AWB did deceive UN: boss
Caroline Overington
January 18, 2006
AWB managing director Andrew Lindberg admitted yesterday the monopoly wheat exporter had deceived the UN and tried to make quick profits from kickbacks paid to Saddam Hussein's regime.
Mr Lindberg, who gave almost seven hours of testimony to the Cole inquiry into the UN's corrupt oil-for-food program, said he did not discover the deception until after it had happened, and then resolved to do nothing about it.
Mr Lindberg, who earns $800,000 a year at AWB, appeared exasperated by the questions being put to him, and repeatedly answered "I don't know" and "I don't recall".
When shown documents that were prepared for him by members of his staff, he said he had not seen them, did not understand them, or could not recall having read them.
He said he knew "very little" about AWB's dealings with Iraq, despite having visited the country just months before the US-led war, to secure new wheat export contracts worth millions of dollars. AWB sold more than $1.5billion worth of wheat to Iraq under the UN program.
The inquiry's senior counsel, John Agius SC, tendered a document that showed senior AWB managers saw the kickbacks made to Iraq as a chance to turn a quick profit, by hedging on foreign exchange markets.
The document noted that Iraq wanted Australia to add a 10 per cent "service fee" plus a "trucking fee" to its wheat contracts.
The executives were in no doubt that the fees were kickbacks for Saddam, saying: "We believe the increase in trucking fee ... is a mechanism of extracting more dollars from the UN."
It also noted that Iraq wanted the fees paid in German marks, which gave AWB "an opportunity to make a margin on the foreign exchange hedge".
In a moment of clarity on a day when he could otherwise remember very little about one of his company's most lucrative clients, Mr Lindberg, admitted that his company might have made a profit from the kickbacks.
Mr Lindberg was also asked to consider a report that was apparently written for him before he dashed to Baghdad in 2002, in an effort to secure wheat contracts.
The trip took place just weeks after Foreign Minister Alexander Downer told the UN that Australia would support the US in a war against Iraq. Mr Lindberg flew to Baghdad with his former chairman Trevor Flugge and international sales manager Michael Long. Iraqi officials told the delegation that they wanted Australia to inflate the price of their wheat contracts.
The documents noted that AWB was "mindful of the possible implications for AWB on a corporate governance basis" if they inflated the cost of the contracts, to deliver more money to Iraq. It suggested "a number of different methods of repayment of the debt in order to avoid a direct payment to a company with links to the Iraqi regime".
However, it was ultimately decided that the contract price should be inflated.
Shown these documents, Mr Lindberg agreed that it "appears that an amount was added to future wheat contracts".
Commissioner Terence Cole interjected: "A hidden amount?" "I don't know," Mr Lindberg said. "I assume you are correct, that it was added into the price." Asked what he did when it was revealed that the UN had been deceived, Mr Lindberg said: "Well, the oil-for-food program had ceased."
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