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Wheat probe to hear claims of corruption
The inquiry into allegations that Australian Wheat Board officials bribed Saddam Hussein's regime to secure Iraqi wheat sales is expected to hear evidence claiming corruption within the authority.

The Sunday Age believes two key whistleblowers, both former AWB employees, are prepared to testify to the inquiry, which formally begins its investigations next month, provided they are granted immunity from prosecution.

Under his terms of reference retired judge Terrence Cole, QC, who also presided over the building industry inquiry for the Howard Government, has the power to grant immunity but is likely to do so only in exceptional circumstances.

Western Grain Growers chairman Leon Bradley said yesterday he believed the former AWB employees, who first raised concerns about the Iraqi wheat sales with him three years ago — concerns later dismissed by the AWB — would testify.

"They were deeply concerned about the inflated transport costs right from the very outset and they had a level of detail that suggests they had an intimate knowledge of the grain deals with Iraq," Mr Bradley said.

"They are determined to see that all is revealed."

Mr Bradley said his organisation had written to Prime Minister John Howard three weeks before the Cole inquiry was announced saying former AWB executives were willing to come forward if granted immunity. "We did not get a letter back, but we got what we wanted," he added.

The Cole inquiry was established this month to investigate whether AWB officials broke the law while conducting big wheat deals with Iraq between 1999 and the outbreak of the second Gulf War in 2002.

Justice Cole has the power to recommend criminal proceedings. Public hearings are expected to begin in Sydney in early January.

The federal Opposition has demanded a royal commission into the scandal. Foreign affairs spokesman Kevin Rudd claims that the Department of Foreign Affairs and Trade examined AWB contracts with Iraq many times but failed to detect any wrongdoing.

He said $300 million had been paid to the Iraqi dictator on John Howard's watch, and must be fully investigated. "This is a big international scandal," he said.

The Cole inquiry follows the release of the 600-plus page Volker report into corruption in the UN-supervised "oil for food" program. Volker investigated about 4500 companies and identified the AWB as a major violator. It found that the AWB had paid trucking fees well above market price to Alia, a Jordan-based front company for Iraq's transport ministry, in what amounted to bribes and kickbacks.

Although the AWB admitted trucking fees were paid to Alia, it has strongly denied any wrongdoing, claiming that at all times it believed the trucking costs were legitimate and necessary.

The Volker report pulled up short of accusing AWB officials of knowingly engaging in corrupt practices, but it treats official explanations with scepticism, concluding that officials should have known what was going on.

The report noted: "Numerous documentary and circumstantial warning signs placed at least some employees of the AWB on notice that payments to Alia may have been illicitly funding the Iraqi regime."

Volker said the AWB agreed to massive increases in transportation costs demanded by Alia without entering into a contract and failed to establish that the business was an Iraq front company that did not own a fleet of trucks.

All the while, Australian officials were in constant contact with Alia and Iraqi grain board officials in Jordan and Iraq.

There is also evidence that communications between AWB officials and Alia did not always pass through official channels.

Volker found that Australian officials were made fully aware that payments to Alia violated the UN food-for-oil program as early as January 2000. .

When UN officials subsequently raised the issue with Australia in the UN they were told the AWB had "categorically denied" the existence of payments outside the oil-for-food program guidelines.

A spokesman for the AWB declined to comment on the inquiry and said senior AWB officials would co-operate fully.
MGR Archive 27.11.2005
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