October 23, 2020
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For The Record

'Have You Flipped Your Principles?'

Unlike the Lok Sabha, the Rajya Sabha witnessed a spirited attack on the government on the Volcker issue, where the BJP's former law minister forcefully argued that "the least that the Prime Minister must do is to put this investigation on a correct

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'Have You Flipped Your Principles?'

Moving the motion for condemnation of the the alleged involvement of some Indian entities 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 my gratitude to you for permitting me to move this Motion under rule 167. The Motion I move reads:

That this House strongly condemns the alleged involvement of some Indian entities 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 highest level and from the political parties, whose alliance and coalition is in power, certain responses to what has been stated in the Independent Inquiry Committee's Report. Let us remember, and this needs to be underlined, that this Report is no ordinary document. This Report has not only domestic significance, as far as India is concerned, this Report is a document of high international credibility. And amongst others, this Report has mentioned, at least, two prominent Indian entities along with a third one, then, there are several other companies, and what has disturbed the country the most is a reference to a political party which has been in power in India for the longest duration of time as also a very hon. Member of this House, who at the time when this Report was prepared was India's Foreign Minister and our country's principal spokesman on Foreign Policy issues.

Sir, let me remind this House that when this UPA Government was voted to power, it had promised a corruption-free administration. The Prime Minister, as we take him for his words, had repeatedly said that there would be a zero-tolerance level, as far as corruption is concerned. Unfortunately, this Government opened its innings, and its very first stroke was the induction of tainted in the Union Cabinet. We were all enthused when our present Prime Minister and India's Finance Minister years ago had shed apart all technicalities and said in his own party's conference that Caesar's wife must be above suspicion. So, those who sit in high places must not be those against whom accusing fingers can be pointed out. While we were very enthused with the statement of his given in the mid-nineties at the Congress Party's Conference, we were certainly disappointed, as the entire nation was, when he somersaulted his stand and said, 'merely because you have a serious case against you is no ground to presume anything against you. There is a presumption of innocence till you are proved guilty'.

Sir, in the last eighteen months of this Government, you not only had tainted Ministers occupying high offices, you had absconding Ministers, you had jailed Ministers... 


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

Sir, I am not referring to subversion of various institutions which has taken place, which probably in this Session we will get a separate opportunity to do that, but the common thread which is a serious matter of concern on various issues which has been arising, which is really the core of this debate, is that in consideration of political stances we take in domestic polity or stances that we take as far as international issues are concerned, what is the influence of foreign entities on India's political entities. Unfortunately, this is not the first occasion that a charge has been made. This charge has been made almost contemporaneously 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 discussed seriously what was contained in that book, a dangerous place. When Mr. Seymor Harsh made allegations against one of India's principal politicians and a former Prime 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 you rightly 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 am prepared to discuss. But my point is this: what is the relevance of a 1976 discussion 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 the point I am making. (Interruptions)

SHRI ARUN JAITLEY: My friends in the Treasury Benches need not get so excited about 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 fits them. 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 be referring to one of the publications. When I come to that they will be free to take their objection, I will respond to it. All that I am saying is that this House under Rule 167 is discussing substantially one definite issue and that substantially one definite issue is the Volcker Committee Report where Indian political entities are alleged to have received economic benefits on account of the alleged stand which they took.

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

When I come to my substantive request to you with regard to the Mitrokhin Archives, I will deal with this issue. But all that I am saying at this moment now is, that you have the disclosures made with regard to CIA funding of India's politicians funding in Mr. Moynihan's book. You have now in the Mitrokhin Archives serious disclosures which are made. You have had allegations with regard to funding of various 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 subject and when the question of Mitrokhin Archives came up, we had shown authentic documents to say that Mitrokhin Archives is a figment of imagination of a gentleman and the reproduction, as has been established in the publication of the book itself, is not authenticated. So, to refer Mitrokhin Archives as something authentic publication in itself -- today it is under the jurisdiction of Indian courts where certain facts by certain individuals have been challenged -- is not correct. Therefore, a reference to Mitrokhin Archives, as authenticated document, on which the House can deliberate, is, I think, against the 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 in writing also. But, for the moment, I am merely making a reference with the object that disclosures are now coming and the latest one being in a Report prepared with the UN really to investigate its own functioning and management of the Oil-for-Food Programme. And, this is a disclosure which cannot be taken lightly in this country. 

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

You had a situation where sanctions were imposed against Iraq. But, obviously, the Iraqi people had to survive. I am not, for a moment, in this debate, going into the desirability of the sanctions or otherwise. But, it was a historical fact that they were imposed. Therefore, you had the Oil-for-Food Programme where Iraq is able to trade its oil on the UN pre-fixed price and in return what is humanitarianly required for Iraq in terms of food, medicines and other things it is able to purchase. The crux of the allegation is that there has been a misdemeanour in the management of the Oil-for-Food Programme. And, this mismanagement, amongst other facts, included the then Iraq regime dishing out favours to individuals and political entities which have been named in the Report.  

