Politics of the Volcker Report on the Oil-for-Food Program


The Fifth and the Final Report of the Independent Inquiry Commission headed by Paul Anderson Volcker on October 27, has charged allegations against some individuals and companies for their involvement in giving surcharges and kickbacks to the government of Saddam Hussein during 1997-2003. It is important to note at the preliminary stage of discussion that his report became a saucy breakfasts for many leading newspaper in our country than that of the United States. Some of the leading American newspapers had taken a critical stand against the second report, in last March, when Volcker had relieved Kofi Annan of his involvement as one of the beneficiaries in the Oil-for-Food programme for Iraq. Soon it also created no ‘smoking guns’ for his son Kojo who worked for a Swiss firm Cotecna. As a result of this manipulation particularly in the case of his son, two members of the IIC resigned in April 2005.

Discrediting for legitimate protests

At the very beginning, it accused the former Director of the Oil-for-Food programme (OFFP), Benon Sevan of being a beneficiary of illicit payments. Not to forget that Sevan had stood as one of the exceptions from the anti-Iraqi institution to claim that the Oil-for-Food programme, due to its misuse, was catastrophic for Iraqis. This is to recall that other UN officials, chief humanitarian coordinators like Halliday, Hans von Sponeck and others had resigned due to their disappointments with the working and output of the OFFP. It was not difficult for Volcker to allege any one within the OFFP because this institution lacked auditing mechanisms. Those who could have been caught very easily were the majority of the Americans and British agents deployed in the Sanctions Committee 661 for misappropriations and manipulations of the contracts, rejections of many legitimate and needful demands for humanitarian supplies made by the Iraqi government and receiving huge some from favourable contractors.

The Volcker report is completely silent over the role of these agents who had been deliberately deployed to twist the whole objective of providing humanitarian needs against the sale of the oil by the UN. On the contrary, he targetted ‘selective’ actors and other personalities who had denounced the policy of Sanctions against Iraq. In other words, Volcker focused on those individuals, groups and companies who engaged in business with Iraq within and outside the OFFP and some who were sympathetic to the deteriorating humanitarian conditions in Iraq. At the economic level, it discredited indicted companies to restart their economic engagements with post-March 2003 Iraq. It was expected that the Sanctions-free Iraq would have either rewarded for their support, as it happens normally, or to pen them as ‘good forces’ in the history of Sanctions-ridden Iraq. Therefore, it can be said that the strategy of the Volcker committee was to frame target persons and institutions for the following reasons. Like the American-sponsored humiliation nationalist Iraqis, the IIC got involved in character assassination of those communists, socialists, Arabs and statesmen (for example, Vladimir Zhirinovsky of Liberal Democratic Party of Russia, Charles Pasqua, former French Interior Minister, Jean-Bernard Merimee, French UN Ambassador, George Galloway, British M.P., and Natwar Singh, Foreign Minister of India, etc.) to whom the American policy of Sanctions and Occupation violates international law. All of them had sympathy for Sanctions-ridden Iraq. George Galloway was the most notable peace activist of Europe who in fact contributed to the awakening of the Europeans about the violation of human rights in Iraq due to the OFFP.

It would be important to recall that about 5000 delegates had visited Iraq at the time of October 2002 Referendum in Iraq. They included many journalists, members of political parties, intellectuals and scholars from over 50 countries. I remember some of the Indian journalists who glorified the Referendum at that time, now glorify the American-sponsored referendum in Iraq. I remember the former President of Algeria, African leader Kenneth Kaunda, key members of the African National Congress, large cultural troops and journalists from France and European countries had visited Iraq at that time. From India, persons belonging to mainstream political parties were also there. It was the result of massive peoples awakening all over the world that many irrespective of religion, and region had voiced for the liberation of Iraq from Sanctions. This is why, the American preparation for the invasion of Iraq witnessed ever largest protests of over 50 million in early 2003 in over 200 cities all over the world. The Volcker’s exercise is to punish some of those who could be framed loosely under the OFFP. It may be understood as a warning to the ‘humanitarian sympathizers’ and others to abstain from their legitimate protests against injustice.

