The Iraq Inquiry Report (2009-2016) documents how Tony Blair committed Great Britain to war early in 2002, lying to the United Nations, to Parliament, and to the British people, in order to follow George Bush, who had planned an aggression on Iraq well before September 2001.
Australian Prime Minister John Howard conspired with both reckless adventurers, purported ‘to advise’ both buccaneers, sent troops to Iraq before the war started, then lied to Parliament and to the Australian people. He continues to do so.
Should he and his cabal be charged with war crimes? This, and more, is investigated by Dr George Venturini in this outstanding series.
Australia’s involvement in Iraq (continued)
Following the Iraqi invasion of Kuwait in 1990, the United Nations had imposed a financial and trade embargo on Iraq. It was intended to weaken the Iraqi economy so that Saddam could not build up weapons for further wars. What it did weaken was the health of Iraqi children: it is estimated that about 150 children were starving to death every day because of the embargo. Throughout the 1990s Australian ships, aircraft and troops helped enforce the sanctions which caused widespread starvation in Iraq, leading to an estimated two million deaths. After 1996, once these sanctions were modified to permit profitable ‘Oil-for-food’ deals, the Howard government was among the first in line to collaborate with the Saddam Hussein government, through the AWB, even as it prepared to go to war against Iraq. U.N. Security Council Resolution 661 prevented all states and their nationals from making funds available to Iraq. These sanctions were widely effective, leading to food shortages and international condemnation as the humanitarian crisis became clear.
In response to this, the Oil-for-Food programme was begun. It allowed Iraq to sell oil to the rest of the world, provided the returns from this were kept in a U.N. bank account. This money could then be used by Iraq, with U.N. oversight, to purchase a strict list of humanitarian supplies.
The Oil-for-Food programme however in itself faced criticism, with many alleging that it was too expensive to administer and liable to abuse. The programme was discontinued on the lead-up to the invasion of Iraq.
Since 1948 an Australian statutory authority established in 1939 had been supplying Iraq with wheat. During the Oil-for-Food programme it became the single, largest supplier of humanitarian goods to Iraq. The authority was Australian Wheat Board – AWB. It was a veritable monopoly to control and prevent competition among wheat growers by purchasing and selling at a single price.
Beginning at mid-1999 officials of the cartel were informed that they would have to pay US$12 for each imported tonne, the resulting sum to be passed onto as ‘trucking fee’ to a Jordanian company called Alia. The odd thing was that Alia had no trucks. AWB accepted the condition, increased contract prices and began to send fraudulent information to the Office of the United Nations charged with supervising the enforcement of the sanctions. Under the sanctions regime third parties were prohibited from engaging with the Iraq government unless they had Security Council approval. By having the party exporting goods – the ‘humanitarian’ supplier – to be the one to pay Alia, the Iraqi government was able to disguise the operation. Naturally, that U.N. Office expected that the Department of Foreign Affairs and Trade certify that the contracts were not in breach of the sanctions. The Minister in charge of Foreign Affairs was the Hon. Alexander John Gosse Downer, AC, with the co-operation of the Minister for Trade and Investment who was the Hon. Mark Anthony James Vaile AO – also Deputy Prime Minister. They both complied with numerous requests.
The ‘arrangement’ for paying extra money – by all definitions a bribe – went on for two years. The rate was increased, first by up to 50 per cent, until just before the invasion, when it was between US$45 and US$56 per metric tonne. The Australian government was duty bound not to make any payment to Iraq. The bribes also breached the O.E.C.D Convention on combating bribery of foreign public officials in international business transactions, the Anti-Bribery Convention of 1997.
Under Australian law, all shipments to Iraq were banned unless the Foreign Minister – that is Downer – was “satisfied that permitting the exportation will not infringe the international obligations of Australia.” The contracts were never checked even though an officer of the Department of Foreign Affairs and Trade had rung an alarm bell as to possible breaches of sanctions. Satisfaction was continuously guaranteed – in “the national interest”? During a period of about four years AWB ‘passed on’ to Iraq something like AU$290 million.
In April 2001 an officer of the Department of Foreign Affairs and Trade attached to the United Nations in New York sent a cable informing that AWB had been asked by Iraq to pay ‘port fees’ of US50 cents per tonne as ‘port fees’ and alerting that that was in breach of the U.N. sanctions. The addressees of the cable, Howard, Downer and Vaile would later declare that they had not seen the cable; senior ‘public servants’ in several other departments of the Howard government were instructed to comply.