The methodology was very simple. Oil coupons were issued in favour of 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 of profit in-built into it. Profit was therefore being distributed to the beneficiaries. It has been now stated, and there is substantial evidence to back it up, that most of the beneficiaries who received the coupons, received it depending upon the degree of their support for the Iraqi cause and the degree of their opposition to the sanctions. Therefore, the crux of the allegation is that you were the beneficiaries named in the oil coupons and the beneficiaries who received coupons, depending on the political and the diplomatic stand that you took on the then issues which were confronting Iraq and which were of utmost concern to Iraq, its Government and its people. 

Now, we suddenly find, when the disclosures are made about Indian political entities amongst others who have been named in this, that these coupons were virtually tradable in the global market. Somebody had to go and pick up oil. You lift the oil and any commercial entity, which is involved in the oil trading business, lifted oil against such coupons. Whatever was the profit, it had to be shared between various people. The commercial entity, which would trade in oil, would certainly receive a part of the oil profit. It would have to share it with the beneficiaries who were the coupon-holders. And, through certain banking processes, the third shareholders in this profit had to be the persons by virtue of payment into certain banking systems in Jordan or elsewhere where the then Iraq administration would get the benefits back. So, the coupon-holders were the beneficiaries. The oil trading company 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 by depositing it in the accounts itself. Now, what do the Volcker documents indicate? I am only going to refer to three important pages with which we are concerned in this debate. And my question, after referring to this is: Is this not a matter which makes out a very, very strong prima facie case against people who are named and, therefore, a correct and a proper investigation in law must be 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 of inquiry and investigation the Government has embarked upon. 

Table II deals with oil sales summary of contracting companies. So, which are the companies that have traded in this oil? Table III deals with the non-contractual beneficiaries, and Table V deals with the surcharge payments. 

Let us first deal with Table III, which is a summary of oil sales by non-contractual beneficiaries. A non-contractual beneficiary is a person who was not a party to the contract. He was not in the business of buying or selling oil but, certainly, he was involved in some greasy transactions. Why should a person who is neither buying oil nor selling oil; who merely takes a political or diplomatic stand become a non-contractual beneficiary in an oil transaction, and who 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 is Masefield A.G., the quantum of oil is given, the phase in which this oil was lifted is given, the mission country which lifted the oil is given as Switzerland. And for my present purpose it is enough, Sir, the number of the contract of Congress Party is also given, M/10/57. Let us briefly remember it as contract 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 remember this as contract number 54. So, there is a contract number 57 for Congress Party and a contract number 54 for Mr. K. Natwar Singh. Notes of the public sector oil company SOMO allocation records name the beneficiary and give his description as member of the Indian Congress Party. This is the first disclosure that against contract number 57 it is the Congress Party, against contract number 54, it is Mr. K. Natwar Singh who are the beneficiaries. 

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

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

Now, there is a second important disclosure, Sir, that this document makes; and, that really clinches the entire issue. One need not be a criminal law investigator or a criminal lawyer of Mr. Jethmalani's eminence. Against these two contracts, Nos. 54 and 57, the Masfield decided to levy an illegal surcharge. That is the quantum 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, it was 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, the Masfield made an illegal surcharge of 2,50,224 dollars. So, the exact surcharge that the Masfield charged against both the contracts is mentioned in this document. This has to be paid back. Obvious. The Masfield says, "I have not dealt with Iraq, the beneficiary of the coupons, as traded in coupons, and given it to me, I give the surcharge back to you or your nominee I give the surcharge back and pay it back to Iraq." 

Now, what is the third document? It is Table V. The third document, which is Table V, at page 82, deals with the two oil transactions 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 with contract No. 54, that is, Mr. Natwar Singh's contract. Now, against Mr. Natwar Singh's contract, who deposits the amount back for the Iraqi benefit in the Bank of 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 the contract. 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 the amount that both of them disclose. I am just correcting the figure, Sir. Why did they deposit less? The surcharge levy was 4,98,973. But Andaleeb Sehegal and Hamdan deposited only 4,98,518 dollars because Table II says that even though they levied a higher amount, the surcharge which the Masfield paid for payment en route to Iraq is 4,98,518 dollars. 4,98,518 and the identical amount Andeep Sehegal and Hamdan pays back into the Bank of Jordan. 

Now, what happens to the Congress Party's contract? Amount of surcharge levied was 2,58,224 dollars. For some reasons the Masfield kept a few dollars in its pocket; and, surcharge paid is 2,50,022 dollars. Now, against the contract No. 57, m/10 of 57, which is the Congress 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, a criminal lawyer expert Shri Ram Jethmalani's calibre to realise what the nature of these transactions was. 

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

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