today at the cole inquiry abc online

A US senator says he is deeply troubled that Australia's former ambassador to the United States had told him AWB was not paying illegal kickbacks to the former Iraqi regime.

The senator's comments have come as evidence at the Cole inquiry in Sydney suggests the opposite.

Former ambassador Michael Thawley had urged Republican Senator Norm Coleman not to investigate AWB's activities in Iraq during a meeting in late 2004.

Senator Coleman insists Mr Thawley unequivocally dismissed allegations AWB was making illicit payments to Saddam Hussein's regime and says this helped persuade him not to proceed with his planned investigation.

Senator Coleman says he is now deeply troubled by Mr Thawley's representations to him in the wake of the revelations from the Cole Inquiry.

He says he is particularly disturbed that Australian Government officials appeared to know about the payments.

Senator Coleman is seeking a meeting with the new Australian Ambassador, Dennis Richardson, to discuss the matter further.

Meanwhile, Foreign Affairs Minister Alexander Downer says Australia's ambassador in Washington acted appropriately in the 2004 meeting.

Mr Downer also says he would be happy to appear before the Cole inquiry if requested.

"I think anybody should be happy to appear," he said.

International humiliation

The Federal Opposition is warning Australia faces international humiliation over the oil-for-food scandal.

Labor leader Kim Beazley says the issue adds further weight to the Opposition's demands for the Cole inquiry to be given broader scope.

"This ought to be properly examined here, not in the United States Congress," he said.

"But I tell you, if it's not properly examined here, it will be examined in the United States Congress, to our humiliation."

Payments

The Cole inquiry has today discovered that an AWB investigation last year revealed that its inland transport payments were going to the former Iraqi regime.

The information was not passed on to the Australian Government or the United Nations's Volker Inquiry.

The UN inquiry into rorting of the oil-for-food program reported last year that $300 million in AWB transport payments were kickbacks to the Iraqi regime.

AWB trading manager Michael Long also began investigating Alia Trucking of Jordan, which was paid for inland transport.

By October last year he knew Alia monies went to the Iraqi Government.

While in Jordan, he also discovered Alia did not transport any Australian wheat.

Commissioner Terrence Cole says it must have been a terrible shock for everyone at AWB to learn the company they had used for years had not trucked anything at all, contrary to its public statements.

Dave R.