A former senior AWB executive told the government-appointed commission of inquiry into the Australian wheat export monopoly's deals with the now-ousted Iraqi government of Saddam Hussein there was a culture of regular bribes and kickbacks to foreign governments to secure Australian wheat sales.
On February 3, Mark Emons, who was AWB's Middle East sales manager until the middle of 2000, provided evidence to the inquiry headed by Terence Cole that senior AWB executives knew that $300 million in “haulage fees” to a Jordanian trucking company in 1999-2003 were in fact payments made to the Iraqi government.
The payments made by AWB went to the Iraqi finance ministry. They contravened the economic sanctions imposed on Iraq in 1990 by the UN Security Council and maintained until after the US-British-Australian invasion in March 2003.
Ostensibly aimed at punishing Hussein's government for its invasion of neighbouring Kuwait in 1990, the sanctions were then maintained for 13 years on the supposed grounds that they were necessary to force Iraq to dismantle its arsenal of “weapons of mass destruction” (even though Iraq had done this in the years after the 1991 war). In reality, the sanctions were maintained to impoverish and demoralise ordinary Iraqis so as to weaken their resistance to the US-led invasion and occupation of their country.
Combined with almost daily bombings by US and British war planes from the late ’90s, the economic sanctions had a devastating impact on Iraq's economy, causing the deaths of more than a million Iraqis, the majority of them children.
AWB made the payments to ensure that Australia rather than its US or Canadian rivals secured contracts to supply wheat to Iraq under the UN's “oil-for-food” program, which allowed Iraq to export a limited amount of its oil between 1996 and 2003 to purchase imports of food and medicine. Beginning in 1998, AWB captured two-thirds of Iraq's wheat imports of 3 million tonnes a year, earning the company $840 million annually.
Emons also testified that in 2000 AWB bribed a Pakistani government official to help secure a wheat export contract. He told the inquiry that AWB was actually paying two Pakistani officials — one of whom was also working for the US. He acknowledged that such details might “sound extraordinary”, but AWB had had an opportunity to offload poor-quality wheat to Pakistan for a good price.
The February 3 Age reported that another former AWB sales manager had told it that export deals in the 1980s entered into with Indonesia, Mexico and Bangladesh by the Australian Wheat Board — which was privatised as AWB Ltd in 1999 — involved payments to mysterious companies, local agents and government officials.
From 2000, Canada, the US, the UN and Russia all sounded alarms about AWB's contracts with Iraq. However, the Australian government either ignored the complaints or accepted AWB's denials.
PM John Howard, foreign minister Alexander Downer and trade minister Mark Vaille have denied that they or their officials in the Department of Foreign Affairs and Trade, who had to approve all of AWB's export contracts with Iraq, had any knowledge of the kickbacks to the Iraqi government.
However letters released by the Cole inquiry on January 28 show that Howard told AWB chief executive Andrew Lindberg in July 2002 that the government and the company had to remain in close contact as they tried to ensure Australia continued to gain the lion's share of wheat sold to Iraq under the UN's oil-for-food program.
This was at the same time as the Howard government was escalating its bellicose rhetoric against Iraq — repeating Washington's and London's lies about it having an arsenal of weapons of mass destruction in defiance of the UN resolutions. In response, Iraq threatened not to purchase any more wheat from Australia.
Later that same year, Vaille headed a delegation to Baghdad that included Lindberg and other AWB staff, along with DFAT officials. During the visit, AWB agreed to pay $2.7 million to the Iraqi government that was to be disguised in an inflated wheat contract.
Hypocrisy The revelations coming out of the Cole inquiry have exposed the staggering hypocrisy and mercenary calculations behind the Howard government's stance toward Iraq. The government was publicly claiming that Iraq was defying the UN by hiding from it a (non-existent) WMD arsenal, while at the same time Australian officials were secretly defying the UN to secure commercial deals.
While the ALP leadership has used the revelations to attack the hypocrisy of the Howard government's stance on Iraq, it has done so within a right-wing, “national security”, framework. Thus Labor leader Kim Beazley accused AWB of funding Iraqi resistance to the US-British-Australian invasion and subsequent occupation of Iraq. Last November 4, Beazley told reporters, “The effect of what has happened with $300 million going into the pockets of the Baath Party and now into the pockets of the insurgents means that the Australian soldiers in Iraq are effectively dodging bullets that have been paid for indirectly by us”.
On January 16, Kevin Rudd, Labor's shadow minister for foreign affairs, labelled the AWB's payments “Saddam's $300 million Aussie slush fund”. Without any evidence and as if the Iraqi government had no other sources of funds, on February 5 Rudd claimed that “money from rake-offs, kickbacks under the humanitarian program to Iraq, went to fund Saddam's $25,000 grants to the families of Palestinian suicide bombers”.
The US capitalist rulers invaded and occupied Iraq to install a puppet Iraqi regime that would legitimise their seizure of Iraq's vast oil resources and thus advance their goal of getting a stranglehold over the Persian Gulf's highly lucrative oil exports.
The Howard government, like a medieval European vassal, offered the imperial lord in Washington its military services in this act of international plunder in exchange for favourable consideration for Australian companies in getting post-war “reconstruction” contracts. It also secured Washington's support for a free trade agreement with the US, thus opening up US markets to major Australian companies.
The Howard government's policy toward Iraq has not only demonstrated the truth of 19th century German military thinker Karl von Clausewitz's remark that “war is the continuation of [government] policy by other [i.e. violent] means”. It has also demonstrated that for capitalist governments, war is the pursuit of profit by violent means.
From Green Left Weekly, February 15, 2006. Visit the Green Left Weekly home page.
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