The Hindu Business Line : Iraq Survey Group's chance discovery

The Iraq Survey Group has stumbled on a shocking collusion among the Iraqi regime, UN officials, and contractors in more than 40 countries, including the permanent members of the Security Council, in subverting the UN-administered Oil-for-Food Programme into the biggest and the most extensive international racket of modern times. The ISG has compiled a catalogue of the high-profile operators of the spoils system, naming all the names and mentioning specific figures. Where will the chips fall, wonders B. S. Raghavan.

THE entire 1000-plus page report of the Group of Weapons Inspectors, known as the Iraq Survey Group (ISG), headed by Dr Charles Duelfer, the Special Advisor to the Director of the Central Intelligence Agency (CIA), on Iraq's mythical Weapons of Mass Destruction (WMD) has been put on its Web site (www.cia.gov) for the browsers of the world to delve into.

It is, as its size suggests, a massive compendium setting out in refreshingly transparent detail its exhaustive inquiries and candid disclosures dismissing the charges levelled against the deposed Iraqi President, Mr Saddam Hussein, of producing and stockpiling WMD and of his links with Al Qaeda.

It also bears ample testimony to the nature of the open society that the US is, and to the robust independence of an official agency commissioned by the very Government whose credibility it has now called into question.

Thus, at the most sensitive juncture in the US politics, with the presidential election barely two weeks away, the ISG has not shied away a whit from queering the pitch for a Bush victory. "We, the people" of India, basking as citizens of the world's largest democracy, should ask ourselves whether it is possible to conceive of such high standards of professional integrity and moral courage in our institutions and public functionaries.

Shocking racket

Be that as it may, the surprising part of the ISG report is not its rubbishing the existence of WMD. Information trickling from Iraq after its occupation by the US in the form of statements of knowledgeable official and non-official sources had long prepared the people everywhere, although not with such clinching finality, to all talk of WMD in Iraq being a figment of the Bush Administration's imagination.

The surprising part is that the ISG has devoted a considerable part of its report to a shocking narration of instances of seeming collusion among the Iraqi regime, UN officials, and contractors in more than 40 countries, including the permanent members of the Security Council, in subverting the UN-administered Oil-for-Food Programme into the biggest and the most extensive international racket of modern times. It has painstakingly compiled a catalogue of the high-profile operators of the spoils system, naming all the names and mentioning specific figures, and boldly letting the chips fall where they may.

The monumental mulcting went like this: Following the Gulf War, Iraq had been subjected to crippling sanctions imposed by the UN. It was found that instead of hamstringing in any way the high life led by Saddam and his coterie, they only contributed to the hardships of the people of Iraq, particularly the women and the children, the ailing and the disadvantaged, who had to go without food, medicines and basic necessities.

In 1996, as a compassionate measure, the Security Council instituted the Oil-for-Food Programme as a way of creating a corpus of receipts under the UN auspices from the sale of oil by Iraq to countries in need of it at a mutually agreed price, and utilising the proceeds to buy food, medicines and other essential goods and services from countries (which may or may not be buyers of the oil) in a position to supply them. In fact, the Iraqi authorities were given full discretion to decide to whom they would sell what quantum of its oil and from whom they would buy what kind of relief supplies at what price.

This part of the ISG's report is all about how deals for supply of relief items on the strength of allotments of oil or issue of "oil vouchers" degenerated into pay offs, kickbacks and money laundering.

Gravy train

The Security Council, which also doubled as the Sanctions Committee for Iraq, was supposed to exercise oversight on the transactions between Iraq and the various buyers of oil and suppliers of relief items, based on reports furnished by the UN Office of the Iraq Programme (OIP). In no time, this office was handling the largest programme in UN history and was making disbursements from annual receipts of more than $10 billion flowing into the corpus as oil revenues. The scale and magnitude of the operation will be evident when compared with the total annual UN Budget which was a mere $1.5 billion.

Over a period, the Sanctions Committee left it to the OIP to approve contracts so long as it did not include embargoed items such as illicit arms, suspected materials for weapons programmes and equipment for bolstering military capabilities. From time to time, reports of purchases of gilded tiles and other luxuries for Saddam's palaces, smuggling of oil, excessive pricing and so on used to be received and the Committee "took note of the information".

Even when the Committee learnt in 2000 that an Indian company was clandestinely helping the Iraqi Government to circumvent the prohibition against purchase of items for a nuclear fuel plant, it let the matter peter out after debating for months whether the Government of India should be asked to investigate. All pretence of keeping a strict control over the use of the corpus was soon gone, and a bewildering array of non-essential items — fire trucks from Russia, earth-moving machines from Jordan, station wagons from India, trucks from Belarus and garbage trucks from China — made their way to Iraq taking advantage of OIP's laxity. This state of affairs inevitably enabled all those connected with the Oil-for-Food mission to convert it into a gravy train of unheard of proportions.

The suppliers of supposedly essential goods in exchange for Iraqi oil, especially if they were countries friendly to Iraq, were asked by the then officials of the Iraqi regime to inflate their bills by 10 per cent or more, and deposit in numbered accounts of the colluding individuals and companies the excess amount billed on receiving payment. They also connived to dump into Iraq at exorbitant prices machinery and equipment which were substandard or non-existent. According to Dr Khidr Abbas, now Iraq's Interior Minister, millions of dollars were paid for drugs not delivered, medical equipment that did not work, and maintenance agreements that were never honoured. Iraq's warehouses overflowed with defective ultrasound machines from Algeria, overpriced dental chairs from China and hundreds of wheelchairs that simply lay unused and unusable. A New York Times article published on August 13 estimated the amount siphoned by unauthorised trading of oil and collection of kickbacks from companies approved by the UN to do business with Iraq to be not less than $10 billion, most of it going to line the pockets of the ruling clique and its favourites within and outside the country at the time.

Fat in the fire

In bringing this fraud to light, the ISG has done nothing more than putting its official stamp on accounts ricocheting round the world ever since the media in Baghdad, with Al-Mada in the lead, based on the documents willingly furnished (and subsequently declared authentic) by Iraq's Ministry of Oil, had come out on January 24 with full length versions of the scam and the identities of those perpetrating it. The list compiled from 13 secret files maintained by the former Iraqi Vice-President, Mr Taha Yassin Ramadan, and the former Oil Minister, Amir Rashid, includes private individuals, business firms, political parties, assorted civic and religious groups, and other organisations.

Some of the notables mentioned as the recipients of cuts and commissions (all of whom have vigorously denied the imputation) are: Russian ultranationalist Vladimir Zhirinovsky and his Russian Liberal Democrat Party; a former French interior minister Charles Pasqua; Indonesian President Megawati Sukarnoputri, the son of Lebanese President Emile Lahoud, as also the Peoples Liberation Front of Palestine, the Russian Orthodox Church, the Russian Communist Party, the Palestine Liberation Organisation, and prominent officials in Arab Emirates, Austria, China, Egypt, France, Jordan, Sudan, Syria, Turkey, the UK, and the US. The Indian National Congress and one Biham Singh from India, also figure in it with grants of 4 million and 5.5 million barrels of oil respectively. While Mr Anand Sharma of the Congress Party has said that "it is not to be taken seriously", since "it is not factually correct", the identity of Biham (Bhim?) Singh could not be established.

The fat is in the fire with the appointment by the UN Secretary-General of the former Chairman of US Federal Reserve, Mr Paul Volcker, to investigate and give his findings.

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