'Have You Flipped Your Principles?'

Moving the motion for condemnation of the the alleged involvement of some Indianentities and individuals as non-contractual beneficiaries of the United Nations'Oil-for-Food-Programme in Iraq, as reported in the Report of the United Nations'Independent Inquiry Committee (Volcker Committee).

Source: Verbatim uncorrected proceedings of the Rajya Sabha

Mr. Chairman, Sir, let me first express mygratitude to you for permitting me to move this Motion under rule 167. TheMotion I move reads:

That this House strongly condemns the alleged involvement of some Indianentities and individuals as non-contractual beneficiaries of the United Nations'Oil-for-Food-Programme in Iraq, as reported in the Report of the United Nations'Independent Inquiry Committee (Volcker Committee).

Sir, in the past few weeks, we have had from the Government at the highestlevel and from the political parties, whose alliance and coalition is in power,certain responses to what has been stated in the Independent Inquiry Committee'sReport. Let us remember, and this needs to be underlined, that this Report is noordinary document. This Report has not only domestic significance, as far asIndia is concerned, this Report is a document of high international credibility.And amongst others, this Report has mentioned, at least, two prominent Indianentities along with a third one, then, there are several other companies, andwhat has disturbed the country the most is a reference to a political partywhich has been in power in India for the longest duration of time as also a veryhon. Member of this House, who at the time when this Report was prepared wasIndia's Foreign Minister and our country's principal spokesman on Foreign Policyissues.

Sir, let me remind this House that when this UPA Government was voted topower, it had promised a corruption-free administration. The Prime Minister, aswe take him for his words, had repeatedly said that there would be azero-tolerance level, as far as corruption is concerned. Unfortunately, thisGovernment opened its innings, and its very first stroke was the induction oftainted in the Union Cabinet. We were all enthused when our present PrimeMinister and India's Finance Minister years ago had shed apart alltechnicalities and said in his own party's conference that Caesar's wife must beabove suspicion. So, those who sit in high places must not be those against whomaccusing fingers can be pointed out. While we were very enthused with thestatement of his given in the mid-nineties at the Congress Party's Conference,we were certainly disappointed, as the entire nation was, when he somersaultedhis stand and said, 'merely because you have a serious case against you is noground to presume anything against you. There is a presumption of innocence tillyou are proved guilty'.

Sir, in the last eighteen months of thisGovernment, you not only had tainted Ministers occupying high offices, you hadabsconding Ministers, you had jailed Ministers... 

(Interruptions)

Sir, I repeat that in the last eighteen months, you had aGovernment of tainted Ministers with serious criminal cases against theminducted into the Union Cabinet; you had Ministers who are absconding; you hadMinisters who had to go to jail. And now you have the case of a Minister who isIndia's principal spokesman on its foreign policy, indicted before the wholeworld as having been a recipient of commercial benefits allegedly inconsideration for a political stand he was taking prior to becoming a Ministerin that office.

Sir, I am not referring to subversion of various institutions which has takenplace, which probably in this Session we will get a separate opportunity to dothat, but the common thread which is a serious matter of concern on variousissues which has been arising, which is really the core of this debate, is thatin consideration of political stances we take in domestic polity or stances thatwe take as far as international issues are concerned, what is the influence offoreign entities on India's political entities. Unfortunately, this is not thefirst occasion that a charge has been made. This charge has been made almostcontemporaneously in publications which have recently come out.

