The Telegraph
Since 1st March, 1999
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Natwar Junior’s Baghdad connection
- Wary South Block takes neutral stand on oil scandal linked to its boss

Washington, Oct. 30: The ministry of external affairs, headed by K. Natwar Singh, has firmly distanced itself from Singh’s efforts to defend himself against allegations by a three-man, UN-appointed panel that the minister was a beneficiary in the corruption-ridden “oil-for-food” programme during the twilight years of the Saddam Hussein regime in Baghdad.

Like the Congress Party, of which Singh is a leader, South Block wants its minister to defend himself without the props or the extensive infrastructure for spinning stories within the MEA, though the Prime Minister has said there is “insufficient” evidence against him.

Immediately after news broke during the weekend about Singh’s alleged links with the Saddam regime’s system of bribery and kickbacks in the oil-for-food programme, the top bureaucrats in South Block sent word urgently to their divisions dealing with the issue that they should not be seen in any way as taking sides in the controversy.

As a result, hectic efforts by the minister’s personal staff to have his statement denying the UN inquiry panel’s allegations put up on the MEA website have so far not been successful, according to sources in South Block.

Normally, the MEA website, increasingly modelled on the US state department’s site, puts up material, including statements by the minister, within minutes of these happening.

MEA has reasons to steer clear of the controversy.

In its archives, it has several cables sent by two of its successive ambassadors in Baghdad since the start of the oil-for-food programme detailing visits by Jagat Singh, son of Natwar Singh, to Baghdad at a time when Saddam Hussein was willing to pay any price to divert pressure on his regime from the UN sanctions.

Jagat Singh, according to those who have seen these privileged telegrams, was in Baghdad on behalf of his friend who owned a company, Hamdan Trading, which sought to work with the Saddam regime under the oil-for-food programme.

The Indian embassy in Baghdad extended courtesies to Jagat Singh during his visits because the Indian Foreign Service customarily goes out of its way to help visiting former IFS colleagues and their families: Natwar Singh was in the IFS for three decades before joining politics.

But the embassy had reason to help Jagat Singh also because Hamdan Trading was bidding for work in Iraq that was being sub-contracted by the Indian government-owned State Trading Corporation (STC).

STC figured prominently in Indian efforts to get a slice of the oil-for-food deals, but the state-run outfit was often unsuccessful in doing what it set out to do in Saddam’s Iraq because of bureaucratic limitations on its ability to meet Baghdad's demands. As a result, it has drawn no flak in the investigation report by the UN-appointed panel, headed by Paul Volcker, former chairman of the US Federal Reserve.

South Block’s reluctance to join Singh in his defence is also because it is aware that Volcker did not simply accept any document found in the Iraqi oil ministry after the ouster of Saddam as sacrosanct.

At least one of Volcker’s 100 investigators was in India to check some of the allegations of wrong-doing by Indian companies and individuals, according to a former undercover official from an Indian domestic investigation agency who was posted at the Indian mission here.

This official facilitated the Volcker investigator’s enquiries in India and put him in touch with CBI officials in New Delhi during one phase of the UN-mandated inquiry.

Therefore, the MEA is unwilling to trash the Volcker report the way Singh has done.

In the murky world of underhand deals in securing oil contracts through the $60-billion oil-for-food programme, some Indian companies have come out smelling like roses even though they had big stakes in Baathist Baghdad.

Reliance Petroleum Ltd, according to Volcker’s investigations, lifted 2.8 million barrels of Iraqi oil under the programme, but it was neither asked to pay any surcharge -- euphemism for kickbacks ' nor did it give any kickbacks, according to documents found by the UN-appointed investigators.

The public sector Indian Oil Corporation (IOC) lifted a whopping 42.58 million barrels of Iraqi crude at a cost of $800.62 million and was asked by the Saddam regime to fork out $893,914 in surcharges. But IOC refused and is shown in Iraqi documents as having owed the money to the Saddam regime.

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