Australias Wheat for Weapons scandal - a bomb due to go off

Commissioner Terence Cole is heading the oil-for-food inquiry in Australia investigating $300 million worth of payments made by wheat exporter Australian Wheat Board (AWB) to the former Iraqi regime in contravention of UN sanctions against Iraq. Dubbed by the Opposition Labor Party as the "wheat-for-weapons" scandal, erupted late October following a report to the U.N. by former chairman of the U.S. Federal Reserve Board Paul A. Volcker that found AWB paid kickbacks totaling US$221.7 million (Total sales of US$2.2 Bn.) to Saddam Hussein during the operation of a United Nations oil-for-food program.SBS Dateline will air some fascinating details tonight about the conduit company Saddam used to get his kickbacks from AWB which might jolt a few people's memory.

Former senior Australian Wheat Board AWB executive Charles Stott said he asked The Department of Foreign Affairs and Trade (DFAT) about Jordanian trucking company Alia Transportation, a trucking company with no trucks, who did no trucking, six years ago, and they sent him approval of the wheat exporter's deals with the bogus firm a few days later.

Curiously The Department says it has no documentary record, and relevant officers have no recollection of being advised about the AWB's use of Alia in the context that Mr Stott outlines.

Iraq's Wheat and Water Transport Authority regularly chased up payments which AWB has maintained it always believed to be legitimate transport payments.

Almost 20 emails sent to an assistant account manager, higher managers and AWB executives reveal an unusual interest by Iraq government departments in payments to Alia Transportation in Jordan.

Account manager Nigel Edmonds-Wilson says he thought the Iraqi departments just wanted to make sure the wheat would be delivered. He could not than explain why a number of emails said wheat ships could not berth until payments were made.

In 2003 AWB tried to get 2.5 million Euros back because the war had stopped a wheat shipment. Alia Transportation said the money was in Iraq but Mr Edmonds-Wilson says he still did not realise Alia was a conduit to the fallen regime.

However cables were earlier sent to the Foreign Office with warnings about Alia Transportation ...Among the warnings was one dated June 6, 2003, from U.S. Army captain Blake Puckett who said that every contract awarded by Iraq under the oil-for-food program "included a kickback to the regime from between 10 and 19 percent."

Australia's Foreign Minister Alexander Downer said to the enquiry on April 11th he was not alerted to that cable.

"I do not have a specific recollection of having received or read this cable or of it otherwise being brought to my attention," Downer wrote in his sworn statement about the cables.

On April 13, Howard told reporters after his appearance at the inquiry that the "government was plainly deceived by AWB" about the kickbacks, and that the Department of Foreign Affairs and Trade "was systematically deceived."

Plainly in an attempt to pre-judge the issue writing a letter to the Wall Street Journal of Tuesday 25th April PM Howard said "While I don't seek to prejudge the outcome, public evidence suggests behavior by some within AWB appears to have been designed to mislead not only my government, but the U.N. as well." He also said the company appeared to have misled Sir Anthony Mason, a former chief justice of the High Court Of Australia, who he described as one of the nation's most senior and respected former judges.

In 2005, Sir Anthony provided an expert opinion to AWB, clearing it of knowingly violating the U.N. sanctions regime against Iraq. "The corruption by Saddam Hussein of the Oil for Food Program was a heinous act of public graft," he continued "Corrupt behavior deserves to be punished and it will be."

The US wheat industry and key senators have expressed anger over AWB's conduct in Iraq, claiming it robbed American farmers of lucrative contracts. AWB has 17.7 million tons of wheat from the late 2005 harvest to sell into the global market, enough to influence a highly competitive global trade of about 110 million tons a year.

The scandal is affecting talks about the AWB marketing monolpoly - US Under Secretary for Farm and Foreign Agriculture Services J.B. Penn said state trading enterprises should be brought under under scrutiny."I think it makes people talk more about the costs and benefits of single desks," Penn told a commodities conference in Canberra.European Commissioner for Agriculture and Rural Development Mariann Fischer Boel said the EU remained committed to removing marketing monopolies from global trade. Denmark's Boel said the EU would continue to push for such monopolies to be dismantled. Meanwhile the Iraqi Trade Board wont deal with the AWB until the enquiry is over.

Due to screen today will be the first television interview, with the managing director of Amman based, Alia Trucking who laims to have had long links with the Australian Trade representative at the Australian Embassy in Jordan from the mid 1990s.

Cole is due to report in June, it is not felt that he will pull any punches. Mr Downer obviously has problems with his memory he evidently shares with Tessa Jowell, Charles Clarke and the late lamented President Nixon.