Even earlier, and let me, Sir, through you, remind this House that when Mr.Mohnian wrote his book with regard to the influence of CIA on Indian politics,shedding apart all technicalities, this House took up the issue and discussedseriously what was contained in that book, a dangerous place. When Mr. SeymorHarsh made allegations against one of India's principal politicians and a formerPrime Minister, an allegation which everybody disbelieved...(Interruptions)

[Interruptions from the Congress members about NDA's tainted ministers

SHRI VAYALAR RAVI: Sir, I am on a point of order. Under Rule 167 Sir, as yourightly said, it is a specific public matter. I don't want to read out all that.But here the hon. Member is referring to a discussion which took place in 1976.I am prepared to discuss on that. This book will reveal everything. I amprepared to discuss. But my point is this: what is the relevance of a 1976discussion on this point? Sir, this is only on the Volcker Committee's report.Let the hon. Member confine to that. It will go against Rule 167. That is thepoint I am making. (Interruptions)

SHRI ARUN JAITLEY: My friends in the Treasury Benches need not get so excitedabout facts which I have still not referred to.

SHRI JANARDHANA POOJARY: You mentioned about the former Prime Minster.]

Sir, my learned friends need not assume that any cap fitsthem. So I have still not referred to the facts in detail. I have, yesterday,given to the hon. Chairman a notice with regard to a fact that I would bereferring to one of the publications. When I come to that they will be free totake their objection, I will respond to it. All that I am saying is that thisHouse under Rule 167 is discussing substantially one definite issue and thatsubstantially one definite issue is the Volcker Committee Report where Indianpolitical entities are alleged to have received economic benefits on account ofthe alleged stand which they took.

The common thread to all these publicationswhich have come, and this is not the first time that this House is discussingit, I have the proceedings that this House on 10th May 1979 discussed through asubstantive motion disclosures made by Mr. Daniel Patrick Moynihan, former USAmbassador to India regarding alleged payment of US money for Indian electionpurposes in India. The other House on 26th August, 1983 on a motion raised bythe Congress Party discussed the other publication "The Price ofPower" by Seymone Hersh. Therefore, this is not the first time in India'sParliamentary history that publications which made a disclosure with regard topayments made to influence India's politics have been discussed in both Housesof Parliament. They have been discussed in both the Houses of Parliament. 

When Icome to my substantive request to you with regard to the Mitrokhin Archives, Iwill deal with this issue. But all that I am saying at this moment now is, thatyou have the disclosures made with regard to CIA funding of India's politiciansfunding in Mr. Moynihan's book. You have now in the Mitrokhin Archives seriousdisclosures which are made. You have had allegations with regard to funding ofvarious terrorist and insurgent organisations...

[SHRI NILOTPAL BASU: Sir, I am on a point of order. When we decided in the Business Advisory Committee meeting about this subjectand when the question of Mitrokhin Archives came up, we had shown authenticdocuments to say that Mitrokhin Archives is a figment of imagination of agentleman and the reproduction, as has been established in the publication ofthe book itself, is not authenticated. So, to refer Mitrokhin Archives assomething authentic publication in itself -- today it is under the jurisdictionof Indian courts where certain facts by certain individuals have been challenged-- is not correct. Therefore, a reference to Mitrokhin Archives, asauthenticated document, on which the House can deliberate, is, I think, againstthe principles on which rules of business of this House have been constructed.]

Sir, when I come to the Mitrokhin Archives, I will certainly,place what my contention before you has been. And, I have submitted that inwriting also. But, for the moment, I am merely making a reference with theobject that disclosures are now coming and the latest one being in a Reportprepared with the UN really to investigate its own functioning and management ofthe Oil-for-Food Programme. And, this is a disclosure which cannot be takenlightly in this country. 

When we have to investigate the truth of thisdisclosure and take the follow up action, the entire country is concerned aboutthe fact that we ask the right questions by proceeding in the right manner. Itis our regret that this Government has deliberately chosen to proceed in thewrong manner so that it eventually draws blank as an answer and eventually comesout with a response that we found nothing to substantiate what Mr. Volcker hassaid. What is it exactly that Mr. Volker has said about India? 

