11-02-2005, 12:36 AM
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Poor Natwar is just a fiduciary; </b>
<b>Sonia Congress is the real beneficiary</b>
Sunday October 30 2005 12:01 IST
S Gurumurthy
Amid all their hectic political commitments in India the Congress Party led by Sonia Gandhi and Natwar Singh, the External Affairs Minister now, seem to have spared time for a mysterious business in Iraqi crude oil. This is what the Independent Inquiry Committee (IIC) appointed by the United Nations in its final report released the day before yesterday (October 27, 2005) confirms.
The IIC report says more. In simple terms that it is a straight bribe given by the Iraqi regime to the Congress and to Natwar Singh. This stunning revelation by the IIC shows that the Congress party and Natwar were chosen by Saddam Hussein's Iraqi regime for transferable entitlement of Iraqi crude oil as political friends of the
Iraqi government under the Food-for-Oil Programme of the United Nations. The allotment is made with a view to favouring the friends of the Saddam's regime with the black gold so that they could make a killing by selling it. Along with Natwar and the Congress from India are two similar allottees of Iraqi crude obviously in the category of the `politically influential'.
One is well known, the Reliance Petroleum and the other, an unknown `Bhim Singh'. But mysteriously Reliance was not allotted crude for its refinery, but like Natwar Singh was, as a favoured party. While Sonia Congress and Natwar got an allotment of four million tonnes of crude each, Reliance got an entitlement of 19 million tonnes and the unknown Bhim Singh 7.3 million tonnes.
Now, some sideshow is unavoidable. What is this Food-for-Oil Programme? When the United Nations had imposed sanctions on Iraq from 1990, the Iraqi people became starved of food and medicine and other essentials. So from 1996, the Saddam regime was allowed by the United Nations to export crude oil but deposit the proceeds in a special bank account (technically known as Escrow Account) in the name of the UN. From out of that account the UN would pay for all Iraq's essential imports of food, medicines, etc.
This UN scheme was operational from 1996. But the critical period was between September 2000 and August 2002. It was during this period that the Saddam regime outsmarted the UN and stashed away some $1.8 billions out of the UN scheme when the UN officials `looked the other way' obviously for `the right consideration'.
During this period, the IIC report says, Iraq exported crude oil in excess of $64 billion and deposited the amount in the escrow with the UN. In the same period, according to the IIC report, the UN paid out of the Escrow account $24.8 billion for the essential import bill of Iraq. While Iraq behaved honourably from 1996 to 2000 August, obviously forced by the high-handedness of the US, it decided to exploit the loopholes in the UN scheme for making money `on the side'.
Under the scheme, the UN will decide the fair market price at which Iraq will sell the oil and will control the money obtained on export. But the UN scheme left a large loophole for Iraq to exploit. Iraq could decide who to export the oil to and from whom to import the essential goods from. While the cash was controlled by the UN, the crude and the decision to spend were in the hands of Saddam. Iraq exported crude through or to 248 companies.
This included the Indian Oil Corporation also. Out of them, 139 companies paid `on money' of $ 229 million to Saddam's regime over and above the official payment for oil exports into the Escrow Account of the UN. (But the Indian Oil on which a demand for payment of on money of $893,914 was made refused to pay the bribe and so did not get future allotment. The BJP, which was in power at that time, and Ram Naik, who was the Oil Minister then, indeed can feel proud!). On the import side, Iraq imported essentials for $ 24.8 billion from 3614 companies and out of them 2253 companies paid kickbacks of $1.5 billions to Saddam' regime. The Saddam operation lasted till August 2002, when the Iraqi regime on its own ceased taking on money and kickbacks.
Every lamppost in the global oil market knew that bribes were being paid by the buyers of Iraqi oil. Yet the UN did nothing about it till after Saddam himself was overthrown by the US and allies. After everything was over, in April 2004 UN Secretary General Kofi Annan appointed the IIC to examine, among other things, ``allegations of fraud and corruption'' by UN officials and those who entered into contracts with the UN and Iraq. The UN backed the investigation by a resolution asking the member nations to cooperate in the investigation.
The IIC consisted of Paul Volcker, the former US Federal Reserve Chairman and two more, an expert on money laundering and an expert criminal prosecutor. The IIC gave an interim report on Feb, 2, 2005, and a second interim report on March 29, 2005 and has come out with the final report on October 27, now.