Howard would later insist that the cable did not actually prove that the government knew illicit payments were being made. In fact, Howard and his ministers had no intention of doing anything which could jeopardise lucrative Australian wheat sales to Iraq: again, “the national interest”?
‘The national interest’ – that is the fixing of the market – was the Howard government’s paramount consideration in joining the Iraq war: securing the commercial, diplomatic and strategic interests of the Australian corporate élite which controlled it. And that could be done, first and foremost, by lining up closely with the United States. It meant taking advantage of the Operation Iraqi Freedom and in the process getting as close as possible to oil rights, construction contracts and agricultural markets. But the United States had similar undeclared interests, and more clout! When they got to Baghdad their XTF-75, Iraq Survey Group and similar organisations got down to work with a view – amongst others – to retrieve and preserve valuable contracts and commercial opportunities. The phony contracts guaranteeing the bribes fell into the hand of the pullulating American organisations.
Documents unearthed in the Iraqi ministries after the invasion had confirmed in detail the bribes paid to the Iraqi government and disguised as “trucking fees”, “port charges”, “after sales service fees” and “surcharges.”
In late May 2003 the Minister for Trade and Investment, Mark Vaile went to the United States at the head of a delegation of executives from ten major Australian construction, engineering, and oil and gas companies for talks with American officials and corporate executives.
Senior executives of the companies: Australian Power and Water, B.H.P., Clough Engineering, Multiplex, Santos, Woodside Petroleum and others, held discussions with American firms awarded reconstruction contracts from USAID, the United States Agency for International Development.
There could be agreement on many fields, but the Howard government could not resist the pressure from Australian farming groups to ensure that the valuable Iraqi market was not lost to the United States. Before the first Gulf war, the United States exported almost one million tonnes of wheat annually to Iraq, but these shipments were cut off under the sanctions imposed on Baghdad. Australian growers then took advantage of the 1996 Oil-for-Food programme to recapture two-thirds of the Iraqi market, worth AU$839 million to Australia in 2002.
Behind the high-sounding words of ‘liberating Iraq’ and ‘exporting democracy’ the reality was brought to light with the establishment of the Coalition Provisional Authority. When words came to action, the American Administration nominated Daniel Gordon Amstutz, a government official and grain-trading industry senior executive of Cargill Corporation, the largest grain exporter in the world, and former president of the North American Grain Export Association, to lead the Authority’s agricultural section.
The Howard government nominated two senior AWB executives, chairman Trevor Flugge and senior executive Michael Long. They had both been compromised in the bribes paid to the Iraqi government. Their view of ‘the national interest’ was to guarantee contracts worth more than US$250 million which had been signed by AWB before the invasion and to keep AWB’s position in the Iraqi wheat market.
The last two contracts that AWB signed before the invasion contained the biggest bribe of all, worth a total of about US$73 million on the basis of US$45.50 per metric tonne for “trucking fees” and another ten percent “surcharge” of the whole value of the contract. In part, these contracts were designed to divert a further US$8.8 million from the U.N.-held funds, to be delivered to Tigris Petroleum, a company linked to B.H.P. and headed by “a thoroughly disreputable man with no commercial morality”. (‘Tigris oil chief a ‘disreputable man’, The Age, 28 November 2006). The company had sent wheat shipments to Iraq in breach of U.N. sanctions in 1995, seeking to secure oil drilling concessions.
In September 2003 a report by the U.S. Defence Contract Audit Agency cited evidence that “illicit surcharges/kickbacks were standard practice for oil-for-food contracts.” The report named Australia and estimated “overpricing” in one AWB contract at nearly US$15 million. The American wheat lobby then launched a letter-writing campaign to President Bush and other politicians, charging that “AWB reaped an additional US$56 million gold mine at the expense of the Iraqi people, on top of their already excessive prices.”
Nevertheless, with the help of the Howard government and its representatives in Baghdad, the AWB managed to salvage its contracts.
In 2004 Iraqi daily Al Mada published a list of 270 persons and entities who were given oil vouchers for helping Saddam Hussein. The report alleged clear violation of the agreements of the Oil-for-Food programme established fourteen years earlier and ending the year before.
In response to this, the United Nations launched an independent inquiry into the programme, headed by former U.S. Federal Reserve Chairman Paul Volcker. Its terms of enquiry were “to collect and examine information relating to the administration and management of the Oil-for-Food Programme … including entities that have entered into contracts with the United Nations or with Iraq under the Programme”.
