India to study UN oil-for-food report
(AP)
Updated: 2005-11-07 08:57

The Indian government on Sunday named an envoy to investigate the credibility of claims in a U.N. report that the Indian foreign minister benefited illegally from the oil-for-food humanitarian program in Iraq.

The decision was announced after a seven-hour meeting held by Prime Minister Manmohan Singh, governing Congress party leader Sonia Gandhi and senior Cabinet ministers.

Foreign Minister Natwar Singh, at the center of the controversy, was also summoned to the prime minister's residence for discussions. He has rejected calls by the opposition to resign.

Virendra Dayal, a former U.N. undersecretary general, has been appointed India's special envoy to liaise with the United Nations and its member states to get to the bottom of the matter, a government statement said.

"The government is contemplating other steps as well, which will be announced shortly," it added without elaborating.

Dayal's appointment is clearly aimed at damage control in the wake of the report by the Independent Inquiry Committee, led by former Federal Reserve Chairman Paul Volcker.

The statement said Dayal will "gather relevant materials including those on the verified references in the report regarding the involvement of Indian entities and individuals."

The government statement said Dayal, who also was cabinet of the U.N. secretary general from 1982-92, will be "granted full powers and authority of the government of India to execute the responsibilities entrusted to him."

His appointment would be for an initial term of three months or until the completion of his task, whichever comes earlier.

The Volcker report has accused more than 2,200 companies and prominent politicians worldwide of colluding with Saddam Hussein's regime to bilk the humanitarian oil-for-food program of $1.8 billion in kickbacks and illicit surcharges.

Singh and the Congress party were named by the report as a "non-contractual beneficiary."

Singh has repeatedly denied involvement in the scheme, calling the allegations "baseless and untrue."

He has also challenged Volcker's claim that the committee sent notices to all those named in the report so they could clarify their involvement.

"Neither the Congress (party) nor I ever received any communication," he told The Hindu newspaper in an interview published Sunday.

Singh could not be reached for further comment.

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. Saddam's government chose all the oil buyers and goods suppliers.

The report said countries that opposed U.N. sanctions imposed on Iraq after its 1990 invasion of Kuwait were given priority.