The Volcker report, which last Thursday made public details of an elaborate scam devised by the Saddam Hussein regime, has sent shockwaves throughout the world.

From Germany [Images], France [Images] England [Images] to Russia [Images], India and Australia, the report by the Independent Inquiry Committee headed by Paul A Volcker names almost 2,400 firms and individuals who paid the Saddam regime money under the guise of the United Nations' Oil for food Programme.

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If you are wondering just what the scam is and why the report is so damning, read on:

When was the Independent Inquiry Committee set up?

UN Secretary General Kofi Annan appointed the Committee on April 21, 2004, to investigate allegations of corruption in the Oil for Food Programme. Allegations had sprung up in various publications, including Baghdad's al-Mada newspaper, which published names of 270 individuals and companies.

Who were on the Committee?

Paul A Volcker, former chairman of US Federal Reserve, headed the Committee, which also included South Africa's Justice Richard Goldstone and Switzerland's [Images] Mark Pieth, chairman of the Working Group on Bribery in International Transactions at the Organisation for Economic Cooperation and Development.

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What did the Committee find?

The Committee found that Saddam's regime had devised a scheme to fox the UN and pilfer money for itself from the Oil for Food Programme. Volcker's Committee named the firms who had paid Saddam's regime money � knowingly and unknowingly � as part of the humanitarian UN Programme. The number of firms who had paid Saddam was more than half the number of firms that had dealings with Iraq under the programme.

What was the Oil for Food Programme?

After Iraq invaded neighbouring Kuwait in 1990, the UN imposed economic sanctions on the country. In the face of a global appeal to save the people of Iraq from bearing the brunt of the sanctions on its dictatorial regime, the UN started the Oil for Food Programme in December 1996.

Under the Programme, Iraq could sell its oil at UN-prescribed prices in exchange of humanitarian goods. Under the Programme, Iraq sold $64.2 billion worth of oil to 248 companies and 3,614 firms sold $34.5 billion worth of humanitarian goods to Baghdad. The programme ended in 2003.

How did Saddam fool the UN?

Baghdad was allowed the power of choosing who it sold the oil to, a loophole which the Saddam regime exploited to garner $1.8 billion for itself.

The dictator gifted oil vouchers to supporters across the globe. Beneficiaries also included vocal anti-sanctions politicians. The vouchers could be sold to companies at higher prices, a part of which found its way into Iraqi accounts.

In the invoices for the oil sales that were presented to the UN, the illegal payments were disguised as 'after-sales service fees' or 'inland transportation fees'.

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Did all companies and individuals pay Saddam knowingly?

The Volcker report says some companies that were dealing through agents and middlemen might not have known they were bribing the Saddam regime. In the case of individuals, however, there was no such unknowing bribing.

Which companies paid Saddam?

The list of nearly 2,400 firms that paid up to Saddam � knowingly or unknowingly � reads like a who's who of global business. It includes British pharma giant GlaxoSmithKline [Get Quote], Germany's automobile behemoth DaimlerChrylser, Swedish carmaker Volvo, German engineering company Siemens and the Australian Wheat Board.

One hundred and twenty nine Indian firms -- including Ajanta Pharma [Get Quote], Alembic Chemicals, Godrej [Get Quote] Boyce, Kirloskar Brothers [Get Quote], Tata International and V N Enterprises � are also mentioned in the report.

The Committee asked all the companies in the list to explain the payments. Virtually none of the Indian firms replied, says the Volcker report.

Who are the politicians named in the report?

A number of politicians figure in the report as beneficiaries of Saddam Hussein's largesse. They include Vladimir Zhirinovsky, head of the Liberal Democratic Party in Russia, former French interior minister Charles Pasqua, French UN Ambassador Jean-Bernard Merimee, British member of Parliament George Galloway and Indian External Affairs Minister Natwar Singh.

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How do politicians fit in the scheme of the scam?

The Volcker report says Iraq 'selected oil recipients in order to influence foreign policy and international public opinion in its favour.' Thus the oil vouchers went to prominent pro-Iraq global voices, who the report classifies as 'non-contractual beneficiaries'.

These 'non-contractual beneficiaries', in turn, sold the vouchers to oil companies who bought oil at UN-prescribed low prices.

Who are the 'non-contractual beneficiaries' from India?

Jammu and Kashmir [Images] Panther's Party leader Bhim Singh, the Congress party, Reliance [Get Quote] and  Natwar Singh are the four 'non-contractual beneficiaries' from India named in the Volcker report.

The report says Natwar Singh and the Congress party sold their oil vouchers to a Swiss oil trading company, Masefield AG.

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What has been the global reaction to the report?

Most of the companies named have said they had no knowledge that their money was going to Saddam's regime � an argument which the report concedes as possible.

The individuals and organisations named as non-contractual beneficiaries have questioned the evidence and demanded that Volcker's Independent Inquiry Committee reveal its sources. Some have also alleged that the report is a witch-hunt for critics of the Iraq war.

Also see
'STC did not supply foodgrains to Iraq'