Fed: Not much satisfaction from PM, ministers, as Cole rolls on

AAP General News (Australia)
04-14-2006
Fed: Not much satisfaction from PM, ministers, as Cole rolls on

By Belinda Tasker

SYDNEY, April 14 AAP - Tickets to see the Rolling Stones might have been in hot demand
in Sydney this week, but the scramble for seats at the AWB kickbacks inquiry was just
as strong.

With Prime Minister John Howard and two of his most senior cabinet ministers taking
centre stage at the Cole inquiry, it was standing room only in the public gallery.

But while the Stones impressed their fans with fireworks, the trio of star performers
in the witness box across town didn't deliver much satisfaction.

After a massive build-up ahead of their appearances, Mr Howard, Foreign Minister Alexander
Downer and Deputy Prime Minister Mark Vaile failed to provide any major new insights into
the $300 million kickbacks scandal.

The prime minister and his ministers struggled to remember much, if anything, about
warnings the government began receiving six years ago that something could be amiss in
the wheat contracts AWB had with Saddam Hussein's regime under the United Nations' oil-for-food
program.

The warnings were largely contained in a batch of 21 diplomatic cables sent by various
government officials alerting the government to "irregularities" in AWB's contracts which
breached UN sanctions against Iraq.

Some clearly stated that Saddam's officials were demanding all companies involved in
the oil-for-food program in Iraq cough up an extra 10-19 per cent fee - the payment of
which would have been a clear breach of the sanctions.

On top of that, the powerful US Wheat Associates loudly complained in 2003 that AWB's
wheat contracts contained inflated prices and that the money could have been propping
up Saddam's government.

But Mr Howard, Mr Downer and Mr Vaile stuck to a similar script at the Cole inquiry
this week when quizzed about the various warnings the government received.

All three either suffered memory failure when it came to the cables or said they were
never shown them by advisers.

All three said they dismissed the claims from the US because they came from a fierce
rival of AWB, which the trio believed to be an Australian company of high repute.

And all three appeared more than happy to pass the buck on who should have followed
up the warnings about AWB's behaviour.

Mr Howard said he would never have expected his advisers to alert him to the cables
and that it was the job of the Department of Foreign Affairs and Trade (DFAT) to have
dealt the warnings they raised.

Mr Vaile's excuse for not ordering his department or staff to carry out independent
checks into any of the allegations was that he was "snowed under" with work and, anyway,
he told Commissioner Terence Cole, the oil-for-food program didn't fall under his responsibilities
as trade minister.

Mr Downer, whose department was responsible for passing on AWB's contracts to the UN,
simply had no "specific recollection" of the cables and added that the UN never produced
evidence of any wrongdoing by AWB while the oil-for-food program ran between 1996 and
2003.

The performances by Mr Howard and his ministers at the inquiry have left Labor baying for blood.

"All you can say was that a deliberate blind eye has been turned here and culpable
neglect is what the prime minister here is guilty of," Opposition Leader Kim Beazley said.

"He cannot wash his hands like Pontius Pilate and say it was somebody else's responsibility.

"This is a shocking national security failure ... the prime minister is at the heart
of this and his two ministers, what a pair of clowns ... the buck's ended up with Saddam
Hussein but the policy buck stops with John Howard."

When the UN handed down a damning report based on its major investigation into corruption
of the oil-for-food program last October, it found AWB paid nearly $300 million in kickbacks
to Saddam's government.

The money was funnelled into the Iraqi dictator's coffers by AWB paying so-called "trucking
fees" to a Jordanian-based transport firm, Alia, which was part-owned by the Iraqi regime.

Unlike the UN, the Australian government never carried out any independent checks of
the claims against AWB.

Mr Howard told the inquiry that while he first believed the Iraqis were rorting the
UN's program back in 2002, the year before allied troops toppled Saddam's regime, he never
thought AWB was involved.

"I had always believed the best of that company, as had most people in the government,"

he told the Cole inquiry.

In his evidence, Mr Downer insisted it was the UN's job, not his department's, to ensure
AWB's contracts were squeaky clean.

DFAT "wouldn't have had great expertise in terms of specific contracts of that kind", he added.

When Mr Vaile was quizzed about whether DFAT should have demanded answers from AWB,
the deputy prime minister said: "Well, I suppose it is easy to say, with the benefit of
hindsight, maybe someone should have."

The only time the government did appear to demand answers from AWB was in March 2004,
when Mr Downer was "worried" about news that the Australian grain trader would be investigated
by the UN.

Two-and-a-half months later AWB sent a letter to his office, but made no mention of
prices in its wheat contracts.

Mr Downer conceded at the Cole inquiry that while AWB had hardly given him a "sufficient
answer", no further action was taken.

About a year later, Mr Downer's worries had subsided despite AWB's bosses rushing to
warn him that the wheat exporter feared it was in big trouble with the UN's investigators.

Explaining his change of heart this week, Mr Downer said at the time he didn't get
the sense from AWB that it "would necessarily be in great difficulties" with the UN.

"I might have turned out to be wrong about that," he added.

While Mr Downer and Mr Vaile might have regrets about failing to act in the face of
so many warnings, the Cole inquiry can go only so far in admonishing the government for
its role in the kickbacks scandal.

Under its terms of reference, it can only examine what the government knew, if anything,
about the kickbacks.

With Mr Howard and his ministers out of the witness box, Mr Cole takes centre stage
as he prepares to weigh up just who should have done something about all those warnings.

The hearings will continue later this month.

AAP bt/hn/it/sp

KEYWORD: AWB (AAP BACKGROUNDER) REPEAT

2006 AAP Information Services Pty Limited (AAP) or its Licensors.