Six Australians sued in connection with UN oil-for-food scandal

http://www.iht.com/cgi-bin/search.cgi?query=By%20Tim%20Johnston&sort=publicationdate&submit=Search By Tim Johnston 
December 20, 2007
The International Herald Tribune
Original Source: http://www.iht.com/articles/2007/12/20/news/australia.php
http://www.iht.com/articles/2007/12/20/news/australia.php \l # \o Click to view map SYDNEY: Six Australian businessmen are facing the prospect of millions of dollars in fines after the authorities brought a civil case against them in connection with huge bribes paid to the government of Saddam Hussein.
The six men are all former senior managers of the Australian Wheat Board, which an independent inquiry last year found had paid about 290 million Australian dollars, now worth about $250 million, in bribes to the Iraqi government just as Australian troops were preparing to go to war.
The bribes, which the AWB paid to secure contracts to supply wheat to Iraq under the UN-sponsored oil-for-food program, were disguised as transport fees paid to a Jordanian trucking company partially owned by Saddam Hussein's Ministry of Transport.
The Australian Securities and Investments Commission alleges that the defendants contravened section 180 of the Corporations Act, which requires company officers to act with care and diligence, and section 181, which requires company officers to discharge their duties in good faith and for a proper purpose, the commission said Wednesday.
The men, including a former AWB chairman, Trevor Flugge, each face 7 to 17 counts, with every count carrying a potential fine of 200,000 Australian dollars.
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http://www.iht.com/articles/2007/12/20/news/australia.php Six Australians sued in connection with UN oil-for-food scandal
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The men could also face criminal proceedings. The securities commission said Wednesday that it had decided to proceed with the civil cases first because the statute of limitations expires earlier for civil suits than for criminal cases.
The bribery scandal first came to light in 2005, when a United Nations investigation into the oil-for-food program uncovered evidence that AWB might have broken the law.
Until this year, AWB had a government-sanctioned monopoly on the export of wheat, and when the news of the scandal broke, it caused a sensation in Australia. John Howard, then the prime minister, set up a Royal Commission under a retired appellate judge, Terence Cole, to investigate the allegations.
Cole's report heavily criticized the company, saying that as many as 11 former officers could face charges. It left unresolved questions about the role of the government.
The contracts in question were cleared by the Department of Foreign Affairs and Trade before being passed on to the United Nations.
The inquiry heard evidence that the government first heard rumors of the bribes as early as 2003, but when Cole called on the foreign minister then, Alexander Downer, to testify, he said he had heard nothing.
AWB said Thursday that it would be inappropriate to comment on the new cases against its former employees, but the company is facing at least four class-action suits for its role in the scandal.
U.S. grain farmers last year filed a $1 billion lawsuit. Under provisions of the Racketeer Influenced and Corrupt Organizations legislation, they accused the company of using illegal methods to shut North American wheat growers out of lucrative markets in the Middle East and Asia.
Iraqi citizens have filed two class-action suits against AWB's U.S. subsidiary, alleging that the company had contributed to injuries and damages sustained by the plaintiffs by giving substantial assistance to the former government of Saddam Hussein.
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