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U.S. suspends and possible banning AWB from all contracts
In a statement released in Washington yesterday, Agriculture Secretary Mike Johanns announced the suspension and possible banning of Australian wheat company AWB from all U.S. government programs and contracts.

In the release, Mr Johanns said that, following the findings of the Cole Commission established by the Australian Government to look into allegations of kickbacks; enough evidence now existed of "illicit activities" by AWB to warrant suspension. This was done, said the Agriculture Secretary, to "protect the public interest" and to guarantee the integrity of the companies with which the U.S. does business.

With immediate effect the company is prevented from "participating in any U.S. government procurements as well as many other U.S. government programs such as loan guarantees," said Johanns. He also stated that the individual employees of the company charged by the Cole Commission are also barred from business activities in the U.S., saying their actions in trying to cover-up the kickbacks was "egregious."

The Cole Commission, headed by Commissioner Terence Cole, recently found AWB guilty of diverting US$220 million in bribes to the Saddam Hussein-led Iraq government during the United Nations' now notorious Oil-for-Food Program. Delivering his findings to the Australian Government on Nov. 27, Cole found the bribes were paid to secure lucrative wheat deals in Iraq and recommended charges be laid against eleven AWB employees.

The Commission was originally set up by the Howard Government in response to allegations of kickbacks by AWB in the U.N.'s Volcker Inquiry Committee. The Inquiry, a U.N. designated Committee established to look into the Oil-for-Food kickback allegations and headed by former U.S. Chairman of the Federal Reserve Paul Volcker, found an amount of US$1.8 billion had been channeled to the Iraqi Government in violation of United Nations regulations.

While wheat exporters in the U.S. have welcomed the U.S. Department of Agriculture's decision, AWB company spokesman Peter McBride said the ban would have no practical impact on its business, insisting that AWB still has a good worldwide reputation.

Mr McBride said that, though the company's image had been tarnished in recent times, AWB is working hard to turning that around under the new management team led by Gordon Davis. Though acknowledging that the company’s rehabilitation will take time, he said that AWB has received great support from its international buyers.

Since the release of the Cole Report, the Howard Government has come under pressure to end the "single desk" agreement that allows AWB -- formerly the government-owned Australian Wheat Board -- a monopoly in the export of wheat from Australia.

However the issue has split the conservative Liberal/National government's ranks with the rural-based Nationals calling for the retention of the single desk saying it provides wheat growers with a competitive edge over other exporting countries. Most wheat farmers throughout Australia, already suffering loss of earnings in the worst drought in Australia for over a century, have supported the retention of AWB's export monopoly.

Many influential Liberals though have called for the agreement to end saying the findings of the Cole Commission into AWB's dealings in Iraq has shown AWB had damaged Australia's trade reputation. They are proposing the wheat exporter be stripped of its monopoly. The export wheat market will then be thrown open to include other -- including international -- export agencies.
MGR Archive 21.12.2006
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