downer couldn't see the wood for the trucking fees

AWB: Downer couldn't see the wood for the trucking fees


Christian Kerr writes:

The question at the heart of the Cole Inquiry has been whether the Government has been culpable or negligent. It's always been unlikely that the opposition would get a ministerial scalp on the grounds of culpability. There's been too much potential for plausible deniability.

And it's harder to bring down a member of Cabinet for sins of omissions – particularly given the redefinition of ministerial responsibility offered by the head of the Australian Public Service, Peter Shergold, Secretary of the Department of Prime Minister and Cabinet, at the National Press Club a fortnight ago:

“The Westminster system ensures that the government of the day is served by career administrators. But it is the governments who make decisions,” Shergold said. Yet at the same time, in the Q & A, when asked when a minister should resign he replied said that if a minister was involved with a breach of the law “or if a minister had their attention drawn to matters and then took no action, then it seems to me that a minister would be clearly responsible for failures within their department”.

So governments run the show – but only have to take responsibility if they get told it has all gone wrong and do nothing? Interesting.

“The United Nations cabled warnings to the Australian Government six years ago that AWB might be paying illegal kickbacks to Iraq — and Foreign Minister Alexander Downer admitted yesterday that ‘of course' he would have read the cables,” The Age reports today. “Sensational evidence rocked the Cole inquiry yesterday as newly declassified diplomatic cables proved that the Government was told in detail in 2000 about how the kickback rort operated — and was asked to investigate at a ‘high level'."

Downer was clearly furious in Question Time yesterday as the Opposition asked a series of questions on the cables. The allegations had come from trade rivals. Yet he told the Parliament “I was perfectly satisfied with the response of the department to these inquiries” and that “the United Nations drew the conclusion that these contracts were actually in order”.

All which makes these pars in The Age's report interesting reading:

The first cable — sent by Foreign Affairs' employee at Australia's UN mission, Bronte Moules — makes clear that Canada made the allegation after it lost valuable Iraqi contracts because it refused to pay kickbacks. Canada said it had been told by the Iraqis that AWB was paying kickbacks — which went on to total $290 million — in violation of UN sanctions…

Ms Moules passed on the UN warning to Foreign Affairs in early January 2000. The allegation spells out the exact nature of the kickbacks scheme: the withdrawal of excessive funds from a UN oil-for-food account and funnelling of extra payments to Iraq through a Jordanian trucking company, Alia, owned by the regime. It even correctly states the amount of the "trucking fees" being paid — $US14 per tonne of wheat.

Ms Moules wrote: "In short, it appears to be a system designed to generate illegal revenue". The cable also passed on the UN request for Australia to investigate at a "high level".

Ms Moules received a reply from Foreign Affairs senior manager Bob Bowker five days later, assuring: "At this stage, we think it unlikely that AWB would be involved knowingly in any form of payment in breach of the sanctions regime."

As Labor foreign affairs spokesman Kevin Rudd observed, action at this stage could have prevented the scandal from unfolding.

So, has Downer been negligent? If so, does that call for a ministerial scalp? Should Downer and DFAT have realised what was going on?

We now have a new AWB question – didn't Downer see the wood for the trucking fees?