You had asituation where sanctions were imposed against Iraq. But, obviously, the Iraqipeople had to survive. I am not, for a moment, in this debate, going into thedesirability of the sanctions or otherwise. But, it was a historical fact thatthey were imposed. Therefore, you had the Oil-for-Food Programme where Iraq isable to trade its oil on the UN pre-fixed price and in return what ishumanitarianly required for Iraq in terms of food, medicines and other things itis able to purchase. The crux of the allegation is that there has been amisdemeanour in the management of the Oil-for-Food Programme. And, thismismanagement, amongst other facts, included the then Iraq regime dishing outfavours to individuals and political entities which have been named in theReport.  

The methodology was very simple. Oil coupons were issued in favourof certain beneficiaries. The Iraqi oil had a premium in the global market. And,therefore, allotment of a coupon to purchase a premium product had an element ofprofit in-built into it. Profit was therefore being distributed to thebeneficiaries. It has been now stated, and there is substantial evidence to backit up, that most of the beneficiaries who received the coupons, received itdepending upon the degree of their support for the Iraqi cause and the degree oftheir opposition to the sanctions. Therefore, the crux of the allegation is thatyou were the beneficiaries named in the oil coupons and the beneficiaries whoreceived coupons, depending on the political and the diplomatic stand that youtook on the then issues which were confronting Iraq and which were of utmostconcern to Iraq, its Government and its people. 

Now, we suddenly find, when thedisclosures are made about Indian political entities amongst others who havebeen named in this, that these coupons were virtually tradable in the globalmarket. Somebody had to go and pick up oil. You lift the oil and any commercialentity, which is involved in the oil trading business, lifted oil against suchcoupons. Whatever was the profit, it had to be shared between various people.The commercial entity, which would trade in oil, would certainly receive a partof the oil profit. It would have to share it with the beneficiaries who were thecoupon-holders. And, through certain banking processes, the third shareholdersin this profit had to be the persons by virtue of payment into certain bankingsystems in Jordan or elsewhere where the then Iraq administration would get thebenefits back. So, the coupon-holders were the beneficiaries. The oil tradingcompany which was used for lifting the oil was the beneficiary.

And, then, a third part of the profit has gone back to Iraq via Jordan bydepositing it in the accounts itself. Now, what do the Volcker documentsindicate? I am only going to refer to three important pages with which we areconcerned in this debate. And my question, after referring to this is: Is thisnot a matter which makes out a very, very strong prima facie case against peoplewho are named and, therefore, a correct and a proper investigation in law mustbe carried out? And, I am very sure, -- I have also gone through the hon.Finance Minister's statement in the Lok Sabha yesterday, -- as to what kind ofinquiry and investigation the Government has embarked upon. 

Table II deals with oil sales summary of contracting companies. So, which arethe companies that have traded in this oil? Table III deals with thenon-contractual beneficiaries, and Table V deals with the surchargepayments. 

Let us first deal with Table III, which is a summary of oil sales bynon-contractual beneficiaries. A non-contractual beneficiary is a person who wasnot a party to the contract. He was not in the business of buying or selling oilbut, certainly, he was involved in some greasy transactions. Why should a personwho is neither buying oil nor selling oil; who merely takes a political ordiplomatic stand become a non-contractual beneficiary in an oil transaction, andwho are the entities which are named? I am presently concentrating on two pages.At page 25, of Table III, it shows: Beneficiary: India, Congress Party, Country:India. The Party which has lifted the oil against the Congress Party's coupon isMasefield A.G., the quantum of oil is given, the phase in which this oil waslifted is given, the mission country which lifted the oil is given asSwitzerland. And for my present purpose it is enough, Sir, the number of thecontract of Congress Party is also given, M/10/57. Let us briefly remember it ascontract number 57, that is, the Congress Party contract. 

