Australia Knew About Oil-for-Food Scam 
By the Associated Press
March 17, 2006
The New York Times
Original Source: http://www.nytimes.com/aponline/international/AP-Australia-Oil-For-Food.html

SYDNEY, Australia (AP) -- Australia's government faced more criticism Friday after acknowledging its intelligence agencies knew eight years ago that Saddam Hussein was using the U.N. oil-for-food program to take financial kickbacks.
The scam is the subject of a top level inquiry into whether Australia's monopoly wheat exporter, AWB Ltd., knowingly paid up to $222 million in bribes through the Jordanian company to win lucrative contracts.
The money then was allegedly diverted to the former Iraqi dictator via a Jordanian company.
While AWB is the focus of the inquiry, Prime Minister John Howard's government is coming under increased scrutiny.
Previously classified documents released to the inquiry on Thursday show Australia's spies knew in 1998 that Saddam's government partly owned the Jordanian firm Alia and used it to channel illicit cash.
Opposition politicians charged that the documents further prove that Howard's government failed to properly investigate AWB's business dealings in Iraq.
''This is the grossest negligence on national security that we've seen from the Howard government in its 10 long years in office,'' Kevin Rudd, foreign affairs spokesman for the opposition Labor Party, told the Australian Broadcasting Corp.
Howard urged the public to reserve judgment until the inquiry published its findings.
''I reject the absurd allegations that have been made by Rudd,'' he said during a news conference with Secretary of State Condoleezza Rice.
The Department of Foreign Affairs and Trade said that although intelligence agencies knew of Saddam's scam, they did not know AWB was making payments through the company.
The government has long insisted it was unaware of AWB's dealings with Alia until last year, shortly before the United Nations published a damning report on corruption under the U.N. oil-for-food program.
The oil-for-food program, which ran from 1996-2003, allowed Iraq to sell limited and then unlimited quantities of oil provided most of the money went to buy humanitarian goods. It was launched to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait.
But Saddam, who could choose the buyers of Iraqi oil and the sellers of humanitarian goods, corrupted the program by awarding contracts to -- and getting kickbacks from -- favored buyers.
A year-long investigation concluded last year that the United Nations was responsible for the lack of transparency in the program that contributed to the abuses that plagued oil-for-food.
The investigation found that the $64 billion humanitarian operation was corrupt and inefficient, underscoring the need for urgent reform at the United Nations.
Former state Supreme Court judge Terence Cole has until June 30 to report on AWB's activities in Iraq.
Cole, who began his probe in January, cannot file any charges, but can recommend that officials or executives be prosecuted if they are found to have broken Australian laws in their oil-for-food dealings.
Senior AWB officials have not denied making the payments to Alia, but some have suggested they had no reason to believe the trucking fees were bogus or that they violated sanctions.