By Dr George Venturini
The Howard Government had been strangely and dangerously complacent about the political fallout from the A.W.B. affair.
Long before the Cole Inquiry, senior ministers from the Prime Minister down staunchly defended A.W.B. executives and supported the cartel’s claims that no bribes were paid and that the company was unaware of any possible breaches of United Nations sanctions against Iraq.
In ordinary circumstances, Messrs. Howard, Downer and Vaile might have been called to answer why their officials did not make vigorous efforts to make sure there were no bribes being paid, or if any payments were going directly to Saddam Hussein’s régime rather than to the Iraqi people.
The onus was clearly on the Government to ensure that Australia’s dealings with Iraq were above board, particularly after it was warned as far back as 1999 that there was something dodgy about A.W.B.’s dealings with Iraq.
On the eve of the war against Iraq, one A.W.B. deal which almost fell through was settled at the last minute on terms even more favourable to A.W.B. than before, and yet the Government would have everyone believe that it did not ask A.W.B. how it achieved this coup.
Labor Opposition vowed to pursue the Government for a long time if necessary, to find out what it knew and what actions, if any, it took about the bribes.
Speaking at the National Press Club early in February 2006, Opposition Labor Leader Kim Beazley had promised the “most aggressive parliamentary interrogation” the government had experienced in its decade in office, declaring that the A.W.B. affair typified the “immorality and corruption besetting this government.”
But when Parliament convened, the best that the Labor Party could muster were accusations of “gross negligence” and “failure to investigate” while committing itself to “hold [the government] accountable for the remainder of this Parliament.” The reason the A.L.P. could lay a hand neither on Howard nor any of his ministers lies in its fundamental support for the invasion of Iraq and the continued occupation of the country.
Documents produced at the Inquiry had revealed, at least partially, some of the sordid motives for the war. At the same time the Howard Government was attacking the Saddam Hussein’s régime for refusing to comply with U.N. sanctions – citing this as a reason for military action – the Australian wheat marketing agency was funnelling hundreds of millions of dollars to the Iraqi Government in defiance of U.N. sanctions in order to secure lucrative contracts.
The Australian Department of Foreign Affairs and Trade had approved 41 A.W.B. contracts worth AU$2.29 billion through the Oil-for-Food programme before the U.S.-led invasion of Iraq in 2003. By charging up to US$50 a tonne higher than international market prices, the A.W.B. transferred AU$290 million to the Iraqi régime, thinly camouflaged as trucking fees paid to Jordanian-Iraqi transport company Alia.
The payment of the fees was the result of the efforts of the A.W.B. to protect its revenues from the U.S. wheat lobby, which was determined to establish a stranglehold over the multi-billion Iraqi market. The scandal was therefore intimately bound up with the real motivations for the invasion of Iraq – namely, the drive to secure resources and markets.
But so determined was Labor Leader Beazley to avoid any mention of such matters that in his motion to censure the Howard Government he even went so far as to regurgitate the now proven lies about weapons of mass destruction being the reason for the war. The AU$300 million in bribes paid by the A.W.B. “went to pay for Saddam Hussein’s research effort into weapons of mass destruction. That is absolutely clear,” he declared.
Mr. Beazley also asserted that the money went to arm Iraqi troops and “Fedayeen insurgents” who were “killing and maiming thousands of Americans and thousands of Iraqis” and could “mount attacks on Australian soldiers now serving in Iraq” – a comment that simply served to underscore Labor’s continuing support for the criminal occupation of Iraq, and the brutal suppression of all resistance to the invasion.
Mr. Beazley’s claims were characteristic of Labor’s entire line: to criticise the government from the right. He castigated it for undermining the war effort, damaging the U.S. alliance and harming the “national interest” by not properly investigating the bribery allegations against the A.W.B. from 2000, when complaints were first made by American and Canadian wheat exporters. The Labor leader condemned the government for aiding the “enemy,” warned that the United States would be “completely unforgiving” if the current Inquiry failed to be an adequate one, and criticised Howard, Foreign Minister Downer and Trade Minister Vaile for failing to protect Australia’s reputation, security and other national interests.
But while the Howard Government had little to worry about on the parliamentary front, incriminating evidence had continued to emerge from the official hearings. One email tendered to the Inquiry recorded a meeting between Deputy Prime Minister and National Party Leader, Vaile and two corporate executives linked to the illegal ‘kickbacks’. In the email dated 15 September 2000, Norman Davidson Kelly, a former executive of B.H.P., told A.W.B. rural services manager and A.W.B. director Charles Stott it had been “good to see you” and Vaile in Melbourne the day before.
