Kickbacks bombshell buried six years (Oil for Food)
Sydney Morning Herald February 4, 2006
Marian Wilkinson, Deborah Snow and Damien Murphy
The Department of Foreign Affairs was put on notice by the UN and the Canadian government six years ago that the wheat exporter AWB was accused of making illicit payments to Saddam Hussein's regime but one of the department's most senior officers failed to detect the scandal.
Documents released by the Cole inquiry into the UN oil-for-food scandal yesterday show that Bronte Moules, now an assistant secretary in the department, was told by the UN in early 2000 of a complaint by the Canadian government that AWB was paying trucking fees to the Iraqi regime in violation of the UN sanctions on Iraq.
Ms Moules, who was then working in Australia's UN mission in New York, passed the complaint back to Canberra with a request for information from AWB. Under the oil-for-food program, AWB was prevented from making payments to the Iraqis.
A former Middle East manager for AWB, Mark Emons, told the inquiry the wheat exporter was at the time making illicit payments to Iraq through a Jordanian trucking company called Alia. But AWB assured Foreign Affairs its contract was above board and sent the document back to the UN for approval.
Terence Cole, QC, who is heading the inquiry, said he would examine the Canadian complaint in detail, confirming yesterday he had the powers to examine and report on the role of the department in the scandal.
This included whether any government official was told about illicit payments made by AWB to the former Iraqi regime. He said, however, that he was not permitted to make findings of any illegality by government officials.
Mr Cole is investigating allegations AWB paid $2.9 million in kickbacks to the Iraqi regime when it sold it wheat worth $2.3 billion under the oil-for-food program.
The details on Ms Moules's role in the Canadian complaint came just a day after another AWB witness said on Thursday he had sent the department a memo about kickbacks in June 2003. The global sales manager for AWB, Michael Long, said he sent the memo from Baghdad when the Government appointed him to the US-led occupation government. The memo and emails concerning it were sent to a Foreign Affairs officer, Zena Armstrong, who sat on the Government's Iraq Task Force. But the department said it did not believe the memo "specifically" referred to AWB kickbacks.
Yesterday both the department and the office of the Foreign Minister, Alexander Downer, refused to say whether any other members of the task force or other senior departmental officers saw the memo.
The Prime Minister, John Howard, said now was not the time to widen the Cole inquiry's terms of reference into the scandal so that it could make findings of illegality about government officials. But the Government would consider doing so if an approach was made. Mr Howard also said he was ready to appear before the inquiry if required.
Australia's leading company was drawn further into the scandal when Mr Cole said he would ask for wider terms of reference to investigate BHP Billiton. This week the inquiry was told the company had made an arrangement to sell wheat to Iraq in 1996 despite explicit advice from Foreign Affairs that the arrangement was in breach of UN sanctions on Iraq.
The Government is certain to agree to the expansion of the Cole inquiry and BHP executives face a grilling over their involvement in the activities in Iraq, including their association with their joint venture partner, Tigris Petroleum.
BHP's chief executive, Chip Goodyear, said yesterday the company was determined to ensure all the facts relating to a 1996 wheat shipment to Iraq - funded by his company - were aired publicly.
Mr Howard said he did not believe anybody in Foreign Affairs had behaved improperly. Nor did he believe that any of the leading players in his Government were aware of the possibility of bribes being involved in the wheat deals. "I did not know," he said. "Mr Downer and [the Trade Minister] Mr Vaile did not know, and on the information that I have and based on the advice, I do not believe that anybody in the departments were told that AWB were paying bribes."
ED: Just five weeks later this statement has been shown before the Cole commision beyond any doubt to have been a lie! Yet still neither PM John Howard nor FM Lord Downer or for that matter the most obviously guilty of the lot Deputy PM Mark Vaile will tender their resignations.
So much for our supposed alligence to the Westminster System of Ministerial Responsibility - what a joke!