UN shares blame for Iraq kickbacks - The Australian News
Caroline Overington
November 25, 2006
THE UN shares the blame for the Iraqi kickbacks scandal because it approved AWB's contracts with the regime of Saddam Hussein that "disclosed payment(s) ... to Iraq" in breach of the international body's own sanctions.
The Weekend Australian understands that the final Cole commission report, delivered to Governor-General Michael Jeffery by commissioner Terence Cole during a ceremony at Admiralty House in Sydney yesterday, will say that AWB included a vague reference to the kickbacks in four contracts submitted to the Department of Foreign Affairs and Trade and the UN in July and October 1999. It is understood that senior counsel John Agius concluded in his final submission that the UN should not have approved "any contract that disclosed on its face, a payment ... to Iraq".
AWB dropped the reference to trucking fees from its contracts in 2000, but kept paying the fee, ultimately funnelling $290million to Saddam's regime in the lead-up to the 2003 invasion of Iraq.
Mr Agius's final submission, which remains confidential, is believed to say that the UN "understood that such transport fees would have to be paid from the Iraq escrow account".
The Weekend Australian also understands that federal ministers, officials and bureacurats have escaped formal sanction, and that Mr Cole has concluded that the evidence does not support "an inference of actual knowledge" on behalf of DFAT.
The report will not be made public until it is tabled in federal parliament on Monday.
John Howard would not confirm yesterday that his Government had been cleared, telling Southern Cross Broadcasting that he was "obliged not to say anything about its contents until it is tabled in parliament early next week".
But the report is likely to say that several AWB executives may have breached the Crimes Act, the Corporations Act and perhaps the new terrorism laws. AWB may also face a new investigation by the tax office and a shareholder class action.
The UN's chief customs officer, Felicity Johnston, told the Cole inquiry on May 12 that she was told in 1999 that AWB may have been paying a trucking fee to Iraq, in breach of UN sanctions.
She passed the information to a DFAT official, Bronte Moules, who was then based at Australia's permanent mission to the UN in New York.
Ms Johnston said she asked Ms Moules "to inquire, discreetly, at a senior level, within the Australian Grain Board if any financial arrangements have been made with the government of Iraq".
Ms Moules cabled the allegation back to Canberra, but DFAT did not launch a formal investigation.
A second DFAT officer, Robert Bowker, who is now ambassador to Egypt, put the allegation directly to AWB, who told him it was "bull****". He did not inquire further.
Ms Johnston told the Cole inquiry she hurried AWB's contracts through a system of checks and balances because "wheat (was) considered of paramount importance ... and food contracts were always considered to be the most important contracts".
She agreed that she should have spotted the $12-a-tonne trucking fee when it first appeared in the contracts dated July and October 1999, but said she was new to the organisation and had received very little training.
Mr Agius suggested to Ms Johnston that "the UN understood that companies undertaking such obligations (paying such fees) would have to breach sanctions?"
Ms Johnston replied: "Yes, I think that's a reasonable assumption."
She also acknowledged an "inherent weakness" and "practical difficulties" in implementing the sanctions that were designed to hobble Saddam's regime.
The UN's own report, released late last year, first unveiled AWB's deep involvement in rorting the oil-for-food program in the years before the invasion of Iraq by coalition forces.
Read Dennis Shanahan's blog on the Cole inquiry at
www.thaustralian.com.au
