Australian PM In Kickback Scandal

The scandal engulfing the Australian wheat monopoly AWB, and its alleged kick backs in the oil for food programme, worsened as Australian Prime Minister John Howard denied that Australian officials had knowledge of millions of dollars in alleged kickbacks.

His comments were made in response to the publication of a July 2002 letter; in the letter Howard urged AWB's Managing Director, Andrew Lindberg, to stay "in close contact" with government officials as Iraq threatened to halve wheat imports from Australia because of its support for the United States.

AWB Ltd, formerly the Australian Wheat Board, is being investigated by the Australian government for allegedly paying US$221.7M in bogus fees to the Jordanian trucking firm Alia, which was part-owned by the Iraqi government.

The money was then allegedly diverted to Saddam Hussein.

The inquiry is at the request of the United Nations, which issued a report by former U.S. Federal Reserve Chairman Paul A. Volcker in October 2005 that stated that AWB made the "side payments" in violation of U.N. sanctions.

Howard stated in the letter:

"The government cannot accept any Iraqi attempt to politicise our wheat trade or to pressure us into dropping our support for U.N. Security Council resolutions requiring international inspection of Iraq's (weapons) facilities.

In view of the importance of this matter, I suggest that the government and AWB Ltd. remain in close contact in order that we can jointly attempt to achieve a satisfactory outcome in the longer term."

After the letter was sent, Lindberg visited Iraq with officials from Australia's Department of Foreign Affairs and Trade.

It is alleged that during that visit Lindberg agreed to pay Saddam's government US$2M in kickbacks, that were concealed in an inflated wheat contract.

Howard rejected the accusation that the government had known about the alleged kickbacks:

"We were in no way involved with the payment of bribes. We didn't condone them, we didn't have knowledge of them, but we did work closely with AWB."

"I would have been failing in my job as prime minister if I hadn't done everything I could to maintain and protect the wheat market because it was one of our best."

Kim Beazley, leader of the centre-left opposition Labor Party, said:

"Anything less (than a full enquiry) is a cover-up of what has been, to my mind, the worst piece of corruption I have seen in my 25 years as a federal politician at the federal level."