wheat bribery claims grow

Wheat bribery claims grow
Email Print Normal font Large font By Marian Wilkinson
December 6, 2005

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AdvertisementAUSTRALIA'S wheat exporter paid millions of dollars in kickbacks to Pakistan, Indonesia and Yemen before it became embroiled in the illicit payments to Saddam Hussein's regime in the oil-for-food scandal, according to two former employees.

Describing a system of kickbacks for contracts within the Australian Wheat Board when it was under government control in the 1990s and after it was privatised in 1999 to become AWB, one former employee with direct knowledge of the payments said: "The culture of the organisation was: get the job done."

According to the former employees, the largest kickbacks before Iraq were paid to Pakistan in the 1990s where up to $8 million was paid in one year to a local agent who would pass on payments to officials.

"Basically, the officials in Pakistan, in the Ministry of Food and Agriculture, wanted to get a kickback … and AWB were given a third party to deal with. So funds were transferred into this third party's account," a former employee said.

"We would transfer $US4 ($5.36) a tonne. That would be on-transferred to the officials and whoever else was needed to make sure the business flowed smoothly. We were not given the names to whom he was transferring the money. We left it up to this guy who was professional in what he did."

A second employee said the agent in Pakistan would arrange an annual memorandum of understanding between the AWB and the ministry and set the price and the commission before a contract was signed.

Both former employees believe the kickbacks were known to individuals at senior levels of the AWB.

"This was not looked on as something that was bad," said one. "It meant you could get more money for that wheat, so what's your problem? Culturally that's the way the organisation worked."

In Indonesia, under former president Soeharto, the AWB paid a special rebate on its wheat contracts to the Bogasari Flour Mills. The company was controlled at the time by a close friend of Mr Soeharto and the rebate was paid into an offshore account. It was a deal that "would not have reached Australian business practice standards", said one former AWB employee.

Last month, the Howard Government set up a judicial inquiry under former justice Terence Cole into the kickbacks paid to Iraq in the oil-for-food scandal. The inquiry plans to begin hearings in Sydney on January 17.

Senior AWB executives, including Andrew Lindberg, managing director since 2000, have repeatedly denied any knowledge that payments were channelled to Saddam's regime in contravention of UN sanctions against Iraq.

Murray Rogers, who served as chief executive from 1997 to 2000, declined to comment, saying it was up to Mr Cole whether he examined the new claims. AWB had no comment yesterday.