AWB 'knew about Iraq kickbacks'
January 16, 2006
CNN
Original Source: http://edition.cnn.com/2006/BUSINESS/01/15/australia.iraq.ap/index.html

SYDNEY, Australia (AP) -- Australia's wheat exporter knowingly provided hundreds of millions of dollars in kickbacks to Saddam Hussein's Iraqi regime and deceived the U.N. about the payments under the oil-for-food program, a lawyer told a government inquiry Monday.
The government opened an inquiry Monday into whether Australia's monopoly wheat exporter -- AWB Ltd, formerly known as the Australian Wheat Board -- made illegal payments to the Iraqi government of Saddam Hussein under the corruption-riddled U.N. program.
The inquiry's lead attorney, John Agius, told the panel in an opening statement that he would present evidence that would show that AWB's most senior executives knew they had paid close to Aust. $300 million ($227 million) for nonexistent trucking services that were funneled directly to Saddam's government.
Evidence also would be presented that AWB was prepared to deceive the U.N. as to the true nature of its contractual arrangement with the IGB (Iraq Grain Board), Agius said.
AWB has consistently denied that it knew the hefty trucking fees paid to a Jordanian company, Alia, were ending up in the dictator's pocket, but Agius rejected that claim.
Evidence will be called to the effect that AWB always knew that Alia was a conduit for the payment of money to Iraq, he told the inquiry.
These matters were always known to AWB to be in breach of the U.N. sanctions (imposed on Iraq), he said. These matters were known at high levels within AWB.
The inquiry was requested by the United Nations, which released a report in October last year showing AWB made a total of $221.7 million in side payments for transportation of the wheat.
A U.N. independent commission, led by former U.S. Federal Reserve Chairman Paul Volcker, found no direct evidence AWB had knowingly given kickbacks. But Volcker found the company's staff should have realized where the money was going.
AWB was the largest single supplier of humanitarian goods under the oil-for-food program.
Agius told the inquiry Monday that investigation of one contract had provided material which seems to make it impossible to support statements that have been made that AWB was not aware that the payments of inland transportation fees to Alia were not simply a method of passing funds to Iraq in breach of U.N. sanctions.
Alia, which turned out to be a front company part-owned by the Iraqi government, never moved any Australian wheat around the country, with the job being performed by Iraqi transport ministry workers, he said.
Agius said it was inconceivable that the AWB could have paid fees of this magnitude over several years and had no knowledge that Alia was not moving a single grain of its wheat, Agius said.
The AWB also sought to distance itself from the payments it was making to Alia by using middlemen to get the money to the Amman-based company, he said.
Commissioner Terence Cole, in an opening statement, said he was charged with deciding whether the AWB and two other small Australian companies had broken any domestic laws in their oil-for-food dealings.
Cole cannot file any charges, but can recommend officials be prosecuted.