Another Corruption Whitewash

Bigger than a Brown Paper Bag
Australia’s inquiry into the ‘Oil for Food’ (OFF) scandal finally got underway this week in Sydney. The Cole inquiry heard some damning allegations against the main culprit, AWB Ltd (formerly the Australian Wheat board), the Howard government and Department of Foreign Affairs and Trade.
On the scale of things Australian, this is big time. Simple souls that we are downunder, bribery is measured by receptacle size. That is, small unmarked envelopes, brown paper bags and old football socks.
From first day submissions this scandal is of the "very large suitcase" variety. So we are told at least from the evidence of an AWB employee, who joked in an email that they might need "a very large suitcase" to carry money in. (Cartoon from the Australian Newspaper)

Four weeks of frenzy for what?
The inquiry is to sit for the next four weeks, with the promise of serious and worrying facts spewing forth daily. It will sell newspapers and rivet fascinated viewers to their seats. But will it achieve anything?
Labor's (Opposition) Foreign Affairs spokesman Kevin Rudd says the inquiry is flawed because it will not examine whether the Government had any knowledge of illicit payments to Saddam Hussein's regime.
"John Howard, ever the politician, has made sure that the Commissioner can only investigate the Australian companies - mainly the Wheat Board, and their involvement in Saddam Hussein's regime," he said.
"And [he] forgets the fact or tries to avoid the fact in the terms of reference that he's given to Commissioner Cole, that the Australian government approved the Wheat Board's Operations in Iraq in the first place." Australian ABC

Prosecutions unlikely
In setting up this judicial inquiry, the government excused themselves and public servants by scrutiny, casting the whole weight onto the companies involved.
We might hear of their involvement in international trade bribery and corruption, sort of like ‘friendly fire’, but no action can be taken as a result of revelations.
For other reasons those companies and officials will probably never be prosecuted for any wrongdoings.
Challis Professor of International Law at Sydney University, Don Rothwell, says under Australian law it was not made illegal to breach the relevant UN resolutions. But he still believes there are good reasons for this inquiry to go ahead.
“The Australian Government has a responsibility to implement international law, a responsibility to ensure that Australians are following international law when those Australians are operating within Australia.” Australian ABC

Giving Corruption the Nod
Australia’s political and corporate elites have a long history of avoiding penalty for their misdeeds. While ‘law and order’ tends to drive election campaigns, it is limited in scope to the bottom end of society.
So it not entirely surprising to find another big corporation, once actually known as the “Big Australian”, BHP implicated in this current scandal. BHP started life as a mining company and became a major world steel producer.
In the way of big business, focus has change and BHP has diversified. Senior council assisting the Cole inquiry John Agius QC has revealed that BHP “unaccountably decided in 1995 that it wanted to provide on credit $US5million worth of wheat to Iraq.”
Iraq could not trade for cash because sanctions were in place and the oil-for-food program had not yet begun. In a complicated deal, AWB agreed to provide the wheat in exchange for a letter of credit, or IOU, from Iraq.
The letter could be exchanged for cash or Iraqi oil, with interest, in five years, or as soon as the UN sanctions were lifted. AWB intended to sell its rights to the letter of credit back to BHP for $US5million.

Foreign bribes claimed off tax
Another report, in The Australian Newspaper, says “companies are claiming tax deductions on bribes paid to overseas officials in exchange for speedy licenses and permit approvals.”
The Organisation for Economic Co-operation and Development, in a review of the nation's enforcement of anti-bribery sanctions, has called on the Australian Government to ban tax deductions on "facilitation payments".
According to the report, the tax office had told OECD: "The Australian Tax Office’s (ATO's) current view is that the payment of foreign bribes is not a significant occurrence in Australia. Accordingly the claiming of tax deductions for such payments has not been identified as a risk worthy of specific targeting in the ATO's Compliance Program 2004-05."
The report added that the Government should also consider changing whistleblower legislation to ensure effective protections for public servants who "report suspicions of foreign bribery and consider introducing stronger whistleblower protections for private sector employees".
Apart from awareness-raising measures in the Department of Foreign Affairs and Trade, public servants were not instructed on how to detect bribes.


So there you have it; crooks in high places, sham inquiries, contempt for the law, truly blind justice, legalized corruption… And these are the institutions we are supposed to respect and admire.