Monday, February 06, 2006

Buying a Very Large Suitcase

*** Scroll down for updates ***

As you probably know, Australia produces and exports wheat, which helped Australia get some contracts under the U.N. food-for-oil program. The U.N. investigation found that the Australian Wheat Board (AWB) bribed Saddam's government to get some good business under the U.N. program. The New York Times reports:

The Australian Wheat Board was privatized as AWB Ltd. in mid-1999 but retains the monopoly on exporting bulk wheat from Australia, whose shipments are valued at more than $4 billion a year. It has not denied making millions of dollars in payments in the deals with the Iraqis, but company officials told a United Nations panel investigating oil-for-food corruption that they thought the money was for "inland transportation."


I'm sure they'll try to defend themselves as much as they can. No surprise there.

The Sydney Morning Herald reports:

A SECOND whistleblower is due to give crucial evidence when the oil-for-food inquiry resumes today detailing who knew Australia's wheat exporter was secretly paying $300 million in kickbacks to Saddam Hussein's government.

The former head of AWB's Middle East desk, Dominic Hogan, is expected to begin outlining what happened from 2000 to 2003 when the bulk of the kickbacks to the former Iraqi regime were paid via the Jordanian company Alia.
Mr Hogan took over from Mr Emons in 2000 and will be asked how much was known about the kickbacks by senior AWB figures, especially the managing director, Andrew Lindberg, the chairman, Brendan Stewart, and the former chairman Trevor Flugge.

The inquiry has seen emails from Mr Hogan, including one dated October 12, 1999, sent to Mr Emons and others in which he referred to his "brilliant idea" on how to meet Iraq's demand for $US12 per tonne of wheat.

"The system that will be the most workable would be that AWB create an account in Jordan and transfer funds to this account. From this account we would transfer to a special account nominated by IGB [Iraqi Grain Board] for each vessel," Mr Hogan wrote.

In the last line he jokingly canvassed other options for remitting the kickbacks, including buying "a very large suitcase".


I definitely want to see anyone who failed the Iraqi people in the past, present and future pay for their corruption. I wonder how many big suitcases each corrupted company or contractor filled in the last three years.

The Australian reported today:

MANAGERS of ethical investment funds could be forced to consider selling out of BHP Billiton after the federal Government last night widened the kickbacks-for-Saddam inquiry to include the world's biggest miner.

Attorney-General Philip Ruddock last night widened the inquiry's terms of reference to probe BHP and a company set up by former executives of resources giant Tigris Petroleum.
"The terms of reference have been amended in accordance with Mr Cole's request and in the form proposed by him," Mr Ruddock said in a statement.

The move followed evidence that BHP financed a $US5 million wheat sale to Iraq in the hope of securing oil and gas concessions, in breach of UN sanctions.


It looks like more than one large suitcase was bought by Australian companies.

The Australian has more on the AWB case:

The Australian has learned that Australia's wheat exporter, AWB, was dobbed in to UN investigators by the Iraqi minister who ordered the company to pay bribes.

Iraq's former trade minister, Mohammed Medhi Saleh -- who would later become known as the Six of Hearts in America's card pack of Most Wanted Iraqis -- became a whistleblower in November 2004.

He told UN investigators that AWB had for years been making payments to a Jordanian trucking company known as Alia, which kicked the money straight back to Saddam's regime.
Saleh gave damning evidence to the Iraq Survey Group, a team of more than 1000 people, including dozens of Australians, who went to Baghdad after the war to discover Saddam's secrets.

He also demolished AWB's claim that it did not know it was funding Saddam's regime. Saleh was interrogated by a panel of UN investigators on November 18, 2004. According to a record of the interview, he told the UN that all Iraq's suppliers under the oil-for-food program had "paid kickbacks to the government of Iraq".

He said "AWB made its payments through Alia" and that Alia, a Jordanian trucking company, was a front for Saddam's regime.


I like it when thieves turn against each other. It's kind of entertaining in a sick way.

UPDATE III - Feb 21, 2006
Since my last update, there were developments in the AWB oil-for-food scandal.

On the 8th, The Sydney Morning Herald reported:

THE Deputy Prime Minister, Mark Vaile, has been personally drawn into the oil-for-food scandal. A document released by the Cole inquiry yesterday named him as meeting an Australian businessman lobbying for the recovery of an illicit $US5 million BHP debt from Saddam Hussein's regime.

The Foreign Minister, Alexander Downer, was also confronted with allegations that emerged yesterday at the inquiry that Foreign Affairs officials had "looked into" the sham trucking company that channelled almost $300 million in kickbacks from AWB to the Iraqi regime.


More people has been
This is very interesting but I'm not all that surprised.

Two days later, the scandal claimed its first victim:

THE Iraqi-oil-for food scandal has claimed its first major victim, with the managing director of monopoly wheat exporter AWB, Andrew Lindberg, resigning after weeks of pressure.

The resignation, announced by the company late yesterday, came as the Herald learned of an approach last year by Mr Lindberg to the Foreign Minister, Alexander Downer, seeking help in heading off an impending United Nations report into kickbacks.


That was a very smart step as he's going to pocket a very good amount of money:

Although Mr Lindberg has relinquished all executive responsibilities immediately, he will continue to receive a salary until April 30. At last year's pay rate, that means Mr Lindberg will pocket $250,000 over the next seven weeks. The company has not decided on a severance package for Mr Lindberg, but having been contracted until September 30, 2008, he could get millions in compensation.

"Once completed, [severance arrangements] will be publicly announced," the company said in a statement.


I wonder how is he spending his time! Maybe surfing.

On the other hand, Iraq has suspended its operations with AWB until the complition of the Cole enquiry.

The biggest losers in result of this decision are the Australian wheat farmers. The Sydney Morning Herald reported on the 15th:

THE Prime Minister has made a personal plea to Iraq to reconsider its decision to suspend its relationship with AWB and will meet executives from the wheat exporter today to discuss relaxing its monopoly.

In a letter to Iraq's Prime Minister, Ibrahim Al Ja'afari, John Howard urged his Government to think about individual Australian wheat growers, as well as the countries' long-standing trade relationship in wheat, and Australia's support of Iraqi democracy.


This is really sad as I know the farmers have nothing to do with this scandal; and yet they're the losers here.

You'd think it ends here. But, there's more to the story:

A FEDERAL Government appointee to the occupation government in Iraq promoted a corrupt Baath party official to a senior position to help secure AWB's wheat contracts in Iraq.

An AWB document released yesterday by the Cole inquiry into the UN oil-for-food scandal reveals that an AWB manager, Michael Long, boasted he had secured a position for the former head of the Iraqi Grain Board, Yusef Abdul Rahman, "to top post in the Ministry of Trade and ensured his survival through the de-Baathification of upper levels of Iraqi civil service".


This made my head spin. I don't know what to think any more.

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