The final report was released on 27 October 2005. It accused almost half of the companies operating in Iraq during the time of the Oil-for-Food programme to have paid either bribes or illegal surcharges to secure Iraqi business. In special reference to AWB, it stated that “little doubt remains that AWB made large numbers of payments to Alia, and these payments in turn were channelled to the Iraqi regime”. The report said that AWB had covered 90 per cent of the Iraqi market before its practices were questioned in 2005, had sold 6.8 tonnes of wheat to Iraq for US$2.3 billion and had paid US$221.7 million – AU$290 million – in trucking fees. In response to the U.N. Report, on 31 October 2005 the Howard government appointed a Royal Commission into the allegations, headed by the Hon. Terence Cole, QC, a former Judge of Appeal of the New South Wales Supreme Court. The Commission was given terms limited exclusively to AWB. The Commission called to the stand many prominent members of the Government, including Howard, the first Australian prime minister to face a judicial inquiry in more than twenty years. Testimony and documents presented to the Inquiry revealed that in nearly twenty occasions AWB executives had informed government ministers and/or their advisors about the payments. Silence!
Once completed, the Cole Inquiry reported to the Attorney-General on 24 November 2006 and the Attorney tabled the report into the company’s role in the scandal on 27 November 2006. The Inquiry found that, at the insistence of the Iraq government of Saddam Hussein, the AWB agreed to pay “transportation fees” of around AU$290 million. Cole’s findings agreed with the U.N. Report in finding this money was paid, often indirectly, to a Jordanian transportation company, Alia, which kept a small percentage of the fees, and paid the remainder onto the Iraqi government. This breached the sanctions placed on the Iraqi regime. The Cole Inquiry concluded that from mid-1999, AWB had knowingly entered into an arrangement which involved paying bribes to the Iraqi government, in order to retain its business. It cleared the government ministers and bureaucrats from wrongdoing. However, it recommended criminal prosecutions be begun against former AWB executives.
The Inquiry recommended that twelve people be investigated for possible criminal and corporations offences over the scandal. It planned this to occur through a “joint task force comprising the Australian Federal Police, Victoria Police, and the Australian Securities and Investment Commission, A.S.I.C.”. (D. Marr and M. Wilkinson ‘Deceit by the truckload‘, The Sydney Morning Herald, 15 April 2006).
The greatest international scam, the biggest corruption of its kind in Australia’s history resulted in international condemnation and litigation. The United States successfully pursued criminal charges against several citizens and others in its borders, but the Australian criminal investigation into AWB was eventually dropped. Civil charges, however, were initially successful.
On 11 July 2006 North American farmers claimed US$1billion in damages from AWB before a court in Washington DC, alleging that the Australian wheat exporter used bribery and other corrupt activities to corner grain markets. The growers claimed that AWB used the same practices to secure grain sales in other markets in Asia and other countries in the Middle East. The lawsuit was dismissed in March 2007.
In August 2009 the Australian Federal Police dropped the investigation into any criminal actions undertaken by AWB and others in this matter. The reason seemed to be that the chance of obtaining a conviction was limited and “not in the public interest”.
A civil case was brought by shareholders of AWB, and was settled out of court for AU$39.5 million in February 2010. Nobody really knows why.
The Australian Securities and Investments Commission proceeded with several civil cases against six former directors and officers of AWB. Some of them were discontinued on condition that the parties would bear their own costs. A.S.I.C. decided to discontinue the proceedings after forming the view that it was “no longer in the public interest” to pursue its claims. A.S.I.C.’s proceedings against Trevor Flugge, the former Chairman of AWB, and Peter Geary, the former Group General Manager Trading of AWB, were still ongoing early this year.
And what of three cabalistas protecting the racket? Trade’s Vaile now successfully represents foreign business; vapid Downer has been ‘sent home’ as His Excellency The Honourable Alexander Downer, AC, as Australian High Commissioner to the Court of St. James, more closely to consort with ‘the Hanover’, ‘the Hun’, ‘Charlie’, Andy – all of ‘The Firm’; schemer Howard remains to oraculate as Holy Man of the ‘natural party of government’, The Sydney Morning Herald, 15 April 2006).
Tomorrow: Australia’s involvement in Iraq (continued)
Dr. Venturino Giorgio Venturini – ‘George’ devoted some sixty years to study, practice, teach, write and administer law at different places in four continents. In 1975, invited by Attorney-General Lionel Keith Murphy, Q.C., he left a law chair in Chicago to join the Trade Practices Commission in Canberra – to serve the Whitlam Government. In time he witnessed the administration of a law of prohibition as a law of abuse, and documented it in Malpractice, antitrust as an Australian poshlost (Sydney 1980). He may be reached at George.Venturini@bigpond.com.