On a common plane (November 4, 2005)

The Oil For Food shindig has raised issues of ethics

By Swapan Dasgupta

India’s beleaguered External Affairs Minister K. Natwar Singh and the equally harried British MP George Galloway are about as similar as chalk and cheese. Singh, a refined product of Mayo College, St Stephen’s and Cambridge, is a former diplomat who married into the Patiala royal family. Galloway, on the other hand, proudly boasts his working class Scottish origins and revels in a form of inverted snobbery. If Singh speaks in measured tones, is a bibliophile and oozes charm and courtesy, Galloway is brusque and is prone to flying off the handle. Those who watched Galloway’s dramatic re-entry to the House of Commons in the face of overwhelming odds last May will remember his memorable slugging match with TV presenter Jeremy Paxman. In the Beltway, they still talk about his pugnacious banter with the stuffed shirts at a Senate Committee hearing earlier this year, when he gave as good as he got. By contrast, Singh’s foray into the pre-Cold War world of non-alignment is a guaranteed cure for insomnia.

Yet, today, thanks to very strange circumstances, Singh and Galloway find themselves in the same boat. Both have been accused by the UN-sponsored independent committee headed by former Federal Reserve chairman Paul Volcker of benefiting financially from the regime of the ousted Iraqi dictator Saddam Hussein. Singh has been called a “compromised” politician and a lobbyist and the Opposition BJP has demanded his resignation. Galloway has been compared to Lord Haw Haw—the English renegade who became a publicist for Hitler—and described by a US Senator as “not an honourable man or a good man”. His conduct is being investigated by the British parliamentary commissioner for standards. Both have vehemently denied the accusations, both have threatened legal action and both are fighting for their political survival.

The alleged misdemeanours of Singh and Galloway centre on Saddam’s successful subterfuge of the UN-monitored Oil for Food programme in Iraq. Having decided that its oil wealth could be transformed into a powerful foreign policy weapon and an instrument of Baathist self-aggrandisement, the Saddam regime honed in on individuals who could gauge the lucrative potential of anti-imperialism. What Saddam did was nothing novel. He merely emulated the patronage disbursement methods of the erstwhile Soviet Union. More to the point, these complicated financial dealings would have remained undiscovered had President George W. Bush not forced a regime change in Iraq in 2003.

For George Galloway, if the Senate’s Governmental Affairs Committee inquiry and the Volcker Report are to be believed, the Iraqi gift of oil sale rights meant entering into an understanding with Fawaz Zureikat, a Jordanian businessman friend. It was Zureikat who sold these rights to Switzerland-based oil traders, received the money, collected the illegal surcharges and funnelled the proceeds into the accounts of a charity run by Galloway and his estranged Palestinian wife Amineh Abu Zayyad. The linkages between money paid by Swiss oil traders into Zureikat’s account and their disbursement into bank accounts in Jordan held by Zayyad have been established by both committees. Galloway’s former wife benefited to the tune of $700,000, a not inconsiderable sum.

Although Singh’s alleged dealings with the Iraqi regime have not been scrutinised in as much detail, the Volcker Report has divulged enough to put a question mark on his political future. Singh and the Congress Party were allegedly granted similar oil sale rights. The allotments were passed on to a Swiss company Masefield AG for handling. The Volcker Report, however, has provided no details of payments made to either Singh or his nominees, but there is a presumption that payments were made which yielded the beneficiaries a profit which, many believe, were as high as 30 per cent of the contract value.

There are, however, another set of transactions which are more damaging. The Iraqis, it would seem, also gave oil rights directly to Masefield. The Volcker Report says it that Singh was to be the “non-contractual beneficiary” of these deals. In concrete terms this meant that the illegal surcharge amounting to $749,197 would be handled by Singh or his nominee. Consequently, $748,540 was paid to Hamdan Export and its owner Andleeb Sehgal, a close family friend of Singh, in Jordan at various times in 2001, presumably by Masefield. The money was then further diverted into the accounts of Iraqi officials, as kickbacks.

The Volcker Report refers to “layers of individuals and companies between the allocation and end-use of Iraq’s crude oil (which) resulted in transactions where the UN could not determine from the face of the contract who actually was benefiting from or controlled the purchase of oil.” In the transactions with which Singh is linked, there are two routes. The first involved the contracted beneficiary selling his rights to an oil trader and making a profit from the commission. The second involved the oil trader securing the allotment directly but channelling the surcharge into the accounts of the specified “non-contractual beneficiary”. This money was then routed back into Iraq. At this point, the “non-contractual beneficiary” became the handling agent of Iraqi kickbacks.


The Volcker Committee says that its claims are backed by the records of the Iraqi State Oil Ministry Organisation (SOMO), bank records in Jordan and other records found in Baghdad. If true, it would suggest that both Singh and Galloway have some explaining to do. Certainly, Prime Minister Manmohan Singh’s stated belief that the facts are “insufficient” to warrant “any adverse conclusion” against Singh seems a trifle hasty. It does not behove a Prime Minister to dismiss an international inquiry so peremptorily.

What is interesting is that in protesting their innocence both Singh and Galloway are speaking the same language. Galloway has suggested that the documents implicating him are “fabricated” and Singh told The Hindu that the Volcker Report was based on “forgeries.” Testifying under oath to the US Senate committee on May 17, Galloway stated that “I am not now, nor have I ever been, an oil trader, and neither has anyone on my behalf.” He added that the businessman Zureikat “never gave me a penny from an oil deal, from a cake deal, from a bread deal, or from any deal.” On his part, Singh hit back with a series of questions: “Is there any evidence that I or my son ever had contact with this company (Masefield AG) or any other company involved in this? Is there any evidence that I had ever heard of this company?”

Finally, Galloway has consistently seen the attacks on him as part of an orchestrated political campaign. He has stuck to his position with great theatrical aplomb, prompting Senator Coleman to observe that “It’s a constant pattern of deny, deny, deny… It’s something he does all the time—shifting the focus to something that is not in front of you.” Being India’s External Affairs Minister, Singh should have been more inhibited. But he too has charged Volcker of targeting those who opposed US intervention in Iraq. “I opposed sanctions, I opposed the war and I opposed sending Indian troops to Iraq.”

Both Singh and Galloway are blessed with political certitudes. Of course, they are not alone. Throughout India and Britain there are countless well-meaning individuals who believed President Bush’s Iraq war was a misadventure. Fortunately, few of them find their names listed as “non-contractual beneficiaries” of illegal deals cut by a tyrannical regime. The issue is not politics but ethics. It is this issue that has to be addressed by both the anti-imperialist patrician and the radical plebeian.

(Published in The Telegraph, Calcutta, November 4, 2005)