Now on with the main story... While till Aug 2000, the Iraqi regime was selling oil to recognised global oil companies or traders, from September 2000 it began selecting its oil recipients to influence foreign policy and influence public opinion in its favour. The Saddam regime began to allot oil entitlements to companies and individuals from countries perceived to be friendly to Iraq, particularly permanent members of the Security Council so that it could influence theirs to get the sanctions eased. (No one can deny this is in Iraq's legitimate national interest).
Thus Russia received a third of the oil entitlements in this period, and France came a close second! Iraq did disfavour the US oil companies, but that did not make any difference to the US companies which could buy substantial Russian oil entitlements from Iraq and get their supplies!
The US could be at war with Saddam, but that did not prevent US companies from buying Iraqi crude in `black market' and making gain. Not that the US was unaware of it either! Were all allottees of Iraqi crude only the regular players in the oil market, the oil companies or oil traders? `No' says the Volcker Report.
The Iraqi crude allottees, it says, consisted of a wide range of individuals and groups, including political parties, both ruling and opposition, who espoused pro-Iraqi views and organised anti-sanction activities.
They are named in the records of the Iraqi government's State Oil Marketing Organisation (SOMO) as `non-contractual beneficiaries' of the entitlement. Note the words carefully. They are not the ones who will enter into contracts to buy the oil. They are just beneficiaries of some buyer who will contract and buy under their entitlement. They are not the ones who will buy the oil. They are not the players in oil market.They are political players whose opinion matters for Saddam and Iraq.
In substance the Saddam Regime bribed them to speak in favour of Iraq. It is in this category that Natwar Singhs and Sonia Congress fall in the Iraqi calculations. And it is for this purpose that the entitlement of Iraqi crude was given to them. What will the Congress party led by Sonia and Natwar Singh do with this entitlement? Volcker report says that these `political beneficiaries often used little known intermediary companies to enter into contracts for their entitlements and then the oil is sold through the intermediaries to established oil companies or traders'.
The oil companies and traders pay the intermediaries `on-money' over and above the UN official price which, says the Volcker report, includes the payment due to the entitlement holder. This is the bribe to the political favourite of the Saddam regime.
What did the Sonia Congress and Natwar Singh get in this side business? Table 5 of the Report under the head `Summary of Oil Sales by Non-Contractual Beneficiaries', that is, says the Volcker report, `individuals and entities other than named contracting party' this category is listed.
<b>Coming to Indian political favourites of the Saddam regime, the Table 5 lists: `Beneficiary: India: Congress Party' with an entitlement of 4 million barrels of crude' and `Beneficiary: India: Singh Mr K. Natwar' with an entitlement of 4 million barrels again. In the last column against Natwar Singh it is noted that in the SOMO records he is mentioned as `Member Indian Congress Party'. Poor Natwar, he is not the real beneficiary, just a fiduciary.
The real beneficiary is the Sonia Congress. Natwar is just a foot soldier of the party! More, the record shows that out of the 8 million barrels allotted to the Sonia Congress half of it, 3 million barrels were bought by one `Masefield AG' based in Switzerland</b>.
<b>This company's name does not figure anywhere else. So whatever Masefield paid the Sonia Congress and Natwar for the benefit of the Sonia Congress is limited to little more than a third of the entitlement, the balance having lapsed. Poor thing, the Sonia Congress actually lost almost two-thirds of the bribe!</b>
But what about Reliance and who is Bhim Singh?
The Volcker report lists Reliance to which a crude oil entitlement of 19 million barrels had been made by Saddam regime not as an oil company; but as a `non-contractual beneficiary'. Like the Sonia Congress and Natwar Singh in Table 5! The oil companies, including Indian Oil Corporation, are listed separately.
Also the oil entitlement to Reliance was lifted, not by Reliance, but by Alcon one of the four intermediary companies, which bought most of the entitlements. That means Reliance was chosen not as an Oil company but as an influential entity which could swing the public opinion in favour of the Saddam regime.
Obviously Reliance has no interest in influencing any one in favour of the Saddam regime. So it is a mystery why Reliance, which is an oil company, is listed as a `non-contractual beneficiary' in which category only bribe takers are listed. Who was Reliance fronting for?
The entitlement to Reliance that was lifted is more than five times the entitlement to the Sonia Congress that was lifted finally. So the amount that Reliance got for someone unknown should be five times more! Also who is Bhim Singh to whom an entitlement of 7.3 million barrels were made, but not a barrel was lifted.
