US urges explanation for alleged AWB bribes

By Ray Marcelo 
February 2, 2006
The Financial Times
Original Source: http://news.ft.com/cms/s/29cbcf82-93c1-11da-82ea-0000779e2340.html

Australia’s government came under fresh pressure on Thursday as US senators demanded an explanation for its role in an alleged A$300m bribe to help secure Australian wheat sales to Saddam Hussein’s regime.
Several Washington lawmakers have questioned how much Canberra knew about the illicit payments by AWB, Australia’s monopoly wheat exporter, under the scandal-plagued United Nations Iraq oil-for-food programme.
Norm Coleman, a US Republican senator who chairs a committee investigating illicit payments to the Iraqi regime, has revealed he wrote to Australia’s Washington envoy demanding more information.
Mr Coleman said he was disturbed to hear of evidence suggesting Canberra was “aware of and complicit in the payments of illegal kickbacks” to Iraq presented during an inquiry into AWB’s conduct.
An investigation underway in Australia has been told AWB executives knew wheat contracts to Iraq were being inflated but that they had refused to describe the higher payments as bribes.
John Howard, Australia’s prime minister, also denied knowing that AWB had paid bribes or circumvented UN rules to clinch wheat deals.
But Mr Coleman, who represents the US wheat-belt state of Minnesota, has demanded Canberra explain why its former Washington envoy in 2004 had “unequivocally dismissed'” allegations that AWB had paid bribes to the Iraq regime.
It is understood Australian diplomats in Washington were on Thursday preparing to answer Mr Coleman’s demands, which follow recent moves by Democrat senators to suspend AWB from a US export credit scheme.
But neither Mr Howard nor Alexander Downer, foreign minister, would discuss Australia’s response. Mr Howard has refused to permit the AWB inquiry to widen its investigation to include the role of ministers or officials.
The US senator’s intervention into the AWB inquiry has added further pressure to an explosive debate in Australia that is set to dominate parliament when it resumes next week.
“We now have the American Congress breathing down our neck, considering that they have been misled,” Kim Beazley, opposition Labor leader said. “That is a very bad position to be in.
“John Howard needs to be able to go to the United States, and the rest of the world, and say all the possibilities of this are being properly examined.”
But Mark Vaile, Australia’s trade minister, said: “I can assure our colleagues in America that [the AWB] inquiry is being conducted fully, openly and transparently, and we'll investigate all facts put before it.”
Tony Cole, a former supreme court judge who heads the AWB inquiry, on Friday will announce whether he will seek to widen the scope of his investigations to include officials and other companies.
BHP Billiton, the world’s biggest mining company, may face investigation after the inquiry found the company was involved in brokering deals between AWB and Iraq.
However, Bruce Haigh, a former Australian diplomat, said if AWB and other companies were forced to disclose illicit payments, then the US, a wheat exporter, should do the same.
“I don’t think you’d ever hear the word ‘bribe’ mentioned. You’d hear ‘facilitation’ or ‘extra payments’. Everybody knows it happens. It’s the price the market will bear,” he said. “Howard and [Treasurer Peter Costello] can’t be that naïve and not know that’s how trade happens.”