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)

At the inquiry, Flugge said he was unaware the payments were in breach of U.N. sanctions. He was not immediately available to comment on the findings.

Brendan Stewart, AWB's chairman, said in a statement that his board "deeply regrets" the way in which the wheat trade with Iraq was conducted.

From 1999-2003, AWB executives allegedly authorized $222 million in bogus transport fees to a Jordanian trucking company, Alia Transport, that was partly owned by Saddam's government. Payments to Saddam were illegal under U.N. sanctions.

AWB allegedly inflated the cost of wheat it was charging to the oil-for-food program by as much as $50 per ton to cover the bogus transport fees, which the Iraqi Grain Board demanded as a condition of lucrative grain contracts.

Cole also called for a review of the powers of the industry regulator, the Wheat Export Authority, saying it failed to keep AWB in check in Iraq.

"AWB knew that the fee it was paying to Alia was not for the provision of transport services. It knew the fee was a payment to Iraq," Cole said, noting AWB went to "extraordinary lengths to hide the payment."

"These subterfuges were undertaken because AWB knew that the fees were not approved by the United Nations," Cole said.

Cole also found, however, that the world body knew Iraq was breaching sanctions by requiring extra payments for transport fees and after-sales service fees.

"It took no steps to publicize or warn member states of the Iraqi practices and it took no steps to stop the practices," Cole said.

In New York, U.N. spokesman Stephane Dujarric said files from the larger inquiry into oil-for-food "continue to be accessible and available to all judicial authorities investigating these allegations."

"What the United Nations Secretariat has done and how it handled the program has been thoroughly examined by Mr. Volcker for all to see in his voluminous report and we have accepted the findings of his investigation," Dujarric said.

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On the Net:

Inquiry Web site: http://www.offi.gov.au/