Australian hit for diverting oil-food probe
By David R. Sands
February 2, 2006
The Washington Times
Original Source: http://www.washingtontimes.com/world/20060201-115916-4732r.htm


Australia's ambassador last fall lobbied to head off a congressional probe into kickbacks paid by the country's wheat-exporting board to Iraqi dictator Saddam Hussein under the U.N. oil-for-food program, the Senate's lead investigator into the scandal charged. 

    Sen. Norm Coleman, Minnesota Republican and chairman of the Homeland Security and Governmental Affairs permanent subcommittee on investigations, has written letters to former Australian Ambassador Michael Thawley and current envoy Dennis Richardson complaining that new evidence directly contradicts Mr. Thawley's assurances in an October 2004 meeting with the lawmaker about the Iraqi dealings of the Australian Wheat Board. 

    The U.N. oil-for-food probe, headed by former Federal Reserve Board Chairman Paul Volcker, concluded that the AWB, as the export board is now known, paid about $294 million in kickbacks and bribes to Saddam to secure wheat sales worth $2.3 billion under the U.N. humanitarian program. 

    An independent inquiry under way in Canberra has heard testimony that the government of Prime Minister John Howard had far more extensive knowledge of questionable deals than previously known. 

    I am deeply troubled about [Ambassador] Thawley's representations to me in light of the evidence concerning AWB's transactions uncovered by the Volcker panel and the Australian probe, Mr. Coleman said in a Jan. 31 letter to Mr. Richardson. 

    Mr. Coleman said that he was particularly disturbed that new evidence suggests that despite [Ambassador] Thawley's representations to me, officials in the Ministry of Foreign Affairs were aware of and complicit in the payments of the illegal kickbacks. 

    Mr. Coleman and Senate investigators say Mr. Thawley's meeting helped persuade them to focus the subcommittee's limited time and resources elsewhere. 

    A spokesman for the Australian Embassy confirmed yesterday that the Coleman letter had been received and that diplomats were still preparing a reply. 

    But Mr. Howard and Foreign Minister Alexander Downer, under fire back home over the AWB revelations, strongly defended Mr. Thawley. 

    Mr. Howard insisted this week that his government had no knowledge of Iraqi bribes and added he feared that U.S. wheat growers might use the scandal to steal a market from Australian rivals. 

    Let's not kid ourselves -- the American wheat industry has done everything it possibly can to criticize the Australian wheat industry in order to take the Iraqi wheat market from us, Mr. Howard told an Australian television interviewer. 

    Mr. Downer said his government cooperated fully with the Volcker probe, but doubted it could get a fair hearing before the Senate panel. 

    The United States is our principal competitor in the international wheat trade, so we were deeply concerned that the AWB would be unfairly treated by what is, in effect, a commercial competitor, he said in a separate interview yesterday. 

    Mr. Thawley's intervention was entirely appropriate and right, he added. And if the same circumstances occurred again, I would do the same thing. 

    In fact, Mr. Coleman, along with Sen. Tom Harkin, Iowa Democrat, and five other senators from major wheat-growing states have written to Agriculture Secretary Mike Johanns, asking that AWB's U.S. affiliate be dropped from a government export-credit-guarantee program while 
the oil-for-food probe continues. 

    But the Australian probe has proven a major political headache for the Howard government, which was a strong supporter of the U.S.-led war in Iraq in 2003. 

    Despite denials by AWB officials, the inquiry has uncovered evidence of trucking fees and other payments that investigators say were clearly meant for Saddam's coffers. 

    Kim Beazley, head of the opposition Labor Party, said the probe should demand testimony from Mr. Howard and other top officials. 

    Mr. Thawley was sent to shut down a U.S. Senate inquiry into the wheat-for-weapons scandal just before the 2004 Australian election, Mr. Beazley said. What does that tell you about what they are hiding?