The email directly implicates Vaile because Davidson Kelly’s company Tigris Petroleum was seeking help from A.W.B. and the government to recover a debt it had inherited from B.H.P. In 1995, B.H.P., which was seeking access to Iraq, sent a wheat shipment to Iraq in breach of U.N. sanctions but could not recover the US$5 million that the Iraqi Government had agreed to pay. In the end, A.W.B. agreed to inflate prices on wheat contracts in 2002 and 2003 to repay the money to Tigris.
In another revealing development, Charles Stott told the Cole Inquiry that he had written to senior D.F.A.T. official, Ms. Jane Drake-Brockman, to obtain approval for the “trucking fees” that A.W.B. was paying to Alia. “Drake-Brockman told me that D.F.A.T. had looked into Alia.” Stott said in his statement. This evidence directly contradicted claims by Foreign Minister Downer that his department knew nothing of the bribes being paid through Alia.
A further damning document, an email from A.W.B. executive Dominic Hogan to senior A.W.B. management in August 2001, showed that A.W.B. knowingly relied on Alia’s close personal ties with Saddam Hussein. Mr. Hogan, one of three A.W.B. whistleblowers testifying at the Inquiry, described how Alia general manager Othman al-Absi raised A.W.B.’s concerns about delays at port with the Iraqi leader. It seems that Saddam Hussein valued the A.W.B. ‘kickbacks’ sufficiently to order an immediate halt to the holdups. “President ordered all outstanding vessels to be discharged and situation fixed.” Hogan’s email recorded. (A.B.C., PM, M. Vincent, ‘14 others knew about Iraq kickbacks: AWB whistleblower’, 6 February 2006, abc.net.au).
The Howard Government had planned for the Cole Inquiry to be a political whitewash, setting terms of reference which prevented it from investigating the role of government ministers and officials. Nevertheless, a mountain of evidence had been placed, from the very first days, before the Inquiry indicating that senior government ministers Howard, Downer and Vaile either knew about the A.W.B. payments or at least tacitly gave ‘the green light’ for such arrangements. Evidence had been produced that questions about the A.W.B.’s conduct had been officially brought to the government’s attention on seven occasions. (M. Head and N. Beams, ‘Australia: Labor attacks Howard from the right over “oil-for-food” scandal,’ www.wsws.org, 6 February 2006).
Opposition foreign affairs spokesman Kevin Rudd put on a great show on the A.B.C. 7:30 Report on 2 February 2006.
“John Howard has written terms of reference for the Cole Commission of Inquiry which enable only the commissioner to make findings and conclusions about the actions of the AWB and to make no findings at all in relation to the actions, knowledge and decisions of the Howard government,” he said.
That is why we have from day one, and continue to call to this day, for John Howard, if he is a person of any integrity… to widen these powers, widen the terms of reference, so that Commissioner Cole can make findings about the government as well.” (‘Always a pleasure doing business with old customers, Saddam, sir,’ crikey.com.au, 3 February 2006).
In saying that Rudd M.P. was aware that Mr. Cole had placed his eyes on another behemoth: B.H.P.
Opposition Leader Kim Beazley called on Prime Minister John Howard yet again to widen the Oil-for-Food Inquiry terms of reference. “One thing we can absolutely not afford as a nation is any more cover-up.” he told reporters in Melbourne. And Mr. Howard was almost saying that he would have been prepared “to consider expanding” the terms of reference if requested by Mr. Cole to do so.
And make that request for broader terms of reference is exactly what Mr. Cole did on 18 February 2006, but not quite in the way expected. Rather than immediately seeking broader scope to look into the Howard Government’s role in the scandal, Mr. Cole was keen to have the scope to investigate another big player which appeared to have been involved in the bribery and sanction busting business – B.H.P., the big Australian.
Howard and his government were not off the hook yet though, with Mr. Cole also noting that he might ask the government to broaden the terms of reference for the probe if he uncovered any evidence of illegal acts by the government or its officers. As a consequence the Prime Minister was playing the confidence card. He said that he would have appeared before the Cole Inquiry if called and that he was confident that no ministers or public servants had known that A.W.B. was paying ’kickbacks’.
“I did not know, Mr. Downer did not know, and on the information that I have … I do not believe that anybody in the departments were told that AWB was paying bribes,” he told reporters on 27 January 2006.
But this was about something much bigger than bribes. It was not just about bad business. It was about sanction busting. Those sanctions were put in place to beat Saddam without the need to drop bombs on Baghdad. The failure of those sanctions was cited as a reason for the invasion of Iraq by George W. Bush’s ‘Coalition of the willing’. (C. Rowley and R. Tonkin, ‘Follow the Big Money: Bad Business with Baghdad’, webdiary.com.au, 19 February 2006).
Where it was going to end up was still far from known, but there was little doubt that the A.W.B. ‘kickbacks’ scam to Saddam Hussein was the biggest scandal to hit the Howard Government since it won office in 1996, if one leaves aside the Reserve Bank of Australia-Securency International scandal, which also ‘matured’ under the Howard Government.
