The US Senate was drawn into a growing controversy over the Australian government's role in a scandal about bribes paid to former Iraqi president Saddam Hussein's government yesterday.
Canberra admitted that it had lobbied Washington to drop an investigation into allegations that Australian national wheat exporter AWB paid hundreds of millions of dollars in bribes to Iraq to secure sales worth US$2.3 billion.
Australia's ambassador to the US met the chairman of a Senate committee in late 2004 and "argued strongly" against plans to probe AWB, formerly the government-run Australian Wheat Board, Foreign Minister Alexander Downer said.
The government was worried that the inquiry into AWB's role in the UN oil-for-food scandal would be used by US wheat exporters -- the country's biggest international competitors -- to damage its trade with Iraq, he said.
The planned probe was dropped after the government's representations, through the then-ambassador Michael Thawley, to US Senator Norm Coleman, chairman of a Senate investigations committee.
Seven US senators, all from major farm states, have now joined calls to ban AWB's US subsidiary from export credit programs, the Australian Broadcasting Corp (ABC) reported yesterday.
Although the ban would not affect AWB's Australian operations or exports, it would prevent AWB in the US from accessing US government credit to export American commodities.
An aide to one of the seven senators, Senator Tom Harkin, said they would like more information on the scandal, which is being probed by an Australian commission of inquiry that began work last month.
The inquiry "has raised questions about what the Australian government's role may or may not have been, and we're just looking to get a better handle on that," aide David Townsend told ABC radio.
The US Wheat Associates lobby group is also calling for Congress to look at whether the US can suspend AWB from futures trading, the radio said.
Downer said Canberra had been "concerned that an American congressional or senate inquiry would be an inquiry driven at least substantially by American commercial interests."
He said Australia preferred that the allegations be investigated by the UN, which would be more impartial.
A UN probe resulted in a report last year accusing AWB of paying some US$220 million in bribes to Iraq to secure wheat contracts during the 1996-2003 oil-for-food program.
These were the biggest payments made by any of the more than 2,000 companies worldwide which the UN report implicated in the scandal.
At the UN's request, Australian Prime Minister John Howard appointed a commission of inquiry into the allegations under former judge Terry Cole.
Senior AWB executives have denied knowingly paying bribes, saying they believed the cash was for transport fees, and have told the inquiry that their deals with Iraq were approved by the government.
This has led both Howard and Downer to deny personal knowledge of any corruption, while the opposition Labor Party has demanded that the inquiry be widened to include the government's possible role in the scandal.
Labor's foreign affairs spokesman Kevin Rudd said Thawley's actions were part of a massive government cover-up.
"This is an extraordinary new development, a cover-up of the highest order," he said.
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