Worldwatch Volcker and cover-up

Worldwatch
Volcker and cover-up
By Prof. M.D. Nalapat

The Congress president has sacrificed one of her most loyal followers, Natwar Singh, in order to provide a diversionary screen behind which a captive UPA government can collude with the Swiss authorities and certain tainted UN officials to prevent the facts brought out by Paul Volcker from becoming the basis for a criminal investigation that traces the individual(s) responsible for bartering the national interest.

Of course, our hapless PM knows the consequences of full disclosure. An unseen hand prodded the otherwise lethargic Sitaram Kesri into withdrawing Congress support to H D Deve Gowda, once CBI Director Joginder Singh began tackling the Bofors scam honestly. After Deve Gowda fell, so did the effective prosecution of that arms deal. During the NDA regime, even Ottavio Quatrocchi was enabled to escape to Kuala Lumpur, taking with him all hopes of recovering the money paid by the Swedish arms manufacturer to certain quarters. Deve Gowda had 15 MPs supporting him,while our PM has just one, a Rajya Sabha MP named Manmohan Singh. Small wonder that he has chosen two superannuated individuals, Virendra Dayal and Justice R.S. Pathak, to ?investigate? a matter that only the criminal detection and enforcement agencies of the country have the expertise to do.

PM knows the consequences of full disclosure. An unseen hand prodded the otherwise lethargic Sitaram Kesri into withdrawing Congress support to H D Deve Gowda, once CBI Director Joginder Singh began tackling the Bofors scam honestly.

What is the main finding of the meticulously-researched Volcker Report? It is that Saddam Hussein'sregime in Iraq allegedly gave vouchers for the purchase of millions of barrels of oil at below-market-price to Natwar Singh and to the Congress party. Volcker found that these vouchers were subsequently converted to cash through oil traders who paid a commission (in fact, a kickback) to both Saddam Hussein as well as to the favoured individuals who got the vouchers, a list that Volcker says includes Natwar Singh and the Congress party. In total, the IIC (referred to as the Volcker Committee for its head Paul Volcker) has documented $1.8 billion in illicit income within the $64 billion oil sales from 2000 to 2002, and the sale of $39 billion of humanitarian goods to Iraq (Report on the Manipulation of the Oil-for-Food Programme dated 27 October 2005. IIC. United Nations). Thus, while some of the proof exists with the UN'snow disbanded IIC, especially concerning Andaleeb Sehgal, a close family friend of Natwar?s, who sold the oil vouchers to the oil-trading company Masefield that in turn sold the vouchers or barrels of oil to major oil companies, most of the evidence remains hidden in Swiss banks, which is where the illicit income was deposited. Another group involved in the cover-up are the Swiss oil traders and companies that managed the transactions. It is here that the Indian Parliament should concentrate. Because, the way the investigations have been constructed so far, with a few months time given to a hyper-annuated Justice Pathak and a few months for the equally dated former UN bureaucrat Dayal, the entire ?enquiry? has been designed to elicit the response ?We do not have evidence? or ?We have not found evidence.? Had Manmohan Singh entrusted the job of investigation to the CBI, the DRI and the ED, they would have been able to make the stupendous effort needed to penetrate Swiss banking secrecy laws. Neither Dayal nor Pathak can do likewise, even assuming that they wish to. The reason is that such transactions involve a complex and secretive web of financial flows. Only experienced oil traders can handle the task of moving 1.9 million barrels of oil. These individuals and entities would be more than happy to give cover to the recipient of the oil vouchers, allegedly Natwar Singh and the Congress party, to claim that they have never ?seen or touched a barrel of oil?. This is precisely the nature of the transaction that enables deniability. Even the oil traders sitting in land-locked Switzerland, specifically in Zug, a quiet suburb of the bustling Swiss financial center Zurich, do not need to see or touch a barrel of oil. They too sell the oil through a dense network of specially-created shell companies to giant oil companies like Chevron and Exxon Mobil. Thus the giant oil majors too can technically state that they have not bought oil from Iraq. Instead, they can claim to have bought oil from the oil traders? shell companies registered in secretive places such as Switzerland or the Cayman Islands

According to the Volcker Report,those in India who were allegedly given oil vouchers by Saddam Hussein had expert help to convert these into cash.The most prominent oil and other commodities trader frequently in the news for sanctions-busting is Marc Rich, a billionaire trader who lives in Zug, Switzerland. Mr. Rich fled the US in 1983 just before a 51-count indictment was handed down for various alleged financial crimes. Mr. Rich has also spawned a whole generation of prot?g?es in commodities trading, many of who are based in Zug. The company, Masefield, mentioned in the Volcker Report as having managed the transactions for Natwar Singh and the Congress, is a Zug-based oil-trading company controlled by prot?g'sof Marc Rich.

