- The Washington Times - Monday, November 27, 2006

CANBERRA, Australia — Top officials from Australia’s monopoly wheat exporter deceived the United Nations and likely broke Australian law by paying more than $200 million to Saddam Hussein’s regime under the Iraq oil-for-food program, an inquiry reported yesterday.

Former Judge Terence Cole said he found no evidence of wrongdoing by government officials in his months-long investigation into kickbacks, but recommended police investigate 11 executives from the wheat exporter and a 12th from another company.

Prime Minister John Howard said the inquiry’s key recommendations would be acted upon immediately. The Howard government instituted the inquiry after AWB — formerly the state-owned Australian Wheat Board — was named as the largest single payer of kickbacks in the corruption-ridden U.N. program.

Mr. Howard said a police task force would be set up to investigate AWB executives mentioned by Judge Cole, who identified possible crimes but did not have the power to file charges.

Mr. Howard also said the government would review the system granting AWB a monopoly over Australia’s wheat exports. The system has been criticized as unfairly protective by Australia’s competitors on world grain markets.

Mr. Howard said the report vindicated him, Foreign Minister Alexander Downer and former Trade Minister Mark Vaile, who claimed to have had no knowledge of the kickbacks.

In his five-volume, 2,000-page report, Judge Cole said he found no evidence of illegal activity by the government.

“The government has hidden nothing,” Mr. Howard told a press conference after the report was released. “The commissioner has found in the most emphatic terms imaginable that there is no evidence of wrongdoing” by the government.

The inquiry’s government-given mandate was to examine company executives — not government officials. Mr. Howard denied the investigative powers were set deliberately narrow to ensure the government was not implicated in the scandal.

The report said 11 AWB officers may have breached Australian corporate and criminal law. Among them was AWB’s former chairman, Trevor Flugge, who became widely known after a photograph became public of him, shirtless, brandishing a revolver during a trip to Iraq in 2003.

At the inquiry, Mr. Flugge said he was unaware the payments were in breach of U.N. sanctions. Brendan Stewart, AWB’s chairman, said his board “deeply regrets” the way in which the wheat trade with Iraq was conducted.

From 1999 to 2003, AWB executives purportedly authorized $222 million in bogus transport fees to a Jordanian trucking company, Alia Transport, that was partly owned by Saddam’s government. Payments to Saddam were illegal under U.N. sanctions.

AWB purportedly inflated the cost of wheat it was charging to the oil-for-food program by as much as $50 per ton to cover the bogus transport fees, which the Iraqi Grain Board demanded as a condition for lucrative grain contracts.

Judge Cole also found that the U.N. knew Iraq was breaching sanctions, but took no steps to stop the practice.

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