Charges Advised in Oil-For-Food Probe

By Rod McGuirk
November 27, 2006
The Washington Post
Original Source: http://www.washingtonpost.com/wp-dyn/content/article/2006/11/26/AR2006112600961.html
CANBERRA, Australia -- An Australian inquiry on Monday recommended police pursue criminal charges against 12 business officials in connection with multimillion-dollar kickbacks that the country's monopoly wheat exporter paid under the U.N.'s Iraqi oil-for-food program.
The report found no illegal activity by the Australian government.
The royal commission's report into payments by the Australian Wheat Board said 11 of its officers might have breached Australian corporate law and a 12th executive employed by another company that had dealings with AWB might be guilty of criminal conspiracy.
Prime Minister John Howard ordered the inquiry last year after an investigation by former U.S. Federal Reserve Chairman Paul Volcker exposed the AWB as the largest source of suspect payments under the oil-for-food program.
From 1996 to 2003, the oil-for-food program allowed Iraq to sell oil on the condition that most of the money go toward humanitarian supplies. Payments to Saddam were illegal under U.N. sanctions imposed on Baghdad after its 1990 invasion of Kuwait.
Authorities say the program was corrupt and allowed Hussein to evade U.N. sanctions and collect huge kickbacks from thousands of international companies. By some estimates, $1.8 billion was looted from the program.
A U.N. report last year said more than 2,200 companies had colluded with Saddam's government, paying kickbacks on lucrative contracts in the 1996-2003 program.
From 1999-2003, AWB executives authorized $222 million in bogus transport fees to a Jordanian trucking company part-owned by Saddam's government, Volcker found.
The conduct of AWB and its officers was due to a failure in corporate culture, former judge Terence Cole said, in the report, which was formally released to Parliament Monday. I found no material that is any way suggestive of illegal activity by the (Australian government) or any of its officers.
The report recommended a police task force be set up to consider charges against the 12 people named in the report. Howard immediately promised to do so.
Howard also announced the government will urgently review the system that gives the private, government-chartered AWB a monopoly over Australia's wheat exports, and announce the findings shortly.
AWB has cast a shadow over Australia's reputation in international trade, Cole said in the introduction to his report. That shadow has been removed by Australia's intolerance of inappropriate conduct in trade, demonstrated by shining the bright light of this independent public inquiry on AWB's conduct.
The inquiry's government-given mandate was to examine only whether AWB executives _ not government officials _ broke the law in their AWB dealings.
At a news conference after the report was released, Howard said the report proved wrong opposition claims that the government had been negligent in allowing the kickbacks.
Critics say the government failed to respond to a string of diplomatic cables sent from Australian officials at the U.N. and in the Middle East warning that AWB may have been violating the sanctions on Baghdad.
Howard, Foreign Minister Alexander Downer and former Trade Minister Mark Vaile testified before the inquiry in April _ rare appearances by leaders at such an inquiry.
All denied ever seeing the cables or having any knowledge that AWB was breaking U.N. sanctions.