A whistleblower testifying at a corruption inquiry yesterday alleged that the world's biggest mining company, BHP Billiton, gave a multi-million-dollar loan to Iraq in 1996 in efforts to gain access to the country's oil.
The testimony came as BHP was for the first time drawn into the Australian government's investigation into alleged corruption under the now discredited UN oil-for-food program in Iraq.
The inquiry was originally called to examine whether Australia's monopoly wheat exporter, AWB Ltd, knowingly paid up to US$222 million in bribes to former Iraqi president Saddam Hussein's regime between 1999-2003 to secure lucrative wheat contracts in Iraq.
However, last week, the inquiry's chief, retired judge Terence Cole, requested the scope of the investigation be widened to include BHP after evidence emerged that the mining giant may have been involved in paying kickbacks to gain access to Iraqi oil.
Attorney General Philip Ruddock granted the permission late on Monday.
Documents before the inquiry show BHP loaned Iraq US$8 million to buy 18,000 tonnes of wheat in 1996. Investigators allege the deal was done to curry favor with Saddam.
BHP then handed the US$8 million debt to a partner company, Tigris Petroleum, which hired AWB to try and recover the money by inflating the price of wheat it was shipping to Iraq under UN oil-for-food program, according to evidence before the inquiry.
The Anglo-Australian mining giant has described its loan as a humanitarian gesture to feed Iraqis who were starving under UN sanctions.
But former AWB marketing manager turned whistle-blower Dominic Hogan testified yesterday that the wheat loan was an attempt by BHP to gain a foothold in the Iraqi oil industry.
"It was really to put their foot in for oil. You can draw that conclusion pretty simply," he said.
Hogan also recalled a May 2001 visit to Baghdad where his boss, Charles Stott, insisted they raise the Tigris matter with Iraqi officials because the debt was due.
Meanwhile, BHP spokeswoman Emma Mead said the company will not comment on individual allegations as the inquiry is ongoing.
Mead referred to a company statement issued last week that said BHP was "committed to investigating the facts and being transparent in the reporting of the result."
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