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Saddam got millions in wheat bribery scheme
When it comes to international bribery and illegal kickbacks, Australia’s inquiry of its state-sanctioned wheat exporter’s, AWB, sleazy dealings with Saddam Hussein-led Iraq is giving an all new meaning to the nation’s clever Down Under nickname.

Like down-and-dirty and under the table.

In its first three days of testimony in mid-January, lawyers for the government review, called the Cole Inquiry, have established that AWB paid $214 million in bribes and kickbacks to corrupt officials in the Hussein government to keep Aussie wheat exports flowing into Iraq under the United Nation’s Oil for Food Program between 1999 and 2003.

Much of the damning evidence was supplied by the UN’s Volker Report, a penny-by-penny account of the graft-filled humanitarian effort written by former Federal Reserve Chairman Paul Volker. It fingers AWB as the biggest bribe-payer to Iraq, forking over 14 percent of all the dirty cash skimmed by Hussein during the period.

It also confirms what American wheat growers, chiefly through U.S. Wheat Associates (USW), have long alleged: that Australia’s leading ag exporter followed a crooked path to Iraq.

Indeed, USW, the market-building arm of U.S. producers, repeatedly asked the White House, the U.S. State Department and USDA to explain how AWB was able to pour nearly 450 million bushels of wheat through the UN portal into Iraq while America couldn’t squeeze in a bucket.

Official Washington, however, chose to look the other way for two political reasons: the U.S.-led, 2003 invasion of Iraq was strongly supported by Australian Prime Minister John Howard and the White House’s near-blind obsession with free trade.

The trade side of the equation is particularly telling.

As the U.S. and war coalition partner Australia were putting boots on the ground in Iraq in 2003, U.S. Trade Representative Robert Zoellick and Australian Trade Minister Mark Vaile were putting together a bilateral free trade deal between the nations.

When finished, the trade deal was a big deal at home and abroad. First, both Canberra and Washington viewed the pact as an ingredient to push members of the World Trade Organization toward a global ag trade agreement - a forlorn hope; the Doha Round still stumbles on with no end in sight.

More importantly, however, is what Zoellick conceded, opening the U.S. market to increased Aussie beef exports, and what Vaile protected, Australia’s state-sanctioned, single desk wheat exporter, AWB, the former Australian Wheat Board which, in 1999, was reincarnated as a public company.

American wheat growers were sick. First they had to stomach AWB’s dirty dealings in Iraq, then they had to witness the White House kiss AWB’s suspiciously corrupt backside. It was too much. In Feb. 2004, USW announced it had “no choice but to oppose the (U.S.-Aussie) FTA.”

The Australian bribe inquiry now shows that while all the trade dealing was going on, the Howard government and the AWB were double-dealing.

Documented evidence presented at the hearings Jan. 16 and 17 offer solid proof that both the AWB and the Australian government were fully aware of the bribes AWB was paying Hussein cronies to keep Down Under wheat flowing to Iraq.

Even more telling is the emerging role of Trade Minister Mark Vaile. Last June, Vaile became leader of the National Party, the junior partner to Prime Minister Howard’s Liberal Party in the nation’s ruling coalition. As such, Vaile serves as both deputy prime minister and trade boss.

According to Guy Allen, an Illinois farmboy who has worked 13 years in Australia as a grain trader and risk manager, the key constituency in Vaile’s National Party is farmers and its “most sacred cow is the AWB.”

If the Cole Inquiry continues to connect the dots between the AWB and the Howard/Vaile government - something a six-year-old with a crayon could do - Allen believes the Prime Minister “will have some heads on some platters.” Vaile’s could be one.

The bigger story, he noted, is the AWB. “For years, it has said it needed single desk selling to compete in a corrupt market. Now we find out it’s the blackest kettle out there.”

Published in the January 25, 2006 issue of Farm World.