- The Washington Times - Thursday, April 13, 2006

MELBOURNE, Australia — Prime Minister John Howard faced an extraordinary public questioning yesterday during an inquiry into $290 million in kickbacks paid by the Australian Wheat Board to Saddam Hussein under the tainted United Nations oil-for-food program.

Investigators have turned up diplomatic cables dating from 2000 warning government officials about the kickbacks. But Mr. Howard insisted under oath yesterday that he was not aware of the payments before last year.

The government-run wheat exporter, now operating under the name AWB Ltd., shipped 6.8 million metric tons of wheat to Iraq as the largest single provider of humanitarian goods under the scandal-ridden U.N. program, earning some $2.3 billion.

Volcker commission investigators examining the U.N. program last year charged that in return, AWB paid $290 million for nonexistent services to a Jordanian trucking company, Alia, which was a front for the Iraqi government.

Mr. Howard, who has been in office 10 years, was called to give evidence before a Sydney-based inquiry headed by retired Judge Terence Cole. He was the first Australian prime minister to face questioning at a judicial inquiry since Bob Hawke in 1983.

Mr. Howard, who was heckled by protesters as he entered the hearing building, was questioned about communications including cables sent from the Australian mission to the United Nations beginning in 2000 disclosing accusations that kickbacks had been paid.

He was also asked about accusations by the U.S. wheat lobby in 2003 that AWB was paying kickbacks. The same year, the Coalition Provisional Authority in Iraq warned that all U.N. food contracts contained kickbacks of between 10 percent and 19 percent.

“I believe that I did not receive or read any of the relevant cables at any time during the relevant period,” Mr. Howard told the inquiry.

The prime minister added that he would not have expected his advisers to have shown him the cables and that he could not recall the issue being raised with him. “The culpability of AWB did not really enter my mind until 2005,” he said.

The kickbacks became a major issue in Australia in October when the U.N. investigatory committee into corrupt activities, headed by former Federal Reserve Chairman Paul A. Volker, released its findings that AWB had forked over $290 million to Saddam.

Mr. Howard was questioned yesterday about a speech made at the National Press Club in Washington in March 2003 in which he condemned Saddam’s regime for “rorting,” or tampering with, the oil-for-food program.

“In that connection, did you ever have any suspicion that an Australian company … might have been involved in that rorting?” he was asked.

“No, I didn’t,” Mr. Howard replied.

Earlier this week, Foreign Minister Alexander Downer and Minister of Trade Mark Vaile appeared before the Cole inquiry. Both said they could not remember or had not seen any diplomatic memos or official cables regarding the kickbacks.

A scornful opposition and newspaper cartoonists have likened the government leaders to “Schultz”— the German sergeant of “Hogan’s Heroes” TV fame whose plaintive “I know nothing” became a catch cry in the 1970s.

Mr. Howard “cannot wash his hands like Pontius Pilate and say it was somebody else’s responsibility,” said opposition leader Kim Beazley. “This is a shocking national security failure. … The prime minister is at the heart of this and his two ministers — what a pair of clowns.”

Most political analysts, however, think Mr. Howard will weather the storm.

“After three months of hearings and despite numerous allegations and warning bells, no evidence has emerged that Howard or other ministers were told definitely that AWB was paying kickbacks,” said Mike Steketee, national affairs editor for the newspaper the Australian.

“The government may have been naive, or indulging in wishful thinking in wanting the allegations to go away. It may have been culpably negligent in not pursuing its inquiries more forcefully. But its denials that it knew conclusively the bribery was taking place have held,” he said.

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