Victimization of the Foreign Minister of India, Mr. Natwar Singh

The IIC named Natwar Singh, Foreign Minister of India, and 129 Indian firms for their involvement in ‘illicit trade arrangement’ and ‘smuggling’ as non-contractual beneficiary under the OFFP. These two terms are the commonly used terms by the Neo-Cons against the Iraqi government headed by Saddam Hussein. Volcker has also used them in his reports. Impressions created by Indian electronic and print media for a week turned the IIC’s allegations against Natwar Singh into a certified cognizance of crime. Congress allies, mainly the Communists called it ‘bogus’. Natwar Singh also rejected the allegation of kickbacks as invalid. On November 7, the Prime Minister Manmohan Singh took away his portfolio from Natwar Singh. It was really the victory of the Neo-Cons in India where they have not been feeling many difficulties in pursuing their objectives against India’s traditional approach to Iran on the pretext of national interests. One commentator defined national interest as the best way to say ‘yes’ to America.

It is fact that Indian foreign policy makers, under different governments, have accelerated defense and other deals with Israel at the time when the later has been engaged in massive violation of human rights in Occupied Palestinian Territories particularly since September 2000. Palestinian West Bank, Syrian Golan Heights and Lebanese Shiba Farms are still under the military occupation of Israel. It has even violated the Peace Roadmap of 2003 by constructing over 600 kms long wall and Jewish settlements in West Bank where such activities are prohibited by various UN resolutions. We have also seen how the US has occupied Iraq through lies and deceptions. We also know their intentions on Iran, Syria and others. We know how the US is manipulating the IAEA for penalizing Iran. On the contrary, the Congress premier penalized Natwar Singh mainly because of his distinct vision endorsing multilateralism, regional solidarity, cohabitation with neighbours and peaceful world. His approach to the politic in Middle East showed some non-conformism to the American unilateralism. His opposition to ‘yes’ culture in international relations became one of the manor factors for his painful trial.

Let us not forget that the United States Federal Government declined to drop his Secretary of State, Colin Powell and Donald Rumsfeld for their lies and crimes against international law. This was not an allegation but confirmation of their crimes against humanity. This is to recall that Powell had given false videographic images of Saddam’s weapons of mass destruction in the special meeting of the UN Security Council on 5 February 2003. Rumsfeld was the key person behind the horrible case of torture and humiliation of Iraqis in the Abu Ghraib and Guantanamo Bay. Secret prisons are the new additions in his file. Bush did not punish them. He honoured George Tenet, CIA Director, Paul Bremer and military operation chief with the highest civilian awards for Operation Iraqi Freedom. Even, the 9/11 Committee and Senate hearings provided them safety-valves. In our case, Natwar Singh was dropped from his ministerial responsibility just on the allegations made by Volcker who worked for the American imperialists and the UN for a long time.

Illegitimacy of the OFFP and Volcker Committee

Before reaching any conclusion over the allegations made by the IIC, there is a need to know about the forces behind the Volcker committee and the compliance of the UN with the US on the issue of Iraq. It is a fact, based on research and data, that both the UN and the US were engaged in anti-Iraqi (under Saddam Hussein) drive during 1991-March 2003. It includes many UN Security Resolutions, which were instrumental in taking over the sovereignty of Iraq. International law prohibits any action or conspiracy to endanger the sovereignty of any country. The whole exercise of the OFFP was a calculated move by the American-British governments and the UN to control over the supply and sale of Iraqi oil with a promise to deliver all required humanitarian goods to Iraqi people.

UN Security Council Resolution 986 (1995) talked of the OFFP, created it in December 1996 and the first consignment delivered to Iraq in early 1997. This office was mainly guided by the Committee 661 dominated by the Americans and the British agents who created several impediments in the timely delivery of many humanitarian goods to Iraqis. About 90% of the contracts were being put on hold by the 661, which had suspended over 1500 contracts. It is said that it was mainly created to control Iraqi oil and to enrich the Kurds in Northern Iraq. Out of $64.2 billion, the Iraqi government received only $22 billion and the rest were given to Kurds, Kuwaiti victims, UN expenditures, etc. There is another estimate that $100 billion earned by the Iraqi money was kept in the Escrow Account in the National Bank of Paris (BNP) and Iraqi people got only $15 billion worth of humanitarian goods. Owing to meet infectious disease, lack of medicine, lack of drinking water, food, and many other equipments for agriculture, urban and civil needs, etc., Iraqi government took up the initiative to sell oil outside the OFFP as it was not fulfilling Iraqi needs.

