| Natwar Singh arrives for a cabinet meeting at South Block on Thursday. (PTI)
New Delhi, Nov. 3: The two oil contracts listed in the Paul Volcker report on irregularities in the oil-for-food programme in Iraq against the name of external affairs minister Natwar Singh and the Congress Party appear to be closely linked.
The “non-contractual beneficiary” or the commission agent for a deal received his commission but also had to pay kickbacks to the Iraqi regime. The “surcharge” or kickback to the Saddam Hussein regime was paid, ostensibly on behalf of both Natwar Singh and Congress, by the same company ' Hamadan Export ' and its owner Andaleeb Sehgal, a friend of Natwar Singh’s son Jagat Singh.
Why would Jagat Singh’s friend’s company pay kickbacks to the Iraqis unless the two deals were linked' Is it possible that the two deals were either for the same person or the same entity but were listed under different names' The circumstantial evidence seems to point to that.
The oil-for-food scam as it applies to “Natwar Singh” and the “Congress Party” involved two stages of illicit payments:
One, oil allocations were given to individuals or entities who were considered influential by the Iraqis ' in this case, Natwar Singh and the Congress; and they sold their allotments, presumably after charging a commission, to an intermediary company ' in this case, a Swiss company, Masefield AG, involved in international oil trading.
Two, Masefield AG, or the beneficiary, had to pay a kickback to the Iraqi regime designated as a “surcharge”.
What was this “surcharge”' The Volcker report says that “in the autumn of 2000” the Iraqi government “initiated its policy of collecting illicit surcharges on every barrel of oil sold”. This surcharge or kickback was assessed between 10 and 30 cents per barrel of oil sold. Payments had to be made to Iraqi- controlled bank accounts or in Iraqi embassies.
According to the Volcker report’s Table 3 (“Summary of Oil Sales by Non-Contractual Beneficiary”), under Natwar Singh’s name there were two contracts of 2 million barrels each (M/09/120 and M/09/54) but only one of them (M/09/54) was used. The other non-contractual beneficiary named was the Congress Party under which four contracts of 1 million barrels each were allotted but only one was lifted (number M/10/57).
Under normal circumstances, Masefield AG should have paid the surcharge to the Saddam Hussein regime.
However, if one examines Volcker Report’s Table 5 (“Surcharge Payments Associated with a Contracting Company”), under Masefield AG contract number M/09/54 (contract under Natwar Singh’s name), the “surcharge” to the Iraqi government is shown as being paid by Andaleeb Sehgal and his company Hamadan Export in two instalments ($60,000 and $438,518). The surcharge was paid into Jordan National Bank.
Consider contract in the Congress Party’s name. Under Masefield AG’s contract number M/10/57 (the Congress Party contract), the “surcharge” is once again paid in two instalments ($59,808 and $190,214) by the same company, Hamadan Export, owned by Andaleeb Sehgal. The surcharge was deposited at Jordan National Bank.
If one now examines the report’s Table 1 (“Oil Allocations and Sales Summary by Contracting Company”), it adds up the surcharge paid in the two contracts, listing both the contracts (to “Congress” and “Natwar Singh”) showing a total surcharge payment of $748,540 (gross total of the four instalments above) and an outstanding of $657 against Masefield AG (or Hamadan Export).
Even a cursory examination of Table 5 shows that most contracting companies deposited the “surcharge” themselves directly to the designated bank account. Why would Masefield AG ask Hamadan Export and Andaleeb Sehgal to pay the kickback' One possible explanation can be that Hamadan and Sehgal were the beneficiaries of the oil deal and therefore, they had to pay the kickback. Or else, why should they part with this kind of money'
The two contracts, in the name of the Congress Party and Natwar Singh are, therefore, joined together through Hamadan Export.
The important and unanswered question is: Who was hiding behind Hamadan and Sehgal' The Congress Party, Natwar Singh, both or someone else who could operate in their name with impunity'