AWB chief admits sanctions breach

By Sundeep Tucker 
January 19, 2006
The Financial Times
Original Source: http://news.ft.com/cms/s/e65d5490-8890-11da-a05d-0000779e2340.html

The head of the Australian company at the centre of an Iraqi bribes probe yesterday admitted he signed a deal that breached the United Nations' sanctions policy towards Saddam Hussein's regime.
Andrew Lindberg, chief executive of AWB, the country's national wheat exporter, told an official inquiry in Sydney that he agreed to the deal 
during a pre-war visit to Iraq in 2002 aimed at shoring up wheat sales for the prized market.
On a day when counsel to the inquiry presented evidence of AWB's attempts to hide the deal from the UN, Mr Lindberg was also forced to withdraw a misleading statement made by the company to the Australian stock exchange about deals which saw it transfer up to A$300m ($226m, ¬ 186m, £128m) to the Iraqi government as part of the UN's now-discredited oil-for-food programme.
The inquiry, which started this week, is ex
pected to last a month and was set up by the government to investigate claims made by Paul Volcker in November that AWB and two small Australian businesses were among 2,200 companies worldwide that paid kickbacks to Saddam Hussein's regime as part of lucrative contracts.

The deal signed by Mr Lindberg was demanded by the Iraqi government to extract US$2m (¬ 1.65m, £1.13m) from AWB to compensate for wheat shipments which the Iraqi Grain Board (IGB) claimed had beencontaminated with iron powder.
Any settlement should have bee
n brokered by the UN but AWB and the IGB agreed the supplier would inflate the price of a wheat contract and add it to the phantom trucking fees it was paying as kickbacks to the Iraqi government.
Mr Lindberg said he agreed to compensate IGB for its cleaning costs but denied he knew the arrangement would involve adding the costs to trucking fees.
An AWB statement sent to the stock exchange yesterday, signed by Mr Lindberg, attempted to distance the company from the bribes paid to Mr Hussein's government and said: Even though no one, to our knowledge, can be sure where the money went, AWB is deeply concerned that . . it may have been used for non-humanitarian purposes.