Complacency within the Government about the Cole Inquiry may have been attributed to the fact that it was confident there would have been no ‘paper trail’ leading to Department of Foreign Affairs and Trade officials and Government ministers.
Perhaps the Government thought that it might get mauled by the hearings, but that it could have simply toughed it out as it has with other scandals.
However, the A.W.B. matter was far more serious than previous ministerial skirmishes because it hit the Government on so many levels: Coalition unity, its relationships with agriculture lobbies, its friendship with countries such as the United States and Canada, its international reputation as an honest trader, its justification for the war in Iraq, and its free trade agenda.
But the fact that Deputy Prime Minister Mark Vaile had been named in meetings with kickback officials suggests that the Government was simply determined to ‘tough it out’.
Whatever the outcome for the Government, the long-term ramifications would have been huge.
Some 45,000 wheat farmers were tainted by the affair and, more seriously, their livelihoods were at stake from future wheat deals and, for a large number of them, their shareholdings in the A.W.B.
The questionable dealings by A.W.B. executives, and its practice of ‘kickbacks’ and bribes, were also a massive blow to the Howard Government’s free trade rhetoric. The champions of free trade had been dealt the heaviest hit of all.
A.W.B. executives argued at the Inquiry that ‘kickbacks’ had been part of doing business for decades, and Australia’s foreign competitors were happy to take advantage of the exposure of A.W.B. for their own commercial advantage.
Even leaving these issues aside, the A.W.B. scandal was far more serious than, say, whether Government ministers lied about asylum-seekers throwing children into the water, and failing to correct the claims when Navy officials told them the claims were untrue.
It was beholden on the Howard Government to ensure that A.W.B. was not giving the Saddam Hussein’s régime under-the-counter bribes to win contracts. It was not good enough to pass all the blame onto A.W.B. – that its officials were wittingly or unwittingly guilty of paying bribes to Saddam Hussein.
If no one asked any questions, was it because the Howard Government did not want to know the answers? (‘Cover story: AWB biggest scandal to hit the Howard Government,’ News Weekly, 18 February 2006).
The Cole Inquiry cleared the government ministers and bureaucrats from wrongdoing. However, it recommended criminal prosecutions be begun against former A.W.B. 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).
On 27 November 2006 the Cole 2000-page Report was tabled in Parliament. Mr. Cole recommended that a taskforce be set up to investigate whether criminal charges should be brought against a dozen former A.W.B. executives.
“There is no evidence that any of the prime minister, the minister for foreign affairs, the minister for trade or the minister for agriculture, fisheries and forestry were ever informed about, or otherwise acquired knowledge of, the relevant activities of AWB.”, astonishingly Cole declared in his Report.
He gave no reason whereby it could be so, despite repeated warnings over several years from the United Nations, American, Canadian and Russian officials that A.W.B. was gaining contracts through bribes. The ministers of the Howard Government had simply accepted A.W.B.’s denials without further investigation.
The Cole Report also dismissed the allegation of ministers or government bureaucrats “turning a blind eye” to these repeated warnings about A.W.B.’s illegal activities with the following convoluted explanation: “Events and circumstances do not necessarily build on preceding events or circumstances so as to magnify or render more important the second or later event or circumstance … An event regarded as resolved or satisfactorily explained or answered may not have the necessary currency at the time of the happening of the later event for it to be appropriate to associate the two.”
Despite Cole’s easy disposal of the Howard Government’s role in the A.W.B. wheat-for-bribes affair, evidence presented before his Inquiry had demonstrated that the March 2003 U.S.-British-Australian invasion of Iraq was fundamentally about securing ‘western’ corporations control over Iraq’s markets and oil resources.
For the Americans and the British governments, the invasion and occupation of Iraq was primarily aimed at installing a puppet Iraqi government which would once again open up Iraq’s oil reserves – nationalised by the Baathist régime in 1972 – to be exploited by the big American and British oil corporations – Exxon, Shell, BP and Chevron. Iraq’s oil reserves, among the world’s cheapest to exploit, are still believed to be potentially larger than those of Saudi Arabia.
Protecting A.W.B.’s domination of the Iraqi wheat market from its American corporate competitors was a key factor in the Howard Government’s decision to participate in the U.S.-led invasion.
Documents released by the Cole Inquiry on 23 November 2006 revealed that a year before the U.S.-led invasion of Iraq, Trevor Flugge, then A.W.B.’s chairperson, had been told by John Dauth, then Australia’s U.N. ambassador, that the Howard Government had secretly agreed to participate in a U.S.-led invasion and occupation of Iraq.
Letters released by the Cole Inquiry in January 2006 revealed that Howard had told A.W.B. chief executive Andrew Lindberg in July 2002 that the government and the company had to remain in close contact as they tried to ensure Australia continued to take the lion’s share of Iraq’s wheat contracts under the U.N.’s Oil-for-Food programme.