There is no Bhim Singh known in Oil trade in India. Again he is also lifted in Table 5, which is the list, stated in simple terms, of bribe takers. Volcker report can say only this much. The rest the Indian government has to unearth. But what will the poor Prime Minister do when his own party, his own leader and his own External Affairs Minister are involved?
www.newindpress.com/colum...&Sub=&Cat=
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<b>Sonia Congress is the real beneficiary</b>
Sunday October 30 2005 12:01 IST
S Gurumurthy
Amid all their hectic political commitments in India the Congress Party led by Sonia Gandhi and Natwar Singh, the External Affairs Minister now, seem to have spared time for a mysterious business in Iraqi crude oil. This is what the Independent Inquiry Committee (IIC) appointed by the United Nations in its final report released the day before yesterday (October 27, 2005) confirms.
The IIC report says more. In simple terms that it is a straight bribe given by the Iraqi regime to the Congress and to Natwar Singh. This stunning revelation by the IIC shows that the Congress party and Natwar were chosen by Saddam Hussein's Iraqi regime for transferable entitlement of Iraqi crude oil as political friends of the
Iraqi government under the Food-for-Oil Programme of the United Nations. The allotment is made with a view to favouring the friends of the Saddam's regime with the black gold so that they could make a killing by selling it. Along with Natwar and the Congress from India are two similar allottees of Iraqi crude obviously in the category of the `politically influential'.
One is well known, the Reliance Petroleum and the other, an unknown `Bhim Singh'. But mysteriously Reliance was not allotted crude for its refinery, but like Natwar Singh was, as a favoured party. While Sonia Congress and Natwar got an allotment of four million tonnes of crude each, Reliance got an entitlement of 19 million tonnes and the unknown Bhim Singh 7.3 million tonnes.
Now, some sideshow is unavoidable. What is this Food-for-Oil Programme? When the United Nations had imposed sanctions on Iraq from 1990, the Iraqi people became starved of food and medicine and other essentials. So from 1996, the Saddam regime was allowed by the United Nations to export crude oil but deposit the proceeds in a special bank account (technically known as Escrow Account) in the name of the UN. From out of that account the UN would pay for all Iraq's essential imports of food, medicines, etc.
This UN scheme was operational from 1996. But the critical period was between September 2000 and August 2002. It was during this period that the Saddam regime outsmarted the UN and stashed away some $1.8 billions out of the UN scheme when the UN officials `looked the other way' obviously for `the right consideration'.
During this period, the IIC report says, Iraq exported crude oil in excess of $64 billion and deposited the amount in the escrow with the UN. In the same period, according to the IIC report, the UN paid out of the Escrow account $24.8 billion for the essential import bill of Iraq. While Iraq behaved honourably from 1996 to 2000 August, obviously forced by the high-handedness of the US, it decided to exploit the loopholes in the UN scheme for making money `on the side'.
Under the scheme, the UN will decide the fair market price at which Iraq will sell the oil and will control the money obtained on export. But the UN scheme left a large loophole for Iraq to exploit. Iraq could decide who to export the oil to and from whom to import the essential goods from. While the cash was controlled by the UN, the crude and the decision to spend were in the hands of Saddam. Iraq exported crude through or to 248 companies.
This included the Indian Oil Corporation also. Out of them, 139 companies paid `on money' of $ 229 million to Saddam's regime over and above the official payment for oil exports into the Escrow Account of the UN. (But the Indian Oil on which a demand for payment of on money of $893,914 was made refused to pay the bribe and so did not get future allotment. The BJP, which was in power at that time, and Ram Naik, who was the Oil Minister then, indeed can feel proud!). On the import side, Iraq imported essentials for $ 24.8 billion from 3614 companies and out of them 2253 companies paid kickbacks of $1.5 billions to Saddam' regime. The Saddam operation lasted till August 2002, when the Iraqi regime on its own ceased taking on money and kickbacks.
Every lamppost in the global oil market knew that bribes were being paid by the buyers of Iraqi oil. Yet the UN did nothing about it till after Saddam himself was overthrown by the US and allies. After everything was over, in April 2004 UN Secretary General Kofi Annan appointed the IIC to examine, among other things, ``allegations of fraud and corruption'' by UN officials and those who entered into contracts with the UN and Iraq. The UN backed the investigation by a resolution asking the member nations to cooperate in the investigation.
The IIC consisted of Paul Volcker, the former US Federal Reserve Chairman and two more, an expert on money laundering and an expert criminal prosecutor. The IIC gave an interim report on Feb, 2, 2005, and a second interim report on March 29, 2005 and has come out with the final report on October 27, now.
Now on with the main story... While till Aug 2000, the Iraqi regime was selling oil to recognised global oil companies or traders, from September 2000 it began selecting its oil recipients to influence foreign policy and influence public opinion in its favour. The Saddam regime began to allot oil entitlements to companies and individuals from countries perceived to be friendly to Iraq, particularly permanent members of the Security Council so that it could influence theirs to get the sanctions eased. (No one can deny this is in Iraq's legitimate national interest).
