Downer tried to gag diplomats in kickbacks inquiry

Caroline Overington
March 24, 2006
The Australian
Original Source: http://www.theaustralian.news.com.au/common/story_page/0,5744,18583542%255E2702,00.html


ALEXANDER Downer tried to prevent Australian diplomats talking to UN investigator Paul Volcker or handing over confidential diplomatic cables relating to the Iraqi kickbacks scandal.

The Howard Government's secretive approach infuriated Mr Volcker, who admonished it for failing to co-operate with his inquiry into bribes paid to Saddam Hussein under the UN's oil-for-food program. 
The Cole inquiry heard yesterday that, contrary to the Government's oft-repeated claim to have co-operated fully with the Volcker inquiry, Department of Foreign Affairs and Trade officers were initially banned from talking to Mr Volcker's investigators. 
Foreign Minister Mr Downer also tried to block Mr Volcker from seeing confidential diplomatic cables. 
Mr Volcker complained to Australia's ambassador to the UN, John Dauth, at a meeting on February 7 last year that the Howard Government was not providing sufficient co-operation, and that its approach was beyond reticent, even forbidding. 
When John Howard was told about Mr Volcker's rebuke, he intervened, ordering DFAT to co-operate fully with the UN inquiry. 
There must be maximum co-operation and transparency, the Prime Minister said in a handwritten note dated February 11 last year. 
Mr Volcker, a well-respected former US Federal Reserve chairman, warned Mr Dauth that his inquiry had evidence that AWB had corrupted the oil-for-food program and that it would be in the Howard Government's best interests to co-operate. 
His statements stand in stark contrast to repeated and vehement claims by the Government on its co-operation. 
On October 31 last year, a day after the Volcker report named AWB as the largest single supplier of illicit funds to Saddam's regime, Mr Howard told parliament that the Government co-operated fully with the Volcker inquiry, providing all information requested by the committee and that Mr Volcker had cleared the Government of wrongdoing. 
He said Mr Volcker received full responses and co-operation and full documentation. 
On November 7 last year, Mr Downer told parliament that he had told his department quite some time ago that I wanted them to co-operate fully, to pass all documents they could possibly find to the Volcker inquiry. 
However, a classified document tendered to the Cole inquiry yesterday shows that Mr Downer agreed on November 19, 2004, to provide the UN with assistance but not to the requests to interview officials, provide material already held by the UN (such as contracts) or access to classified transmissions (such as cables). 
On December 2, 2004, Mr Dauth wrote to Mr Volcker outlining the Government's level of assistance, and noting that although interviews would not be permitted, any written questions would be answered. 
On December 17, 2004, Mr Volcker's investigators tried to encourage the Howard Government to co-operate more fully, by saying other countries were providing classified information of the type they were seeking from Australia. 
They also tried to get information from Austrac - the agency that monitors the movement of large sums of money from Australia to banks overseas - but it refused to co-operate, saying that it dealt only with countries and not agencies, such as the UN. 
On February 7 last year, the UN had obviously reached the end of its patience with the Australian Government. At a meeting in New York, Mr Volcker told Mr Dauth that the Howard Government was not being sufficiently co-operative. 
Mr Volcker strongly indicated at the meeting that it would be in the Government's and AWB's best interests to co-operate with the (UN's inquiry), according to the classified document presented to the inquiry yesterday. 
Volcker also indicated that he had strong evidence AWB Ltd had paid kickbacks to the Saddam regime, it said. 
Mr Downer said in a statement last night that he did not believe DFAT should provide classified material, as this would be accessible to foreign interests and be insufficiently protected in terms of Australia's national security interests. 
Opposition foreign affairs spokesman Kevin Rudd said last night: John Howard has once again been caught out not telling the truth. 
John Howard told parliament last year that the Volcker inquiry had received 'full responses and co-operation and full documentation' from the Government. That was simply untrue. 
Mr Rudd said the issue was critical, because Howard has continually justified the limited terms of reference he has provided the Cole inquiry on his assertion that the Volcker inquiry gave his Government a clean bill of health. 
Commissioner Terence Cole has been asked to investigate whether any of the three private companies named in the Volcker report - but not government departments, ministers or officials - broke Australian laws while dealing with Saddam's regime.