When Australia’s Howard government set up the Cole Inquiry, to look into local involvement in the UN’s ‘oil for food’ scandal, they carefully set limitations to protect the government and public service from scrutiny. (see Terms of Reference)Senior Counsel assisting the inquiry, John Agius SC, obviously has other ideas about the execution of justice.
In opening remarks on the second day of the inquiry, Agius assured Commissioner Terence Cole that officials had been "investigating the Department of Foreign Affairs and Trade’s (DFAT) role since the inquiry was announced last November".
With AWB big guns as early witnesses to the inquiry already implicating the government Agius seems will have every opportunity to put the restrictive ‘terms of reference’ aside. The inquiry might not result in any prosecutions (see Another Corruption Whitewash ) but will shine a bright light on the corruption under Howard’s watch.
A timeline of the Oil for Food scandal suggests either incompetence or duplicity by Australian Government ministers and the Department of Foreign Affairs and Trade:
In 1996, Foreign Affairs Minister Alexander Downer welcomed the UN oil-for-food strategy and flagged Australia's desire to provide most of Iraq's wheat requirements.From 1997 to 2003, UN payments of more than $3 billion flowed into the AWB for exporting 6.8 million tonnes of wheat to Iraq. The Department of Foreign Affairs and Trade was responsible for monitoring AWB contracts to ensure they did not infringe UN sanctions against Iraq.
1999 or 2000 DFAT’s Robert Bowker, Australia's current ambassador to Egypt, satisfied himself that no corruption was taking place by telephoning AWB employees who denied there was anything untoward about their billion-dollar deals with Saddam.2000, PM Howard, Vaile, who was trade minister and Foreign Minister Alexander Downer received a copy of a cable from the Australian mission to the United Nations, in January of 2000, which contained a formal warning to the Australian government from the United Nations about what the wheat board was up to. (Volcker Report,Vol 3, Chapter 4, Page 74).The Howard Government sent a cable back to New York explicitly denying allegations concerning the AWB.
In January 2000, Canada raised concerns with the UN that the AWB was using Jordanian front companies to fund interests associated with the Iraqi regime.IN response to an inquiry from a separate contractor in July 2000, the UN office for legal affairs advised them not to deal with the Jordanian company, Alia, because it was funneling money to Saddam.
The UN then questioned an Australian government representative in New York who, after consultation with the AWB said the matter was untrue.
In Senate estimates hearings in November it was revealed DFAT approved a vague, written request from AWB in 2000 to begin dealing with unnamed Jordanian trucking companies.In late 2000, the AWB wrote to inform DFAT that it had contracted with a Jordanian company to truck wheat within Iraq. The AWB failed to mention the name of the company and Volcker raises the question of why Alia was not mentioned in this communication. DFAT responded with approval. What DFAT did not know was that AWB had actually been paying Alia for transport costs since December 1999.
2002 the Minister for Defence, Robert Hill, announced that Australia had taken command of the multinational force in the Persian Gulf under Captain Allan Du Toi. The task force was charged with preventing Saddam defying the United Nations-imposed economic blockage.In July 2002, Trade Minister Mark Vaile issued a press release stating he recognised the need to provide wheat to the Iraqi people, notwithstanding issues with the Iraqi government.
In August 2002, Vaile congratulated a successful AWB delegation to Baghdad, which secured even further wheat exports to Iraq, even as we were counting down to war.In 2003, American lobby group US Wheat Associates made a formal complaint to then US secretary of state Colin Powell that the big prices AWB was receiving for its wheat under oil-for-food was evidence the prices were being boosted by the inclusion of kickbacks.
These oil-for-food contracts, with suddenly inflated prices, were signed by AWB executives and stamped by Australian government officials before going to the UN.
Vaile spoke of our Government being vindicated in its faith that the AWB was successfully managing its commercial dealings with Iraq.
Wheat sale contract documents surfaced which showed a big hike in the prices received by AWB in the months before coalition forces invaded Iraq to topple Saddam's regime in early 2003.In June 2003, the MPs Craig Emerson and Senator Kerry O'Brien issued a press statement calling for the Government to investigate allegations that Australia's wheat sales helped support Saddam Hussein's regime. The Government ignored them.
Some background quotes on the Wheat Wars and AWB
Washington Wheat Commission
Numerous statements by Trade Minister Mark Vaile, before the UN investigation was established, seem to contradict AWB's claim of ignorance about inland transportation. Like when he told an interviewer: "But what has not been recognized, nor reported, is that not only does AWB supply the wheat and sell the wheat to the Iraqis through the UN Oil for Food Program but they also have the unloading and distribution network within Iraq." (Interview on "Sunday Sunrise" October 26, 2003)
Or when Mr. Vaile told U.S. reporters that "...AWB is actually established and invested in a lot of the logistical supply chain within Iraq as well." (Press conference transcript, April 29, 2003).
2005 John Howard said that he had always found the people in AWB to be "a very straight up and down group of people ... I can't, on my knowledge and understanding of the people involved, imagine for a moment that they would have knowingly been involved in anything improper". PM defends AWB over Saddam slush fund - National - smh.com.au
“…the US policy of using food aid as a market development tool also severely calls into question their credentials as a leader of agricultural trade reform.
In fact, with my colleague Trade Minister Mark Vaile, I have raised Australia's concerns over a recently announced three million tonne food aid program directly with US Agriculture Secretary Glickman.
I would like to add that we received tremendous support from Trevor Flugge on this issue.
Let me assure you the Government will not be shy when it comes to expressing our concerns to the US on the scale and implications of its policies.” 2000 Grains Week Speech Federal agricultural Minister Warren Truss
There has been a lot of uncertainty created by Iraq's threat last June to reduce wheat imports from Australia, and then the alleged offer of new contracts, publicised over the weekend.
Attempts by the Iraqi regime to manipulate public opinion in Australia – in this way, should be seen for what it is.
Australia has been a reliable and long-standing supplier of quality wheat to Iraq, including in times of political difference and actual military hostilities.
We recognise the need to ensure a reliable food supply to the Iraqi people, notwithstanding our differences with Saddam's regime.
We were disappointed by the Iraqi threats last year to reduce their wheat imports from Australia.
- Iraq had a bumper wheat harvest in 2001, estimated by the UN at around 2.1 million tonnes – compared to 600,000 tonnes of wheat in 2000, thus they could probably get away with buying less wheat than usual.
- AWB Ltd signed a new contract for wheat last June, under the UN's Oil-for-Food program.
- And, in December, AWB Ltd announced that it had secured further contracts.
UPDATE: Government's role to come under scrutiny
THE Department of Foreign Affairs and Trade will hand over documents, emails, diplomatic cables and other records if it is asked to by the Cole inquiry investigating AWB's allegedly corrupt wheat deals with Iraq.
Meanwhile, ferreting back into the newspaper archives, we find this gem, just to add to any actual government to government communications.
In a letter to Secretary of State Colin Powell, farmer lobby US Wheat Associates alleged that prices won by AWB from
"Earlier OFF [Oil For Food] wheat contracts with prices inflated by millions of dollars per shipload have provided foundation to the rumours that some of the excess may have gone into accounts of Saddam Hussein's family," US Wheat Associates president Alan Tracy wrote in a letter to Mr Powell.
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