Australian Kickback Inquiry Is Slowed by New Documents 
By Raymond Bonner
April 4, 2006
The New York Times
Original Source: http://www.nytimes.com/2006/04/04/world/asia/04australia.html

SYDNEY, Australia, April 3 — The hearing into accusations that Australia's wheat exporting company, AWB Ltd., paid $200 million in kickbacks to Saddam Hussein under the United Nations oil-for-food program was delayed for nearly 50 minutes on Monday morning while lawyers pored over six volumes of documents the company supplied over the weekend.
The development helps explain why the hearings, which began in January and were expected to last four weeks, began their 13th week on Monday. 
At the start, AWB's lawyers told the government-appointed commission conducting the hearing that 164 volumes of company documents were the only ones relevant to the inquiry. But the commission has uncovered more than 100 additional volumes and has forced the Foreign Ministry, the Defense Department and even the country's spy agencies to turn over other documents. 
At the outset, Australian officials, led by Prime Minister John Howard and Foreign Minister Alexander Downer, were categorical in denying that the government had any knowledge that the company had made any illicit payments.
A United Nations investigation headed by Paul A. Volcker concluded in October that AWB had paid bribes in connection with the oil-for-food program, with tens of millions of dollars channeled through Alia, a Jordanian trucking company that was partly owned by the Iraqi government. Officials of the Australian company insisted that it had not known that Alia was a front for Mr. Hussein's government.
The intelligence documents show, though, that as far back as 1998, Australian intelligence agencies had been told that Alia was a front for the Iraqi government and was being used to violate United Nations sanctions against Baghdad, imposed after Mr. Hussein's forces invaded Kuwait in 1990. 
AWB is accused of having been the largest payer of bribes under the oil-for food program, through which Iraq was allowed to sell some of its oil and use the proceeds to buy goods needed by the civilian population, including wheat. The payments that the company is accused of making would amount to nearly 14 percent of the illicit payments made, the Volcker inquiry's report said.
Mr. Downer made Mr. Volcker's investigation more difficult, according to testimony before the Australian commission, initially barring government officials from testifying and withholding government cables. Mr. Howard eventually ordered his government to cooperate fully, but the documents and testimony before the commission indicate that Australia's assistance to Mr. Volcker was limited.
Still, Mr. Howard said when he appointed the commission that it was not until the Volcker report came out that he became aware of the AWB payments. 
As John Aguis, the silver-haired counsel for the investigating commission, has methodically questioned company and government officials, day after day, the denials by the company and the Howard government have become less categorical. 
Based on the evidence that Mr. Aguis — who seems to remember every word of a witness's testimony, even weeks later — has succeeded in extracting from a few company officials, there are strong indications that the company knew that money it was paying Alia was going to the Iraqi government. 
One of the looming questions now is what government officials knew and what action they took, if any. In June 2003 a United States Army captain assigned to the Coalition Provisional Authority in Baghdad wrote that every contract under the oil-for-food program included a kickback to the regime. The memo was widely disseminated to Australian officials, including Prime Minister Howard.
But Mr. Howard, who has responded to inquiry developments on the radio — a popular forum here — and in Parliament, said that he did not recall reading the cable, and that it would have been among hundreds that I receive every week.
Wheat is a major Australian export, Iraq was one of its major buyers and Australian wheat growers have long been in fierce competition with American farmers. Evidence produced in the hearing has indicated that to keep Iraq's business, the company was willing to pay almost anything it asked. 
After the Volcker report was issued, an American public relations consultant who specializes in corporate crises advised the company to admit that it had paid bribes and make a profuse apology, according to the testimony of a company official. It is not clear why the company rejected that approach, and lawyers for AWB blocked the draft apology from being made public as part of the commission's record. 
As of Monday, 320 documents discussed at the hearings remain confidential, but more than 700 are part of the public record. Transcripts of the testimony and the exhibits are available at www.ag.gov.au/agd/www/UNOilForFoodInquiry.nsf.)
In an editorial last week, the newspaper The Australian said Foreign Minister Downer ducks and dives, saying AWB tricked everybody. It was unusually harsh criticism by the newspaper, which was a strong supporter of Australia's participation in the Iraq war and generally supports Mr. Howard's center-right Liberal Party.
Last week, the chief of the investigating commission, Terence Cole, a retired judge, ordered Mr. Downer to submit a written statement, which is expected to be filed Wednesday. Mr. Downer is expected to appear as a witness early next week.