to investigate what happened to the balance money, you must unveilthe secrecy of the Swiss banking laws. To unveil the secrecy of Swiss bankinglaws, you must have a case under investigation; you must have a letter rogatory.Their argument is, unless they get the material, they will not lodge an FIR,they will not send a letter rogatory. The entire bone of contention, now, is....(Interruptions) You will get the Volcker documents, I have no doubt. But thesecond limb of the argument is, where did the money go from Masfield? Who allshared the money? What did the non-contracting beneficiaries get? Now, in orderto investigate Volcker is not going to help you. To unveil the Swiss bankingsecrecy laws, which is really required, you must go through the legally correctmethodology. You can't grope in the dark. You can't follow legally flawedmethodology, and, then, say you have not been able to get answer. The answer forwhich is that you must register an FIR, you must send a letter rogatory. And,your argument is that you will register an FIR and send a letter rogatory, tillyou first get an evidence. You will not get any evidence unless you go by thecorrect methodology. (Interruptions) Sir, I said in the opening that what is thetactic that the Government is following.
Their first tactic is, rubbish the report. And I am sorry to say that my twodistinguished friends and senior Ministers in this Government, instead of beingresponsible spokesman of a responsible Government to say "this ispreliminary material, we will honestly try to investigate the rest," theprinciple exercise they have done today is, let me rubbish whatever evidence ison record. It is a case, we least expected the Government's spokesmen to act asdefence lawyers for the non-contracting beneficiaries.
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