India's chatterati is excited about the 'scandal' involving world political leaders, UN officials and oil companies who are reported to have entered into a deal crafted by Saddam Hussein allegedly violating UN sanction rules.

The deal is supposed to have given Saddam Hussein some much needed money which would be in control of the Iraqi regime. This money was realised by Saddam who issued oil contracts to friends, sympathisers and opportunists who went along with the deal either because they perceived the sanctions to be evil because of the toll it was taking of Iraqi children, the aged and the sick or simply because this was an opportunity to make big money from purchase of cheap oil.

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Those that received these oil contracts benefited because Saddam sold the oil at a price lower than that authorised by the UN while imposing a surcharge varying between 10 cents and 30 cents a barrel, the total cost of which was still lower than the official price.

The money realised from the surcharge was deposited in the banks of neighbouring countries from where they made their way into the Central Bank of Iraq. This is an important point because had Saddam swindled the UN for his personal benefit, the money realised from the surcharge may well have been deposited in an anonymous Swiss account or in a personal account anywhere in the world.

But that it went into the Central Bank of Iraq only proves that Saddam wanted some money in the Iraqi treasury that could be controlled by the Iraqi government. So much for the Independent Inquiry Committee and the Volcker report findings.

What indeed were the motives of Natwar Singh and the Congress party in allegedly entering into this deal is anybody's guess. But the key word here is violation of UN laws.

While the intellectual and chattering segments even within the Indian polity readily raced behind that which was being shown to us, there seems to have been a bigger scandal happening in the Oil-For-Food programme parallel to the so-called 'illegal' oil surcharge scandal.

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And the scale of the violation even at first glance seems appalling because while Saddam made money in cents, this swindle is in the billions. As per the web site of the Oil-For-Food programme, a total of $69.4 billion was earned from the 'legal' sale of oil and deposited into the UN escrow account in the Banque Nationale de Paris in New York.

This money as agreed upon by the UN Security Council was meant to be used for food, medicines and other humanitarian purposes for the Iraqi people and children critically affected by hunger, malnutrition and disease caused by the comprehensive economic embargo against Iraq since 1990. This then was the 'legal' purpose of the Oil-For-Food programme -- to allow Iraq to produce and sell oil but the money thus earned will not be given to the Iraqi regime but will be controlled and disbursed by the UN for items that it considered 'humanitarian.'

The pie diagram depicting the use of this money on the web site of the Oil-For-Food programme however tells another tale, a shocking tale. The money deposited into the escrow account to be used for humanitarian purposes in Iraq has been illegally and immorally diverted for purposes far removed from humanitarian.

It is worth recalling here that the Oil-For-Food programme came into effect in December 1996 and functioned until the end of 2002. The programme was officially closed in March 2003 when the US and UK invaded Iraq.

This amount totalling $69.4 billion was realised during this period. Now this diagram tells us that of this total amount of $69.4 billion, only $38.6 billion was used for humanitarian purposes. A cool half a billion dollars was diverted from this amount to pay for the discredited United Nations Monitoring and Verification Commission, UNMOVIC, popularly known as the weapons inspection team -- some of whose members were accused of being pushed into Iraq as spies.

A little over another half a billion dollars was diverted to be paid to 'member states' -- which states, is not specified. 1.1 billion dollars was diverted as operational costs while another 1.3 billion dollars was diverted for oil transportation.

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But the most shocking diversion of money is a whopping $18 billion as 'reparation costs!' Apparently paid to Kuwait as monetary compensation for Iraq's invasion of Kuwait in 1990. Now forget the fact that till date there is no record of any offending country paying its victims or victim countries any reparation except those that were determined by the UN (read US).

Thus except on two occasions when Germany [Images] was asked to pay reparation after the First World War and again in 1990 when the UN Security Council asked Iraq to pay reparation to Kuwait, there is no other record of any offender country paying reparation to victims or victim countries.

If we accept the concept of 'reparation', to be just and fair then the colonising countries of Europe need to pay reparation in today's terms for the loot, plunder and other routinely criminal acts that were a part of colonial administration.

The US has to pay reparation to its own citizens of African origin for the crime of slavery and racial discrimination and reparation to the nations of Africa as a whole for transporting an entire continent to North America as slaves.

And, of course, Pakistan has to pay India reparation for not just the Kargil [Images] war but also for its illegal occupation of large tracts of land in Jammu and Kashmir [Images]. Therefore this shocking diversion of $18 billion from money legally meant for humanitarian purposes is not just shocking but mindblowing for the sheer effrontery of the act.

Even if we agree that the idea of reparation to Kuwait sanctioned by the UN is just and fair, it is highly unjust and unfair, and worse, it was illegal to have mis-utilised the money meant for humanitarian aid as reparation costs.

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It is obvious that the US got control of the money soon after the invasion of Iraq and used it as it saw fit -- as per its whims and fancies. Whether the $18 billion was paid to Kuwait for alleged 'damages' or if the US and its allies took a chunk of it as war costs still needs to be investigated.

Having diverted this money without the consent of the Iraqi regime, the Iraqi people and the international community, there is a pretence of having transferred unspent money amounting to $9.3 billion into another agency, the Development Fund for Iraq, DFI, created to step into the shoes of the Oil-For-Food programme.

There is no transparency on who controls the fund, and to what use this money has been put so far. But this is not all. The best is yet to come. The Independent Inquiry Committee, IIC web site on FAQ 'About The Committee,' question number 7 on how the IIC is funded, cleverly responds thus: '7. How is the IIC funded? Answer -- The IIC initially received USD 4 millions to begin putting its office and staff in place. The budget estimate for the core investigation is USD 30 millions.'

Now this clever. The question was -- 'How is the IIC funded' -- meaning who is funding the IIC. The web site of the IIC cleverly sidesteps the question and responds meaninglessly about how much money may be required. The answer to the question on 'How is the IIC funded' ought to have been 'The United Nations has sanctioned...' because this committee was constituted by the UN in April 2004.

But the pie diagram of the Oil-For-Food money usage says that 30 million dollars was paid to the ICC [Images] from out of the $38.6 billion which the UN says was spent on humanitarian aid. The time line is bizarre here.

If the Oil-For-Food programme was wound down officially in March 2003 and the unspent money from this escrow amount was subsequently transferred to the DFI, and if $38.6 billion, by the UN's own admission had already been spent on food and humanitarian aid, then how can 30 million dollars for the IIC be accounted in the amount supposedly already spent on food?

This only means that while the US deposited this amount for food ostensibly for food and medicines, this small amount too had not been handed over to the Iraqi people in full by way of aid and it was this unspent money from the food account that was used to pay for the IIC which ironically investigated a fraud.

This is the bigger scandal, this the bigger swindle -- that the US takes control of the UN escrow account meant for humanitarian aid and diverts it as it sees fit. The world and India by being mute spectators to this fraud have become accomplices in this crime.

Who will judge the US and the UN now?

Radha Rajan is a Chennai-based analyst. The views expressed are her own.