Bribes: PM's office alertedBy Marian Wilkinson and Cynthia...

Bribes: PM's office alerted

By Marian Wilkinson and Cynthia Banham
March 3, 2006

JOHN HOWARD was alerted to a Canadian Government complaint that AWB was paying kickbacks in Iraq six years ago, according to a secret Foreign Affairs cable released by the Cole inquiry yesterday.

The cable, sent to the Prime Minister, the former head of his department, Max Moore-Wilton, and Kim Jones, the former head of his intelligence office ONA, indicates Mr Howard and the highest levels of government were briefed on the Canadian kickback allegations and AWB's denials which went to the United Nations in early 2000.

Mr Howard has previously said he was unaware of information suggesting AWB was paying kickbacks for its wheat contracts in Iraq under the UN oil-for-food program. In January he told the ABC: "There is certainly, within my own direct knowledge and on the advice I have been given … no suggestion that I was told, any of my colleagues were told, or anybody in the Government departments were told of matters suggesting that bribes had been paid."

The release of the Howard cable came shortly before a tense exchange at the Cole inquiry when counsel assisting, John Agius, SC, threatened to send police armed with search warrants to raid AWB's headquarters in Melbourne. The row was sparked by the discovery that the company's former government relations officer, Andrew McConville, had kept detailed notebooks which have not been handed over to the inquiry.

AWB's barrister, James Judd, QC, said the threat of police action was "unwarranted and in our submission offensive".

Commissioner Terence Cole intervened, saying any "misunderstanding" over documents required by the inquiry had now been removed.

This week the Foreign Affairs Minister, Alexander Downer, and the Deputy Prime Minister, Mark Vaile, acknowledged in Parliament they were aware of Foreign Affairs cables about the Canadian claims released by the Cole inquiry.

New cables released yesterday show the Canadian complaint was dropped after Australia's UN mission in New York passed along documents assuring there was nothing untoward about AWB Iraq contracts.

A cable sent from the mission's officer, Bronte Moules, on April 5, 2000, told Canberra the UN "has confirmed that this clarifies the matter and removes any grounds for misperception".

But evidence yesterday revealed the response to the UN was orchestrated by AWB's Middle East manager, Mark Emons, who was actually organising illicit payments to Saddam Hussein's regime in breach of UN sanctions. AWB is accused of paying kickbacks of almost $300 million.

Mr McConville repeatedly said he could not recall details of the Canadian complaint. Asked whether he had contacted the then Foreign Affairs Middle East chief Bob Bowker and told him "this is bullshit" when the complaint was raised, Mr McConville said this was likely. Yesterday Mr Downer admitted that the former AWB chairman, Trevor Flugge, had taken more than $1million in cash to Baghdad to spend on reconstruction projects. Mr Downer did not deny assertions by Labor that Mr Flugge took the Government's cash into Baghdad from Kuwait in 2003, but said he did it because there was no banking system in postwar Iraq. "I'm not arguing with his numbers. The point I'm making is that he used Australian funds, he had to use cash - not cheques or Visa cards or American Express cards - to make payments to contractors rehabilitating infrastructure," Mr Downer said.

The Prime Minister's office would not comment last night.