u.s. ban on awb over iraq bribes

US ban on AWB over Iraq bribes
Dennis Shanahan and Caroline Overington
November 15, 2005
THE US Government has punished the former Australian Wheat Board for its role in funnelling $290 million in kickbacks to Saddam Hussein.

In the first official action from the Bush administration over the disclosure of bribes to Saddam under the UN food-for-oil program, AWB has been banned from using US credit programs.

The US action is highly embarrassing for the Howard Government as one of President George W. Bush's staunchest supporters on the invasion of Iraq. John Howard spoke to the President on the weekend and is likely to meet him informally at the APEC meeting in South Korea later this week.

Last night Deputy Prime Minister and Trade Minister Mark Vaile said the Government was "seriously concerned" on behalf of Australian wheat growers.

Mr Vaile is seeking an "urgent clarification" from the US Government for the reasons behind the decision of the Department of Agriculture.









There have been calls in the US from wheat farmers, since the release of the Volcker report into kickbacks and bribes for Saddam's regime, for AWB to be banned from the massive US grain futures market, suspended from access to credit and denied any further aid to sell wheat to Iraq.

Last Friday the US Department of Agriculture advised AWB it was being suspended from the USDA Supplier Credit Guarantee Program.

As the biggest single trader of wheat on the US futures market, AWB's north American arm had the right to use US taxpayer-funded credit guarantees for wheat and other crop deals.

The US Department of Agriculture explicitly told AWB that the suspension was a result of the allegations contained in the Volcker report about the bribes to Saddam's regime.

Yesterday AWB described the action as unjustified and said it would resist the ban.

"We don't believe it is justified," AWB spokesman Peter McBride said.

Mr McBride said AWB would be registering a protest with the US Government and informing Australian government ministers of their position.

The Australian reported on the weekend that the Iraqi Government is demanding hundreds of millions of dollars in compensation from the AWB before allowing future wheat sales. AWB board members and officials have denied any knowledge of payments made to the Iraqi Government front trucking company Alia - which sent $290million over four years in kickbacks directly to Saddam's regime - until they learnt of the allegations in the UN's Volcker inquiry report.

The federal Government has said it was not aware that AWB was making payments to Alia and several former members of the AWB board say they too were in the dark.

Former deputy prime minister Tim Fischer said yesterday he was prepared to testify at the Commission of Inquiry into the wheat sales scandal, even if current government ministers were not. Mr Fischer, who was trade minister when the UN oil-for-food program started in 1996, told The Australian: "If called, of course I'd be willing to testify. I have nothing to hide."

John Howard has restricted the inquiry, to be headed by former NSW judge Terence Cole, to possible wrongdoing by employees of private companies.

Mr Fischer said he didn't believe AWB had "gone down the brown paper bag route".

"There's a big difference between straight-out bribes and what went on here," he said.

"But it certainly shouldn't have happened. I know some big companies - BHP for example - have refused to go down that path (of paying kickbacks) and have lost business as a result. It's always the better option."