Iraq supplied huge quantity of oil to Jordan, Turkey and Syria to get food, medicine and other civilian needs. It is all known to the US. As a sovereign country Iraq had all the right to issue oil coupon vouchers to pro-Iraqi business groups. Iraq had offered India lucrative oil deal at reasonable price and guaranteed volume outside the OFFP too. There were close interactions between Iraqi and Indian ministers and high officials on several issues including oil. Similarly, Jordan was operating its airlines into Iraq. As per the American interpretation of the UN resolution, such activities can be described illegal, but Iraq spread its business deal as a sovereign country for two purposes– to fulfill Iraqi needs and to defy Sanctions. In other words, the whole purpose of the OFFP remained paper-promise. Many Western scholars described Sanctions as genocidal, in which the OFFP was instrumental.

Fact sheet of the Volcker

Paul A Volcker is a central banker and a key player in the game of globalization. He held the post of Chairman, Board of Governors of the US Federal Reserve System, Director of the UN-USA Association, which had earlier denounced the IIC as politically motivated attacks against the credibility of the UN. He headed the North American section of the Rockefeller’s Trilateral Commission, a super elite cabal of 300 international power brokers who practically influence the world. Its members are Dick Cheney, George Bush, Paul D. Wolfowitz, George Soros and others. Identity of the members of the Trilateral Commission is not publicized.

Under the tremendous pressure of the US, Kofi Annan set up an inquiry on 21 April 2004 under Volcker to find out major sources of external financial resources of Saddam Hussein’s regime till March 2003. Same day the UNSC Resolution 1538 asked the Coalition provisional Authority in Iraq and others to cooperate with the IIC. Its terms of reference was to collect and examine information relating to administration and management of the OFFP, including the allegations of fraud and corruption, on the part of the UN personnel, agents and contractors. It was to determine whether procedures established by the organization, including the UNSC and the SC Committee 661 for the processing and approval of contracts, and the monitoring of the sale and delivery of petroleum and petroleum products and purchase and delivery of humanitarian goods were violated. This is to note that the IIC never looked into the misdeeds of the members of the Committee 661 and others. It became selective.

The IIC was created as an independent body outside the UN with 60 members who mostly belonged to the intelligence sphere of the US. Their identities have been kept secret. It is important to note that the IIC’s report is similar to the conclusions made by the US Senate Permanent Sub-committee on Investigation. In its final report, it came out with the report that during 1997-2003, $64 billion worth of oil was sold to 248 companies which brought $34.5 bilion-worth of humanitarian goods to Iraq. Oil surcharges totaling $229 million were paid to Iraqi government for contracts with 140 companies. Humanitarian kickbacks reached $1.5 billion in connection with 2253 firms. Illegal trade arrangements worth $2.6 billion were made from within the OFFP and $10.2 billion from outside the OFFP. There was no external oversight to check or examine the IIC activities.

Addressing on the occasion of receiving the George F. Kennan Award on 21 October 1997, Volcker said, “We are justified, I think, in asking our allies to share the fiscal cost of Operation Desert Storm…. Americans have proved time and again they are a great people in responding to crisis”. Look at the language used by Volcker in his briefing for the Senate Committee on Foreign Relations on 18 October 2005, as a note of appreciation, “As one national official has commented, the Programme (OFFP) was, in effect, a pact with the devil, and the devil had means for manipulating the programme to his ends”. The Volcker Committee was also badly damaged by the controversy over Anna Di Lellio, its Director of Communications and a former U.N. employee. She resigned on Sep­tember 23, 2004, over statements to The Guardian in 2002, in which she implicitly compared Presi­dent Bush to Osama bin Laden:

She said, “I see the major threats coming from ourselves, rather than the east. I find deeply unsettling both the ascendance of George Bush and his puppeteers to the U.S. government, and the mix of self-serving hypocrisy and incompetence prevailing in European governments. I don’t like it that the two nations whose citizenship I hold, Italy and the U.S., have leased their institutions to a couple of families. With defenders like W and Berlusconi, largely unchecked by a sycophantic media, who needs Bin Laden to destroy culture, personal freedom, respect for other human beings, integrity, and the rule of law–”all the things that make our lives worthwhile?

