Australian Prime Minister faces grilling at Iraq bribes inquiry

13 Apr, 2006

Australian Prime Minister John Howard was Wednesday summoned for questioning at an official inquiry into the payment of sanctions-busting bribes to Saddam Hussein's Iraq.
Howard, who will be the first prime minister in almost a quarter of a century to appear before a commission of inquiry, said in a statement he was "happy" to comply.
The commission is probing the role of national wheat exporter AWB, formerly the government's Australian Wheat Board, in the corruption of the UN's oil-for-food programme in Iraq.
A UN-backed report last year said AWB paid 220 million US dollars in bribes to obtain 2.3 billion dollars in contracts from Baghdad in breach of sanctions against the former dictator's regime.
The commissioner, former judge Terence Cole, has heard evidence since the inquiry opened in January that the government was warned repeatedly that AWB was paying bribes to Baghdad.
Howard, a conservative ally of US President George W. Bush who sent Australian troops into Iraq to help topple Saddam in 2003, has publicly denied knowing that kickbacks were paid.
The prime minister follows his top lieutenants - Deputy Prime Minister Mark Vaile, who is also trade minister, and Foreign Minister Alexander Downer - into the witness box.
Vaile on Monday and Downer on Tuesday were asked what they knew of the bribes and when they knew it, and Howard is expected to face similar questions.
Both ministers have been ridiculed in the Australian media for saying they did not recall seeing more than 20 diplomatic cables over a period of years which warned of possible problems with AWB's Iraqi contracts.
The inquiry has heard that the bribes were funnelled to Baghdad through a Jordanian front company, Alia, as trucking fees, and were paid out of inflated prices claimed for the wheat through UN-run accounts.
The UN programme from 1996 to 2003 allowed Iraq to export oil to buy food and medicine aimed at lessening the suffering of civilians hit by the tough sanctions against Saddam's regime.
But last year's inquiry, headed by former US federal reserve banking chief Paul Volcker, found that some 2,000 companies world-wide were involved in a scheme designed by the former dictator to corrupt the programme, with AWB paying the biggest bribes.
While Howard and his ministers have put a brave face on being called before the commission, analysts say the spectacle of the country's leaders being grilled by lawyers will hurt the image of the government ahead of elections due next year.
The last serving Australian prime minister to appear before a royal commission was Bob Hawke, who was questioned over a spy scandal in 1983.
The opposition Labour Party has accused the government of turning a blind eye to the bribes, which it says helped fund Saddam's purchase of weapons that were later used against Australian troops.
Wheat is Australia's second biggest rural export, with annual sales around three billion dollars. But the scandal has hurt exports, with Iraq refusing to buy any more wheat from AWB, which sold 650,000 tonnes to Baghdad in 2005 and 1.3 million tonnes in 2004.
The United States, Australia's main competitor in international wheat exports, has in turn won a greater share of the Iraqi market - fuelling Australian government claims that the US was seeking commercial advantage from the AWB scandal.

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