Thursday 12th of December 2024

Running Against The Grain- What Downer And The Wheat Board Should Have Known

As Prime Minister Howard does an "about face" calls for an inquiry into Australian bribes in Iraq, it appears that knowledge of suspicious financial transfers by the
Australian Wheat Board's trucking company has been available for
several months, possibly well over a year.

According to a LA Times article in June this year, U.S. Embassy offoicials were aware
before this year that Jordanian trucking company Alia may have been
acting as a "front" for bribes to the Saddam regime.

The Australian Wheat Board paid more than US$221 million
(A$291 million) to a Jordan-based collection agent for the Iraqi
government under the program, the report said. The AWB has told The
Australian that ""fully co-operated with the
investigation". "AWB did not knowingly pay or enter into any
arrangements to pay monies to the former regime," it said in a
statement. "AWB relied on the UN to supervise and regulate the
(program). There was a 10-step contract approval process established by
the UN. Each AWB contract went through this process and was approved."

According to Bloomberg about 60 percent of all companies involved in the oil-for- food program paid
oil surcharges or kickbacks on humanitarian goods for Iraq totaling
$1.8 billion.

Bloomberg quotes the
U.S. ambassador to the U.N, John Bolton, as sayin that`Saddam Hussein
aggressively manipulated a well-intentioned program so that he could
divert to his personal use billions of dollars that belonged to the
Iraqi people,'' U.S. Ambassador to the UN John Bolton said in a
statement. ``He was only able to accomplish this misdeed with the
willing cooperation of UN officials, the acquiescence of some member
states, and, as today's report indicates, the willingness of private
companies and individuals to pay huge sums in bribes and kickbacks."

Investigation chief and former US Reserve Board Chairman Paul Volker said that "The
identification of a particular company in the report does not
necessarily mean that that company as opposed to an agent ... made,
authorised or even knew about illicit payments."

However, it's
now clear that the Coalition Provisional Authority has been aware of
Alia's activities for some time. Christian Miller's June 23 LA Times
story in June (no longer online.. reprinted here) explains how the plan for an Iraqi airline collapsed when the Austhority became aware of Alia'sinvolvement:

[excerpt]


The top U.S. transportation official in Iraq was forced out after
conducting closed-door negotiations to create a national airline with a
firm suspected of helping Saddam Hussein's regime skirt United Nations
sanctions, according to documents and current and former U.S. officials.

The proposal fell apart when top officials in the Coalition Provisional
Authority became concerned by the involvement of Alia Transportation of
Jordan, an alleged partner in Hussein's scheme to divert funds from the
U.N. "oil-for-food" program.

The plan also drew criticism for appearing to grant Alia an inside track to
a lucrative contract without competitive bidding, and for financing the
airline in a way that could violate a U.N. resolution.

The airline proposal was one of several problems that led senior CPA
officials to send Darrell M. Trent back to Washington in March, the
sources said. The coalition authority's inspector general is
investigating Trent's actions.

.... U.S. officials suspect that the Khawams [an ex-pat Iraqi family businiess]
operated Alia to help Hussein evade restrictions on oil sales under the
oil-for-food program after the Persian Gulf War, according to memos
obtained by the Los Angeles Times and U.S. government officials.

..... U.S. Embassy officials, however, said they had warned CPA officials against
doing business with the Khawams. And one U.S. Embassy official said
that he specifically warned Trent during the airline deal to "check
them out twice."

"I guess he ignored me," the official said.

By January, Trent was put on notice about Alia's past. An internal CPA
memo sent to Trent from his chief of staff, Mark Walker, said Alia was
created to "circumvent" U.N. sanctions.


If Alia's nature was "common knowledge" at such levels while Australian
interests were "unaware" then levels of intelligence-sharing between
Coalition partners should be questioned-why was this information not
passed on to participants in Oil-For-Food so that an informed decision
cold be made? However, if the information was passed on and ignored,
why was a blind eye turned? Why weren't such publicly made connections
investigated when they were printed, instead of waiting for the U.N.
announcement?

Of what other Australian involvement in corrupt practices in Iraq are we not being told?  How much, and whose, money is involved?

Honourable dissent

A letter in Financial Review, Nov 17th, reproduced in full:

AWB and a matter of responsibility  (subscription required)

It is with a small sense of relief and no great hope of a just finding that I note there will be a royal commission into the Australian Wheat Board payments to the trucking company, Alia, a front for the Saddam Hussein regime and funnel for kickbacks.

This week a member of the Australia Defence Forces, an Australian with a wife and very young family died preparing to go to Iraq. As an Australian and a wheatgrower I am devastated to think that in some way I may have contributed to his death because of the payments made by AWB through whom I am legally bound to sell my wheat.

I am a wheatgrower and do not support the actions of the AWB in this matter and strongly protest to the Howard government for denying me the right to sell my wheat through an alternative organisation.

I think the AWB should take responsibility for its actions and personally apologise to this soldier's widow and make a significant contribution towards the education of their children. In addition, it should apologise to all Australian wheatgrowers for internationally tarnishing our good name.

It is a small matter to some but I wish to live my life honourably.

Frank W. Drum, Minyip, Vic.