Australian PM Denies Knowledge of Oil-for-Food Bribery Claims

By Patrick Goodenough | July 7, 2008 | 8:17 PM EDT

( - Called to answer questions about alleged bribes paid by Australia's wheat export body to the regime of Saddam Hussein, Prime Minister John Howard on Thursday become the country's first political leader to testify before a commission of inquiry in more than two decades.

Howard's testimony is the culmination of an inquiry launched last year at his behest, following the release of a report into corruption in the U.N.'s Iraq oil-for-food program.

The Volcker Report charged that Australian wheat exporter AWB Ltd. had paid more than $200 million in "kickbacks" to Baghdad while supplying wheat to Iraq under the U.N. program, which allowed Iraq to sell specified quantities of oil in return for food and medicines.

The program aimed to offset the effect of sanctions -- imposed after Iraq invaded Kuwait in 1990 -- on ordinary Iraqis, but it turned out to have been riddled with corruption.

AWB stands accused of paying bribes to Saddam, disguised as fees for transporting its wheat shipments inside Iraq. AWB executives have denied the allegations, saying they did not know the amounts paid were not legitimate transport fees.

Headed by a retired senior judge, the independent Cole Inquiry set up by Canberra is trying to get to the bottom of the claims. During its hearings questions arose about what role, if any, was played by the government, which controlled AWB before it was privatized in mid-1999.

Judge Terence Cole heard allegations that concerns about the alleged bribery had been brought to the government's attention.

Those claims led to Australia's foreign and trade ministers appearing before the inquiry earlier this week, and Howard on Thursday.

During his 50-minute testimony in Sydney, Howard said he had not been alerted to warnings that AWB was allegedly paying kickbacks.

A written sworn statement he gave to the commission said that the prime minister was sent 68,000 cables each year from the foreign affairs and trade ministry. They were vetted by four senior advisors and only those deemed important enough were brought to his attention.

"I believe that the contents of the relevant cables were not brought to my attention at any time during the relevant period," Howard said.

One of the cables the commission is interested in came from an Australian official in New York in 2000, and contained a warning that the Canadian government had complained to the U.N. about AWB possibly being involved in oil-for-food corruption.

Howard said advisors would likely have dismissed the cable as baseless.

"There was absolutely no belief anywhere in the government at that time that AWB was anything other than a company of great reputation," he said under questioning, adding later "it never crossed my mind that it would have behaved corruptly."

Howard has come under heavy fire from opposition parties over the AWB affair.

Speaking outside the heavily-secured commission venue, Howard stressed that the inquiry had been initiated by his government, not the opposition nor the media.

Howard, whose appearance followed that of Trade Minister Mark Vaile and Foreign Minister Alexander Downer earlier in the week, showed that the government was being transparent and accountable, he told reporters.

He also said that Australia had been "alone" in establishing a public inquiry with the power to compel the handover of documents.

The Volcker inquiry found that some 2,000 companies around the world had been involved in oil-for-food corruption, with AWB allegedly having paid the biggest bribes.

The official opposition Labor Party wants the government to expand the Cole inquiry.

It has questioned whether government ministers did enough to ensure that Australia was meeting its international obligations with regard to Iraq and the sanctions regime.

The Labor Party strongly opposed the U.S.-led war that toppled Saddam in 2003, and Australia's military involvement in it.

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Patrick Goodenough
Patrick Goodenough
Spencer Journalism Fellow