Oil for Food Justice

November 30, 2006
The Wall Street Journal
Original Source: http://online.wsj.com/article/SB116483932656336151.html
Australia's involvement in Saddam Hussein's Oil for Food scam has been known for years. But the bright light shone this week by the Cole Commission report is nonetheless illuminating -- and a lesson for other countries.
In 2,065 pages, Sir Terence Cole and his team unmask the vast corruption in AWB Ltd., Australia's former wheat board and supplier for a time of 16% of the world's wheat. That alone is a huge public service. AWB was the single largest payer of kickbacks to Saddam. From 1999 to 2003, the company paid $221.7 million to Iraq through transportation fees and after-sales-service fees designed to evade U.N. sanctions and Australian law. Given such compliant partners, it is little wonder Saddam thought the world would never act against him.
AWB's complicity started in July 1999, when the Iraqi Grain Board asked for a $12 per metric ton transportation fee for the wheat AWB wanted to sell to Iraq. Under U.N. sanctions, Iraq couldn't receive foreign currency; it was allowed to sell oil and deposit the proceeds in a U.N. escrow account for the purpose of buying food. But rather than reject Baghdad's blackmail, AWB rolled over and figured out a way to pay the bribe through third parties.
Mr. Cole's report demonstrates that AWB's senior directors devised front companies to disguise the illegal fees to Saddam and evade U.N. sanctions. Then they lied about it. At no time did AWB tell the Australian government or the United Nations of its true arrangements with Iraq, Mr. Cole wrote. Canadian and American wheat companies did complain to their governments about AWB's practices. But AWB lied to Australia's Department of Foreign Affairs and Trade, the Australian Trade Commission, the Coalition Provisional Authority in Iraq, and Paul Volcker's Oil for Food investigation.
The Australian government started to act once Mr. Volcker's probe began turning over the rocks. Apart from the U.S., no other nation has launched a full-scale, independent criminal investigation into the crimes committed as part of Oil for Food. Mr. Cole's thoroughly readable report is available at www.oilforfoodinquiry.gov.au. He has recommended 11 AWB employees, plus a BHP Billiton executive, for criminal prosecution.
Meanwhile, most other countries have done little or nothing to come clean. France, which was given preferential oil allocations, has only a lone prosecutor moving ahead, with little support from the Elysée Palace. Russia, which facilitated the oil allocations and blocked moves on the Security Council to investigate kickbacks, refused to assist Mr. Volcker, much less prosecute anyone. Ditto for China, which received huge oil allocations, and Vietnam, whose state-owned food companies paid kickbacks in exchange for business contracts.
Regarding the U.N., Mr. Cole notes that The United Nations knew that Iraq was breaching sanctions by requiring payment of inland transport fees and surcharges or after-sales-service fees. It knew this between 1999 and 2003. . . It took no steps to publicize or warn member states of the Iraqi practices, and it took no steps to stop the practices. Mark it down as another coda to Kofi Annan's disastrous legacy as Secretary General.