Fri, May 19, 2006 - Page 5 News List

AWB admitted it paid Iraqi kickbacks


An inquiry into Iraqi sanctions-busting by Australia's national wheat exporter took a dramatic turn yesterday when a confession the company tried to suppress was released.

The Australian Wheat Board (AWB) broke UN sanctions on Iraq by paying Saddam Hussein's government kickbacks for wheat sales, its former chief admitted in the draft apology letter released yesterday.

The company had previously denied paying bribes to secure wheat contracts under the UN's oil-for-food programme, which allowed Iraq to export oil to buy food and medicine.

But yesterday Terence Cole, head of the commission investigating the allegations released a six-paragraph "draft statement of contrition" which AWB had tried to have suppressed through the courts.

Former managing director Andrew Lindberg said the AWB took a purely "commercial and technical" approach to UN sanctions in order to maximize returns for Australian farmers in UN oil-for-food deals with Iraq.

"AWB accepts that in paying money for inland transportation and after-sales service it paid money to the Iraq government in contravention of the UN sanctions," said the January 1 apology letter released yesterday.

A UN report last year alleged that AWB was one of more than 2,000 firms that had paid kickbacks worth US$1.8 billion to Saddam's government through the UN-managed "oil-for-food" account.

It said AWB had provided the most kickbacks, paying US$222 million via a trucking firm that was a front for Saddam's regime.

The apology letter was tendered to the inquiry in March but had a suppression order placed on it until the court released it yesterday.

It was reportedly drafted last December on the advice of US corporate crisis guru, Peter Sandman, who said that AWB should "over-apologize" for the scandal.

But the inquiry heard that after it was written AWB's chairman Brendan Stewart and other directors decided against releasing it to the public.

Lindberg said in February he was stepping down as managing director as internal AWB documents to the inquiry showed AWB had deliberately hidden the Iraqi payments in "service fees."

The Australian government's credibility has been brought into question with the release of diplomatic cables talking of kickbacks.

Australian Prime Minister John Howard and his foreign and trade ministers have all denied seeing at least 21 diplomatic cables between 2000 and 2004 warning of possible AWB kickbacks.

In his letter, Lindberg said AWB had ignored "warning signs" and failed to challenge the Iraqi payments, which AWB has said it thought were initially approved by the UN.

He blamed the "culture" of AWB at the time for having no proper checks in place and for failing to realize "the potential consequences of these payments."

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