- The Washington Times - Monday, November 7, 2005

NEW DELHI — India’s foreign minister was stripped of his post yesterday over accusations that he benefited illegally from the U.N. oil-for-food program in Iraq, becoming the first political casualty of an independent report that revealed massive corruption in the effort to help Iraqis suffering under sanctions.

Prime Minister Manmohan Singh, who summoned Foreign Minister Natwar Singh for an hourlong meeting at his residence, demoted him to minister without portfolio, the prime minister’s office said.

Natwar Singh left the prime minister’s residence without speaking to reporters, waving before getting into his car. He had rejected calls for his resignation, insisting that he received no favors or bribes from Saddam Hussein’s government or benefited from the $64 billion oil-for-food program.

The independent inquiry, headed by former Federal Reserve Chairman Paul Volcker, has accused more than 2,200 companies and prominent politicians worldwide of colluding with Saddam’s regime to bilk the oil-for-food program of $1.8 billion in kickbacks and illicit surcharges.

It named Natwar Singh and India’s ruling Congress party as a “non-contractual beneficiary.”

Benon Sevan, the program’s executive director, is being investigated for purportedly accepting kickbacks, and French judges are investigating 10 French officials, including former U.N. Ambassador Jean-Bernard Merimee, and business leaders under suspicion.

Mr. Singh’s demotion was the first government action taken against an acting official since the independent report was released two weeks ago.

After initially treating the report with skepticism, the Indian government ordered a judicial investigation into the claims to be led by former Indian Chief Justice R.S. Pathak.

Late Sunday, the government also named an envoy to investigate the credibility of the Volcker report, indicating that it was not entirely convinced about its veracity.

The television channel NDTV reported that Mr. Singh will get his portfolio back if the Pathak investigation clears him. The prime minister will hold the foreign minister’s portfolio as well.

Sanjaya Baru, the prime minister’s spokesman, denied the investigation was aimed at deflecting pressure from the prime minister, who is facing opposition calls for resignation.

The Volcker report has become a major embarrassment for Manmohan Singh, a 74-year-old former diplomat who has led India’s campaign for a permanent seat on the U.N. Security Council.

Also yesterday, the Congress party said it had written to U.N. Secretary-General Kofi Annan seeking “all such documents on the basis of which the Volcker committee made the allegations.”

The oil-for-food program allowed Iraq to sell limited and then unlimited quantities of oil, as long as most of the money was used to buy humanitarian goods to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam’s invasion of Kuwait in 1990. Saddam’s government chose all the oil buyers and goods suppliers.

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