Thus Russia received a third of the oil entitlements in this period, and France came a close second! Iraq did disfavour the US oil companies, but that did not make any difference to the US companies which could buy substantial Russian oil entitlements from Iraq and get their supplies!
The US could be at war with Saddam, but that did not prevent US companies from buying Iraqi crude in `black market' and making gain. Not that the US was unaware of it either! Were all allottees of Iraqi crude only the regular players in the oil market, the oil companies or oil traders? `No' says the Volcker Report.
The Iraqi crude allottees, it says, consisted of a wide range of individuals and groups, including political parties, both ruling and opposition, who espoused pro-Iraqi views and organised anti-sanction activities.
They are named in the records of the Iraqi government's State Oil Marketing Organisation (SOMO) as `non-contractual beneficiaries' of the entitlement. Note the words carefully. They are not the ones who will enter into contracts to buy the oil. They are just beneficiaries of some buyer who will contract and buy under their entitlement. They are not the ones who will buy the oil. They are not the players in oil market.They are political players whose opinion matters for Saddam and Iraq.
In substance the Saddam Regime bribed them to speak in favour of Iraq. It is in this category that Natwar Singhs and Sonia Congress fall in the Iraqi calculations. And it is for this purpose that the entitlement of Iraqi crude was given to them. What will the Congress party led by Sonia and Natwar Singh do with this entitlement? Volcker report says that these `political beneficiaries often used little known intermediary companies to enter into contracts for their entitlements and then the oil is sold through the intermediaries to established oil companies or traders'.
The oil companies and traders pay the intermediaries `on-money' over and above the UN official price which, says the Volcker report, includes the payment due to the entitlement holder. This is the bribe to the political favourite of the Saddam regime.
What did the Sonia Congress and Natwar Singh get in this side business? Table 5 of the Report under the head `Summary of Oil Sales by Non-Contractual Beneficiaries', that is, says the Volcker report, `individuals and entities other than named contracting party' this category is listed.
<b>Coming to Indian political favourites of the Saddam regime, the Table 5 lists: `Beneficiary: India: Congress Party' with an entitlement of 4 million barrels of crude' and `Beneficiary: India: Singh Mr K. Natwar' with an entitlement of 4 million barrels again. In the last column against Natwar Singh it is noted that in the SOMO records he is mentioned as `Member Indian Congress Party'. Poor Natwar, he is not the real beneficiary, just a fiduciary.
The real beneficiary is the Sonia Congress. Natwar is just a foot soldier of the party! More, the record shows that out of the 8 million barrels allotted to the Sonia Congress half of it, 3 million barrels were bought by one `Masefield AG' based in Switzerland</b>.
<b>This company's name does not figure anywhere else. So whatever Masefield paid the Sonia Congress and Natwar for the benefit of the Sonia Congress is limited to little more than a third of the entitlement, the balance having lapsed. Poor thing, the Sonia Congress actually lost almost two-thirds of the bribe!</b>
But what about Reliance and who is Bhim Singh?
The Volcker report lists Reliance to which a crude oil entitlement of 19 million barrels had been made by Saddam regime not as an oil company; but as a `non-contractual beneficiary'. Like the Sonia Congress and Natwar Singh in Table 5! The oil companies, including Indian Oil Corporation, are listed separately.
Also the oil entitlement to Reliance was lifted, not by Reliance, but by Alcon one of the four intermediary companies, which bought most of the entitlements. That means Reliance was chosen not as an Oil company but as an influential entity which could swing the public opinion in favour of the Saddam regime.
Obviously Reliance has no interest in influencing any one in favour of the Saddam regime. So it is a mystery why Reliance, which is an oil company, is listed as a `non-contractual beneficiary' in which category only bribe takers are listed. Who was Reliance fronting for?
The entitlement to Reliance that was lifted is more than five times the entitlement to the Sonia Congress that was lifted finally. So the amount that Reliance got for someone unknown should be five times more! Also who is Bhim Singh to whom an entitlement of 7.3 million barrels were made, but not a barrel was lifted.
There is no Bhim Singh known in Oil trade in India. Again he is also lifted in Table 5, which is the list, stated in simple terms, of bribe takers. Volcker report can say only this much. The rest the Indian government has to unearth. But what will the poor Prime Minister do when his own party, his own leader and his own External Affairs Minister are involved?
www.newindpress.com/colum...&Sub=&Cat=
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