Australian premier drawn into Iraq scandal

By Sundeep Tuckerin
January 31, 2006
The Financial Times
Original Source: http://news.ft.com/cms/s/41f33cf4-91fe-11da-bab9-0000779e2340.html

The official investigation into whether Australia's monopoly wheat exporter paid A$300m ($225m, ¬ 186m, £127m) in bribes to Saddam Hussein's regime has unearthed evidence drawing John Howard, prime minister, into the alleged scandal for the first time.
The Commission of Inquiry, which is probing allegations that AWB paid kick
backs to Iraq under the discredited United Nations oil-for-food programme, released a letter written by Mr Howard in which he sought to work closely with the wheat exporter, just weeks before the company's chief executive visited Baghdad to negotiate illicit payments to the Saddam regime.
Mr Howard wrote to Andrew Lindberg, AWB chief executive, in July 2002, as Iraq was threatening to cut imports of wheat from Australia. The letter ended: In view of the importance of the matter, I suggest the government 
and AWB remain in close contact in order that we can jointly attempt to achieve a satisfactory outcome in the longer term.
Soon after, Mr Lindberg went to Iraq accompanied by officials from Australia's Department of Foreign Affairs and Trade. According to evidence presented to the inquiry, it was during this visit that Mr Lindberg agreed to pay $2m (¬ 1.7m, £1.1m) to the Iraqi regime that was to be disguised in an inflated wheat contract.
Mr Howard yesterday denied knowing that AWB was circumventing UN rule
s to clinch the valuable deals.
Speaking on radio, Mr Howard said: I would have been failing in my job as prime minister if I hadn't done everything I could to help AWB maintain and protect the wheat market, because it was one of our best. We didn't have any knowledge of bribes but we did work closely with AWB.
Observers said Mr Howard could struggle to isolate the government from the scandal, given that the inquiry had also just releas
ed other confidential AWB documents and further letters from Mr Howard and Mark Vaile, trade minister, to the company.
Mr Howard established the inquiry in November after a UN investigation found that AWB had paid the bribes to the Saddam regime to secure A$2.3bn in wheat contracts. However, Mr Howard restricted the inquiry's terms of reference to examine allegations of wrongdoing by private companies, not the federal government.
The opposition Labor party yesterday stepped up its demand for the inquiry's terms of reference be broadened.
In further startling evidence, the inquiry also heard yesterday that AWB paid $12m to a Pakistani government official to secure grain sales to Pakistan.
Terence Cole, the head of the inquiry, warned yesterday that he would consider a large number of prospective offences under Australian criminal law when he delivers his report in late March.