The Di Lellio resignation helped to fuel grow­ing doubt on Capitol Hill regarding the sup­posed independence of the Volcker inquiry and raised major questions regarding the committee’s modus operandi, its staff, its judgment, and its overall effectiveness. Catherine Bertini, Under Secretary-General for Management, resigned on last April 26, who had served as Executive Director for World Food Programme for 10 years. It is important to note that the WFP had raised alarm over the worsening situations in Iraq despite being aided under the OFFP. It was on 14 April 2005, Annan, under fire for his son’s involvement, said that the Iraqi regime profited far more from illicit shipments of oil through Turkey and Jordan, which took place with the almost certain knowledge of Britain and the US, the only countries with the resources to stop the Sanctions busters. He said that the bulk of money that Saddam made came from out of smuggling outside the OFFP, and it was on the American and British watch (The Guardian, 16 April 2005). There are many other counts upon which Volcker and the US can be exposed.


The IIC proved to be a politically motivated initiative sponsored by the Neo-Cons for strengthening their control over the UN by maligning it as an ineffective body without the American hands. It has attempted to discredit those who were part of the protest movement for the liberation of Iraq from Sanctions. It has discouraged some companies, which could have become potential partners in Iraq’s reconstruction in future. It has discredited those UN personnel who had adopted ‘humanitarian’ than ‘American’ approach to Iraqis. In the case of India, the IIC became a playing ground for the American Establishment to pressurise the Indian government to demobilse Natwar Singh for refusing to be a ‘blind-yes-man’ and conformist vis-à-vis American unilateralism.

One of the IIC’s reports that the OFFP succeeded in providing dependable access to electricity, water, etc., contradicts ground realities that existed in Iraq. Survey of the UNESCO, WFP, and other agencies including the statements of UN humanitarian workers and data collected from Iraqi hospitals clearly indicated that the OFFP failed to respond to various basic needs of Iraqis mainly due to the manipulation of the OFFP by its watchmen (US and UK). Iraq should not be accused of kickbacks and surcharges because the Iraqi government wanted to earn more revenues for its growing needs which were being repudiated by the agents sitting in the Committee 661.

Despite the terms of reference of the IIC, it completely ignored the misdeeds of the of the members of the Sanctions Committee 661 who were involved in high level corruption of money and rules manipulation. The IIC also ignored how the revenue of the Iraqi oil was misused by the weapon inspectors and its monitoring agencies in the US, Iraq and Jordan. It also ignored the pilferage of Iraqi money diverted for the development of the Kurdish region and compensation for the Kuwaiti victims of war. It also ignored the forces involved in engulfing a lot of Iraqi money and assets by the agents in the US. This is to recall that Iraq had little control over its own deposits in the Escrow account. It was out of the Iraqi access. It was made completely dependent on the officers (mainly American and British) of Committee 661 for the approval and rejection of Iraqi demands. In other words, Committee 661 became instrumental in seizing economic sovereignty of Iraq. Therefore, Iraq’s initiative to do oil deal and purchase of humanitarian goods outside the OFFP frame was to regain its economic sovereignty.

This is to recall that Iraq was invaded and occupied despite it complied with over 60 UN resolutions. The weapons inspectors of the UN just before the invasion in March 2003 destroyed even its conventional military capability. On the other hand, Israel is not only closest friend of the US despite the fact that it violated over 150 UN resolutions. Israel’s occupation of the West Bank, Syrian Golan Heights and Lebanese Shiba Farms, violate all fundamentals of international law. Its building of long occupying wall in the West Bank and killings of the Palestinians violate even the West sponsored Peace Roadmap. The US and the Europe have continued to cooperate with Israel. It shows that the US attitude towards Iraq is also the result of ‘prejudices’ and ‘hatred’ against Iraq in Middle East while Israel from the same region is allowed to possess over 200 thermonuclear weapons with other acts crimes against humanity. Therefore, involvement of such biased forces directly and indirectly in the institution of the IIC and manufacturing of the reports is bound to denounce the ‘other’ including its sympathizers.