us moving to punish awb
US moving to punish AWB By Peter Mitchell in Washington December 12, 2006 THE US is moving on plans to punish AWB for the Iraq kickback scandal, with a powerful senator calling for the wheat company to be banned from trading on the US commodity futures and option markets.
On another front, a US lawyer leading a potential $US1 billion-plus ($1.3bn) class action against AWB by US farmers said it was growing.
The class action began with six farmers from Kansas and Virginia, but publicity about the legal action had resulted in more farmers joining in.
"We continue to have additional farmers contact us," the Washington DC-based lawyer leading the class action, L. Palmer Foret, said today.
"In terms of how many individuals there will be, I don't know at this time, but we expect it to be more than the original six."
Foreign Affairs Minister Alexander Downer, in Washington for two days of meetings with US Vice President Dick Cheney and US Secretary of State Condoleezza Rice, dismissed the calls for AWB and Australia to be punished for the scandal.
Asked what he would say to Mr Cheney if the AWB matter was raised at their meeting, Mr Downer said it would likely not be raised.
Mr Downer said it was expected some Americans would call for AWB and Australia to be punished in an attempt to gain an advantage over Australia in the competitive wheat market.
"The United States is our largest and most aggressive competitor in the international wheat market and not surprisingly we will be standing up for Australia," Mr Downer said.
"Obviously they are going to use every opportunity they can to take markets from Australia."
The class action lawsuit was originally filed in the US Federal Court in July, but it was withdrawn so Mr Foret and his legal team could examine Terence Cole's report into the AWB scandal.
Mr Cole found the AWB paid $290 million in kickbacks to win grain contracts in Saddam Hussein's Iraq.
Mr Foret's original class action lawsuit claimed AWB's actions in Iraq broke US laws and caused economic damage to US farmers by engaging in a "global campaign of racketeering, money laundering, fraud and bribery".
Mr Foret said the lawsuit would be refiled in the next two months.
Senator Coleman's call for AWB and its US affiliate, AWB USA, to have its registration revoked or suspended from the US Commodity Futures Trading Commission (CFTC) in light of the Cole report would have a major impact on Australian wheat farmers.
Senator Coleman sent a letter to Reuben Jeffrey, the chairman of the CFTC, to examine whether the AWB should be penalised.
"In the face of evidence of egregious misconduct, the CFTC should use its authority to revoke or suspend AWB USA's right to participate in our commodity futures and option markets, if it is found to have violated US law," Senator Coleman said.
"To allow AWB USA to continue to participate freely in our markets without determining whether they were in violation of US laws is inexcusable, and I am strongly urging Chairman Jeffrey to examine the appropriateness of revoking or suspending AWB USA's registration with the Commission."
Recently, Senator Coleman introduced legislation to the US Senate to investigate whether US wheat farmers may have been harmed by AWB's corrupt trade practices.
If economic damage is found, the legislation directs the US Trade Representative to go through its trade enforcement procedures to compensate US wheat farmers, either through negotiated settlement or by imposing duties on certain Australian goods.
AWB Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