The second contract with which I am concerned is at page 50. Beneficiary: Mr.K. Natwar Singh, Country: India, Lifting Agency: Masefield A.G., Phase No. 9,Mission country: Switzerland. And, then, the contract numbers are given:M/9/120, and the second one which is more important is, M/9/54. Let us rememberthis as contract number 54. So, there is a contract number 57 for Congress Partyand a contract number 54 for Mr. K. Natwar Singh. Notes of the public sector oilcompany SOMO allocation records name the beneficiary and give his description asmember of the Indian Congress Party. This is the first disclosure that againstcontract number 57 it is the Congress Party, against contract number 54, it isMr. K. Natwar Singh who are the beneficiaries. 

Now, what does Table II show? Table II at page 29 shows contracting party whohas lifted oil against these contracts. Contracting company Masefield, MissionCountry: Switzerland. Which are the two contracts against which the Swiss OilTrading Company has lifted oil? It is Contract number M/9/54 and Contract numberM/10/57. 

So, the Masfield is the company which lifts the oil against the CongressParty's contract, where allegedly the Congress Party is named, rightly orwrongly. Somebody else may have misused the name, that's what their leader says.That could be a possibility, which requires investigation. And, contract No. 57is the other contract where the Masfield has lifted the oil. 

Now, there is asecond important disclosure, Sir, that this document makes; and, that reallyclinches the entire issue. One need not be a criminal law investigator or acriminal lawyer of Mr. Jethmalani's eminence. Against these two contracts, Nos.54 and 57, the Masfield decided to levy an illegal surcharge. That is thequantum of illegal surcharge which has to be passed back to Iraq as a kickback. Now, what is the quantum of surcharge which gives the entire game away,which the Masfield charged? For contract No. 54, Mr. Natwar Singh's contract, itwas 4,98,973 dollars. That's an illegal surcharge. Right to the nearest dollar,I repeat, 4,98,973 dollars. For the Congress Party's contract No. 57, theMasfield made an illegal surcharge of 2,50,224 dollars. So, the exact surchargethat the Masfield charged against both the contracts is mentioned in thisdocument. This has to be paid back. Obvious. The Masfield says, "I have notdealt with Iraq, the beneficiary of the coupons, as traded in coupons, and givenit to me, I give the surcharge back to you or your nominee I give the surchargeback and pay it back to Iraq." 

Now, what is the third document? It is TableV. The third document, which is Table V, at page 82, deals with the two oiltransactions of the Masfield. Now, what are the oil transactions of the Masfield?The oil transactions of the Masfield are that the Masfield lifted the oil. And,against those two, what is the important disclosure made? Let us first deal withcontract No. 54, that is, Mr. Natwar Singh's contract. Now, against Mr. NatwarSingh's contract, who deposits the amount back for the Iraqi benefit in the Bankof Jordan?  The names of two persons, who deposit this amount, are Mr.Andaleeb Sehegal and Mr. Hamdan Now, so far, they are not involved in thecontract. Why should an unconcerned third Party be depositing the money back?How much is the money that they deposit? This is 4,98,518 dollars. This is theamount that both of them disclose. I am just correcting the figure, Sir. Why didthey deposit less? The surcharge levy was 4,98,973. But Andaleeb Sehegal andHamdan deposited only 4,98,518 dollars because Table II says that even thoughthey levied a higher amount, the surcharge which the Masfield paid for paymenten route to Iraq is 4,98,518 dollars. 4,98,518 and the identical amount AndeepSehegal and Hamdan pays back into the Bank of Jordan. 

Now, what happens to theCongress Party's contract? Amount of surcharge levied was 2,58,224 dollars. Forsome reasons the Masfield kept a few dollars in its pocket; and, surcharge paidis 2,50,022 dollars. Now, against the contract No. 57, m/10 of 57, which is theCongress Party's contract, who pays in two instalments in the Bank of Jordan?How much is the amount paid? It is $ 2,50,022. Does it require, as I said, acriminal lawyer expert Shri Ram Jethmalani's calibre to realise what the natureof these transactions was. 

The first limb of this transaction is that Iraq isviolating the sanctions and distributing the coupons to alleged friendsdepending on the degree of support they give to an Iraqi cause.