When Australian Prime Minister John Howard recently came to Washington to lobby for the U.S.-Australian free trade agreement, a key U.S. wheat leader called on Congress not to consider the U.S.-Australian pact until members figure out whether AWB Ltd., Australia's monopoly wheat exporter, engaged in kickbacks to the Saddam Hussein government under the U.N. Oil for Food Program.
Nelson Denlinger, vice president of U.S. Wheat Associates, the wheat marketing group, said, "It's a very logical demand from Congress" to follow up on letters that members wrote to President Bush and other administration officials last year demanding an accounting of AWB's relationship with Hussein under the Oil for Food program. Senate Minority Leader Tom Daschle, D-S.D., Senate Intelligence Committee Chairman Pat Roberts, R-Kan., and others wrote letters after Agweek and other publications reported last September that contracts between AWB and the Iraqi government showed that the Iraqis had paid AWB 280 euros per metric ton for wheat at a time when the euro was worth about $1 and the U.S. export wheat price was about $151 per metric ton.
Price difference
AWB said the difference in price was because of high risk and transportation costs, but it has acknowledged that it employed a Jordanian trucking company chosen by the Iraqi Grains Board.
AWB spokesman Peter McBride has declined to release the name of the Jordanian trucking company because it was part of a commercial contract, but he told ABC, the Australian radio network, "I can guarantee you that AWB was not involved in any kickbacks or bribes to the Iraqi regime. We had no knowledge of the relationship between the Jordanian trucking company and the Iraqi regime and we were unaware of any evidence that any of this money have been remitted to the Iraqi regime." AWB managing director Andrew Lindberg told ABC Rural, an Australian news service, May 27 that AWB is considering legal action to counter damages to AWB's reputation.
But Claude Hankes Drielsma, an adviser to the interim Iraqi governing council, has said both the United Nations and the companies should have realized something was going on. "Whether it's Security Council members, whether it's the wheat board, if you were paying into separate accounts (and) anybody who did trade did so, the percentages were added and they were were a party to the problem," Drielsma told ABC Australia.
Import business
Iraq has bought some U.S. wheat since the war, but more than half the Iraq wheat import business still has gone to Australia. Denlinger said U.S. wheat farmers are worried about whether U.S. wheat will get fair consideration in postwar Iraq because a visit by the Iraqi Grains Board, the import purchasing agency, to the United States had to be canceled two weeks ago after the U.S. embassy in Jordan declined to issue a visa for one member of the party. Denlinger noted that the Iraqi Grains Board and other Iraqi Agriculture Ministry officials already have visited Australia. The Iraqi Grains Board's plan to visit the United States "was a signal they did not want to be in the pocket of AWB," Denlinger said. He urged the State Department to resolve the visa issue before the other grain board members' visas expire in late June. U.S. wheat groups are not supporting the U.S.-Australian agreement because it does not include any changes in AWB, a monopoly entity that U.S. farmers say engages in unfair selling practices. Denlinger noted that Australian Trade Minister Mark Vaile has said Australia is willing to discuss changes in AWB as part of the World Trade Organization Doha Round. Denlinger said U.S. wheat farmers find that position "encouraging."
AWB officials repeatedly have denied any wrongdoing, but Reuters reported May 20 that AWB had agreed to a 10 percent reduction in an Oil for Food contract that still was pending when the war began. Reuters said the amended contract read, "The United Nations is implementing a price correction at the request of the Coalition Provisional Authority."
Issue in Australia
AWB's possible role in kickbacks to the Hussein government now has become an issue in Australia. Various publications have reported that Iraqi and U.N. officials have told reporters that the Hussein government insisted on 10 percent kickbacks, and the Sydney Morning Herald reported from New York May 25 that, "it could mean that as much as $US 120 million from Australia's contracts went toward propping up Saddam's regime."
The Morning Herald also said Paul Volcker, the former U.S. Federal Reserve Bank chairman who is head of the U.N. panel that is investigating the Oil for Food program, had said that "tug of war" has developed over the evidence. The Senate Foreign Relations Committee, the Iraqi Governing Council and the Coalition Provisional Authority and the United Nations are conducting investigations into the Oil for Food program. Senate Foreign Relations Chairman Richard Lugar, R-Ind., told State Department officials last month that they should turn over copies of the contracts to his committee.
Howard, a conservative who is expected to call an election later this year, also said that protecting Australia's wheat business is one reason for keeping Australian troops in Iraq. Australia has been one of the most supportive partners of the United States in Iraq and Howard is coming under increasing over Australia's role. Labor Party Leader Mark Latham has said that if his party is elected, it will bring the Australian troops home by Christmas. After a bomb went off near Australia's embassy in Baghdad, Howard told ABC that the Australian diplomats "need protection" and they are "looking after our very legitimate and significant commercial interests in wheat and elsewhere." He added, "People who run around saying that we should be in effect pulling the troops out after the 30th of June are just ignoring that fundamental fact."Agweek:
