In August 1990, Iraq’s invasion of Kuwait triggered global condemnation and the first Gulf War. In response, the United Nations Security Council (UNSC) imposed strict sanctions on Iraq in 1991, including a ban on oil exports. These measures, designed to cripple Saddam Hussein’s military funding, inadvertently devastated Iraq’s civilian population, plunging the nation into economic and humanitarian crises.
To address this, the UN launched the Oil-for-Food Program (OFFP) in 1996, allowing Iraq to sell oil under strict conditions. Proceeds from these sales were placed in escrow accounts, managed by third parties, and exclusively used to purchase food, medicine, and other humanitarian goods. Despite its noble intent, the program became a breeding ground for widespread corruption, with global implications that would later implicate India’s Congress Party and senior leader Natwar Singh.
The Volcker Report
The scandal came to light in 2004 when Iraq’s Al Mada newspaper published a list of individuals and entities allegedly involved in illicit oil transactions under the OFFP. In response, UN Secretary-General Kofi Annan appointed an investigative committee led by Paul Volcker, former chairman of the US Federal Reserve.
The 2005 Volcker Report uncovered systemic corruption, naming over 2,000 beneficiaries worldwide, including governments, private companies, and individuals. Among the names were India’s Congress Party and Natwar Singh, then India’s External Affairs Minister.
According to the Volcker Report, both the Congress Party and Natwar Singh were “non-contractual beneficiaries” of illegal oil allocations by Saddam Hussein’s regime. The report accused Natwar Singh of receiving 4 million barrels of oil, while the Congress Party was allocated another 4 million barrels.
The transactions allegedly began in 2001, during a visit to Iraq by Natwar Singh, his son, and other Congress leaders, including P. Shiv Shankar, A.R. Antulay, and Delhi-based exporter Andaleeb Sehgal. Sehgal’s company, Hamdan Exports, was accused of facilitating the sale of oil to a Swiss firm on the black market, with the profits benefiting Natwar Singh and the Congress Party.
Of the 8 million barrels allocated, 3 million were reportedly lifted:
- 2 million barrels from Natwar Singh’s share.
- 1 million barrels from Congress’s allocation.
The Fallout in 2005
The release of the Volcker Report created a political firestorm in India. Natwar Singh, then a senior member of the UPA government, was forced to resign from his ministerial post amid mounting pressure. In an attempt to deflect blame, the UPA government established the R.S. Pathak Committee to investigate the allegations.
While the Pathak Committee implicated Natwar Singh’s associates, it gave the Congress Party a clean chit—a conclusion many viewed as politically motivated. Natwar Singh vehemently denied the allegations, accusing Sonia Gandhi of conspiring against him to protect the party’s image.
A Tale of Two Reports: Volcker vs. Pathak
The Volcker Report, a UN-backed investigation with global credibility, explicitly named the Congress Party as a beneficiary of Saddam’s illicit oil allocations. In stark contrast, the Indian government’s Pathak Committee cleared Congress of wrongdoing, fueling suspicions of a cover-up.
Key questions remain unanswered:
Why Did Congress Dismiss the Volcker Report?
Congress, in recent controversies, has relied on external investigations such as the Hindenburg Report to demand accountability. However, in 2005, the party dismissed the globally respected Volcker Report, branding it biased and politically motivated. This contradiction raises questions about the party’s selective approach to external investigations. Why did Congress trust a foreign report in one instance but reject another when its own reputation was at stake?
Why Wasn’t a Joint Parliamentary Committee (JPC) Formed?
Congress has been a vocal proponent of Joint Parliamentary Committees (JPCs) to investigate allegations of corruption. Yet, when the oil-for-food scandal broke, the party avoided forming a JPC. A JPC could have ensured a transparent and bipartisan investigation, addressing public concerns about political shielding. The lack of such a mechanism further fuels suspicions of a cover-up.
Why Is the Pathak Committee Report Still Unpublished?
Transparency demands that the findings of the R.S. Pathak Committee be made public. However, nearly two decades later, the report remains under wraps. This secrecy only deepens doubts about the credibility of the investigation and whether it was tailored to protect Congress from global embarrassment.
The oil-for-food scandal remains a black mark on Congress’s legacy. Allegations of corruption at an international level, coupled with the perception of political shielding, have tarnished the party’s credibility. Meanwhile, Natwar Singh, once a trusted Congress stalwart, continues to claim he was scapegoated to save the party’s reputation.
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