Australia's monopoly wheat exporter should be prosecuted if investigators find evidence it knowingly paid millions of dollars worth of kickbacks to former Iraqi president Saddam Hussein's regime in Iraq and wrongly claimed tax deductions on the bribes, Treasurer Peter Costello said yesterday.
A government-backed inquiry is examining whether AWB knowingly paid up to US$222 million in bogus transport fees to a Jordanian trucking company partially owned by the Iraqi government.
Investigators say the money was paid to secure lucrative wheat contracts in Iraq and was funneled straight into Saddam's coffers, violating UN sanctions.
AWB chief financial officer Paul Ingleby told the inquiry on Thursday that the company had claimed the inland trucking fees as a tax write-off.
Costello said yesterday that if the fees were indeed for transportation, they would be tax deductible. But he said if the payments were actually bribes, then executives could face prosecution for tax fraud.
"If it was paying a transport company to transport wheat it would be tax deductible, of course it would be," he told ABC radio. "If the commissioner says that wasn't a transport fee, that was a bribe ... then not only are you up for possible prosecution for bribes, but you can't claim it as a tax deduction either."
Last week, the company's managing director, Andrew Lindberg, resigned amid mounting evidence suggesting he and some of his senior colleagues approved and later attempted to cover up AWB's dealings with the Jordanian company, Alia. Several top ministers from Howard's center-right coalition have also come under fire amid claims they knew about, or even approved, AWB's dealings with Alia.
AWB, formerly known as the Australian Wheat Board, was the largest single supplier of humanitarian goods under the UN's oil-for-food program. In 1997-2003, the company sold 6.1 million tonnes of wheat to Iraq and received payments from the UN of more than US$2.3 billion.
"If a company has paid bribes and if a company has circumvented the United Nations oil-for-oil program, that's a disgrace," Costello said.
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