Marc Rich has immense influence in the US, and his many friends there can be expected to help ensure that the facts in the Volcker Report be covered up the way several transgressions of Indian VIPs have been in the past,the better to blackmail them with later. Lewis ?Scooter? Libby, the indicted now former Chief-of-ater. Lewis ?Scooter? Libby, the indicted now former Chief-of-th later. Lewis ?Scooter? Libby, the indicted now former Chief-of-ater. Lewis ?Scooter? Libby, the indicted now former Chief-of-th ater. Lewis ?Scooter? Libby, the indicted now former Chief-of-tater. Lewis ?Scooter? Libby, the indicted now former Chief-of-th later. Lewis ?Scooter? Libby, the indicted now former Chief-of-ater. Lewis ?Scooter? Libby, the indicted now former Chief-of-thater. Lewis ?Scooter? Libby, the indicted now former Chief-of-thry homes in several European countries. Libby is reported to have been paid over $2 million in fees by Mr. Rich. Libby was recently indicted by the US Justice Department in the CIA leak case concerning agent Valerie Plame. Unfortunately for those wishing to discover and punish the guilty,the Swiss banking authorities have become accomplices of several individuals guilty of fraud and worse.Indeed,Switzerland can almost be described as a Rogue State,so blatant is the protection it gives to international criminals,many of whom have offices there. The Swiss have made it almost impossible to recover ill-gotten money,once they are given charge of it. The absence of the ?principle of discovery? ? the process of fact-finding using subpoena power ? within Switzerland'scourt system makes it easy for criminals to maintain secrecy. Indeed, it is a crime in Switzerland to report financial wrong-doing done by one'sboss to the provincial/Cantonal or Federal authorities ! Investigations are particularly difficult, especially when the target is someone who is favoured by the Swiss government. Marc Rich is one of Switzerland'swealthiest residents, and is one of its largest taxpayers.He is discreetly protected by the Swiss police and security apparatus, as many journalists seeking information have found out.

These individuals and entities would be more than happy to give cover to the recipient of the oil vouchers, allegedly Natwar Singh and the Congress party, to claim that they have never ?seen or touched a barrel of oil?.

In practice, there is little genuine separation of powers in Switzerland, and the judiciary there has a very limited role,especially in financial matters. Only by establishing that this is a criminal case IN SWITZERLAND need Swiss private banks provide any information on Masefield, or on bank accounts of representatives of the receipients of Saddam Hussein'soil vouchers.Proving criminality to the satisfaction of the Swiss authorities is an immensely difficult task. Most civil or criminal cases are handled within the Canton or Province, and since the major taxpayer of the tiny Canton of Zug is Marc Rich, India should not expect any real cooperation or evidence from that Canton or Switzerland. This is also why merely sending a letter from the MEA or from Justice Pathak to the Government of Switzerland will produce Bofors-like results. Such bogus efforts at finding out the facts have been a tried and tested way to waste time and wear down the demands for evidence.

In this case, the kickbacks engineered by the now defunct Iraqi regime allegedly to Natwar Singh and the Congress were to encourage support for the lifting of sanctions against Iraq. The outright purchase of a dominant Indian political party'spolicy position by foreigners is the issue here. Because the crime occurred in Switzerland, Iraq and perhaps elsewhere, where would the jurisdiction be for any prosecution, and who would bother to prosecute? And technically from the perspective of the minutiae of law, would the alleged crime be restricted to taxes evaded by those involved in an oil-trading deal? Even with the involvement of the CBI,ED and DRI a kickbacks-for-influence scheme is hard to pin down in terms of a specific legal indictment, since the selling of a country'sleading political party'spolicy positions may not technically be a crime, but constitutes a national shame and security risk. In the case of Bofors, following allegations made among others by former prime minister V.P. Singh of kickbacks paid in the large Swedish-India arms deal, the government of India made lukewarm efforts, such as ?writing to the Swiss government.? Various inquiry committees unearthed little. Relentless international pressure on Switzerland for the Swiss police and investigators to get details of financial transactions of Masefield, Marc Rich, and his prot?g'sare the minimum necessary to make any progress. Official Indian government agencies such as the enforcement directorate, the CBI, etc. along with Interpol should be authorised and properly funded to pursue the individuals and companies concerned in Zug. If the Swiss government resists, the Indian Parliament should take strident steps to expose Switzerland'scomplicity in many international financial crimes such as enabling kickbacks and corruption, sanctions-busting or sanctions-distorting, some of which are documented in the Volcker Report. These agencies need to move quickly and the Indian Parliament will have to take the initiative in the matter, as the UPA government will be hesitant to investigate its key component political party (Congess party) . Every refusal by Switzerland to grant access to Masefield traders who are linked to Marc Rich should be publicised widely by the Indian Parliament. The glare of international publicity on Switzerland concerning the criminality of erstwhile Nigerian dictator Sani Abacha led to the unearthing and returning to Nigeria of 730 million US dollars that were looted and stored by the dictator in Swiss banks. Only a similar concerted effort will get to the bottom of the alleged involvement of Congress party oil-vouchers-for-influence kickbacks affair.The question is,whose interests will the Prime Minister of India be faithful to,those of his political boss or those of the billion-plus people of this Republic?