Aussie Oil-For-Food Probe Sees Crimes

Australian Prime Minister John Howard addresses a press conference in the gardens of his Sydney residence, in this Thursday, Nov. 16, 2006 file photo. Howard on Monday, Nov. 27, 2006 rejected claims that his government was guilty of negligence for allowing multimillion dollar kickbacks to be paid by Australia's monopoly wheat exporter to former Iraqi dictator Saddam Hussein. (AP Photo/Mark Baker) (Mark Baker - AP)

CANBERRA, Australia -- An inquiry cleared Australia's government of wrongdoing in an Iraqi oil-for-food scandal Monday, but recommended top officials of the monopoly wheat exporter face charges for paying more than $200 million to the Saddam Hussein regime.

Prime Minister John Howard promised the inquiry's key recommendations would be acted upon immediately and said the findings vindicated him and other top government officials who denied having prior knowledge of the kickbacks.

Howard's government launched the inquiry last year after an investigation by former U.S. Federal Reserve Chairman Paul Volcker exposed the AWB _ formerly the state-owned Australian Wheat Board _ as the largest source of suspect payments under the oil-for-food program.

Former Judge Terence Cole recommended police investigate 11 executives from the wheat exporter and a 12th from another company, saying they deceived the United Nations and likely broke Australian corporate and criminal law. But he found no evidence of wrongdoing by government officials in his monthlong investigation of the kickbacks.

Howard said a police task force would be set up to investigate AWB executives mentioned by Cole, who identified possible crimes but did not have the power to file charges.

Howard also said the government would review the system granting AWB a monopoly over Australia's wheat exports. The system has been criticized as unfairly protective by Australia's competitors on world grain markets.

"The government has hidden nothing," Howard told a news conference after the report was released. "The commissioner has found in the most emphatic terms imaginable that there is no evidence of wrongdoing" by the government.

Critics say the government was negligent for failing to respond to a string of diplomatic cables sent by Australian officials at the U.N. and in the Middle East warning that AWB may have been violating the sanctions imposed on Baghdad after its 1990 Kuwait invasion.

Labor opposition leader Kim Beazley said Howard's claims of vindication rang hollow, because the government should have known about the kickbacks and stopped them.

"What people expect of their political leadership is competence when they are handling national security matters and foreign policy matters," Beazley told Australian Broadcasting Corp. radio. "And what they've had from this government is gross incompetence."

The inquiry's government-given mandate was to examine company executives _ not government officials. Howard denied the investigative powers were set deliberately narrow to ensure the government was not implicated in the scandal.

Among the executives facing possible charges was AWB's former chairman, Trevor Flugge, who became widely known after a photograph became public of him, shirtless, brandishing a revolver during a trip to Iraq in 2003.