In what was widely recognised as a pay-off for Australia’s participation in the U.S.-led ‘Coalition of the willing’, two former A.W.B. executives were appointed to the U.S.-dominated Coalition Provisional Authority, which oversaw the initial stages of the occupation. Flugge was appointed the C.P.A.’s “senior adviser” for agriculture, while another former A.W.B. executive, Michael Long, joined the C.P.A. under an AusAID programme.
They ensured that despite the American Government’s appointment of Dan Amstutz, a former senior executive of the U.S. Cargill Corporation – the world’s largest grain exporter and the largest privately held corporation in the United States in terms of revenue – to lead the C.P.A.’s agricultural section, American wheat exporters found it impossible to gain the same access to Iraqi wheat contracts as A.W.B. The American wheat exporters hit back by pressing their government to investigate long-standing allegations of Iraqi-A.W.B. corruption – though the bribes paid by A.W.B. to Saddam Hussein’s régime had all come out of a U.S.-controlled United Nations account which held money derived from Iraqi oil sales.
Amid escalating U.S. denunciations of corrupt dealings under the Oil-for-Food programme, U.N. Secretary-General Kofi Annan was persuaded to set up an inquiry, headed by former US Federal Reserve Board chief Paul Volcker, in April 2004.
As the biggest corporate dishonest schemer, A.W.B. could not escape Volcker’s attention, although in his final report, released in October 2005, as a gesture to Australia’s continuing support for the U.S.-led occupation of Iraq, Volcker tried to shield A.W.B. as much as possible by suggesting that A.W.B. executives might have “unwittingly” paid the ‘kickbacks’ to Saddam Hussein’s régime.
Prime Minister Howard’s decision to establish the Cole Inquiry was part of an effort to head off moves in the United States towards a more thorough investigation of the A.W.B. scandal, with potentially more damaging consequences for the corporation and the government.
An indication of what might be revealed by a more thorough investigation was provided by testimony given to the Cole Inquiry in February 2006 by Mark Emons, A.W.B.’s Middle East sales manager until the middle of 2000. He stated that the Iraq ‘kickbacks’ were part of a ‘culture’ – meaning by that a bad habit! – of regular bribes made by A.W.B. to Third World governments to secure Australian wheat sales.
The Cole Inquiry’s findings came as pressure mounted on Prime Minister Howard to end Australia’s participation in the occupation of Iraq. Two days before Mr. Cole released his Report, Major Peter Tinley, a former senior member of the Australian S.A.S. who served as deputy commander of the Coalition Special Forces Task Group set up to control western Iraq after the U.S.-led invasion, denounced the war as “immoral” and called for the immediate withdrawal of Coalition troops.
In a interview which appeared in The Australian of 25 November 2006 Tinley said: “This war duped the Australian Defence Force and the Australian people in terms of thinking it was in some way legitimate.”
The Australian reported that, “During war planning with US and British special forces at Fort Campbell, Kentucky, in 2002, Mr. Tinley says he never saw any hard intelligence that Saddam Hussein’s regime possessed weapons of mass destruction.”
Australian special forces war planning in Kentucky in 2002? That matches with what Mr. O’Neill wrote in 30 November 2018, and already mentioned at the beginning. (J. O’Neill: ‘New Revelations About Australia and the Iraq War’, johnmenadue.com).
“When I pressed [U.S. intelligence] for more specific imagery or information regarding locations or likely locations of Weapons of Mass Destruction they confessed, off the record, that there had not been any tangible sighting of any W.M.D. or W.M.D. enabling equipment for some years,” Tinley said.
Speaking on A.B.C. TV’s 27 November 2006 Lateline programme, Tinley said: “I think the reasons that we went to war in Iraq were baseless. The government sent us there under the idea of looking for weapons of mass destruction and they gave us the impression that there was a clear and imminent danger of them being used. We now know through our own tactical search on the ground in Iraq and certainly from the Iraq Survey Group, that that was not true at all … The reasons for going to war were wrong. It was morally bankrupt, the whole notion of us being there, so the pretext is wrong. If that’s the case, then we need to take good, hard, courageous decisions now to get out and get out whilst we can. This war will drag us in further and further. It’s a civil war and the power vacuum that was created as a result of this invasion is clearly at the feet of this government.” (‘AWB and Iraq: How Howard waged a war for corporate profit,’ 1 December 2006, Green Left Weekly, 1 December 2006. Issue 693. Iraq).
Continued Thursday – Our mate: Saddam Hussein al-Tikriti (part 5)
Previous instalment – Our mate: Saddam Hussein al-Tikriti (part 3)
Dr. Venturino Giorgio Venturini devoted some seventy years to study, practice, teach, write and administer law at different places in four continents.
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