People like Agarwal also feel that Volcker hasn't done his job well. "Every company that supplied goods to Iraq during that period has been named in the report," he said. Angelique's manager agreed that "our name is there only because we were doing business with Iraq." The thinking is that the UN knew about these payments all along and didn't stop them. While Saddam was still in power, global NGOs had alleged that Iraq was misusing the oil-for-food programme. An article in Foreign Affairs (July/August 2004) stated: "Of course, no sanctions can be 100 per cent effective.... Investigations by the US General Accounting Office (GAO) and The Wall Street Journal put Iraq's illicit earnings at $1.5-2.5 billion a year. An updated GAO report estimated that illegal Iraqi revenues from 1997 to 2002 amounted to $10.1 billion, about 15 per cent of total oil-for-food revenues during that period."
But the best defence that many exporters have is that they were only tier-II suppliers to Iraq. For instance, Eastern Medikit claims that it supplied surgical equipment to a distributor based in Jordan. "We have several distributors across the globe who ask us to supply goods. Now, if the Jordanian distributor paid any fees or surcharge, we wouldn't know anything about it," said one of its senior managers. It's logical to assume that small- and mid-size Indian exporters may have been involved in several such tripartite trades while Saddam was still in power. It must be added that much of the crude smuggling from Iraq during the time the sanctions were in place was through Jordan.
A number of exporters that Outlook spoke to admitted that much of the trade with Iraq—both during the pre- and post-US invasion days—is conducted via third countries. "If we wish to import something from Iraq, we buy it in Dubai. The products find their way to Dubai, the local suppliers have proper papers to show that the country of origin wasn't Iraq, and we buy it from the Dubai traders. Similarly, if we have to export things to Iraq, we sell it to companies based in Syria and Turkey which in turn push them into Iraq. In both these transactions, the Indian entities are legally protected as they have proper papers and can take a stand that they didn't know the final destination or origin of the goods," explained one.
Therefore, the exporters' community is sure that they won't be caught. Even the income tax investigations which may be launched by the finance ministry against the 130 Indian firms named in the Volcker report is unlikely to find too much. "We have proper papers. Payments, if made, were through the banking channels," said an exporter named in the report. But the most compelling reaction came from Raj Kumar Jain of Priyanka Overseas. "I am willing to show all the relevant documents to anyone who wants to see them," he told Outlook, and invited us to look at them any time.
Whatever may happen with the government investigations, it's clear that the 130 Indian companies knew what was happening in Iraq during Saddam's rule. They knew that surcharges and fees were being collected behind the UN's back and were being pocketed by Saddam and his cronies to finance their war machine and their lifestyles. Although India Inc may have a legal defence, it had definitely committed a moral wrong.
