Wheat board 'should have known'The AustralianOctober 28, 2005...

Wheat board 'should have known'
The Australian
October 28, 2005
AUSTRALIA'S wheat exporter should have known that millions of dollars it paid in transport costs were illegally funnelled to Saddam Hussein's regime in Iraq, an investigation has found.

The final report of an independent inquiry into the United Nations oil-for-food program has found more than 2,200 companies made illicit payments totalling $US2.3 billion ($3.02 billion) to Saddam's government.

The report found the Australian Wheat Board (AWB) paid more than $US221 million ($290.4 million) to a Jordan-based collection agent for the Iraqi government under the program.

Investigators, led by former US Federal Reserve Chairman Paul Volcker, concluded that some AWB employees probably knew that those payments would benefit the Iraqi government.

The AWB and Alia, the collection agent, have both denied that the board knew that Alia was partly owned by Iraq's Transport Ministry.

"The evidence does not suffice to conclude that AWB had actual knowledge of Alia's partial ownership by the government of Iraq, that it had actual knowledge of the fact that Alia did not actually perform trucking services for AWB's wheat, or that it had actual knowledge of the fact that Alia remitted the payments it received from AWB to the government of Iraq," the report said.

"On the other hand ... numerous documentary and circumstantial warning signs placed at least some employees of AWB on notice that payments to Alia may have been illicitly funding the Iraqi regime."

AWB today insisted it was an unwitting player in a ruse that helped prop up Saddam Hussein's government.
AWB managing director Andrew Lindberg said the report supported AWB's position that the monopoly wheat exporter and marketer did not know the money they were paying for trucking was being diverted to Saddam's regime.

"We didn't know and I think the disturbing thing that we now read in the report was that issues were raised with the UN itself but they were not dealt with and they certainly weren't communicated at any time to AWB," Mr Lindberg told ABC Radio National.

"I think it can be debated what someone should or shouldn't have known but the fact remains that we didn't know, and if we didn't know we couldn't be said to be paying kickbacks."

AWB was the biggest single humanitarian provider to Iraq during the oil-for-food program set up after the 1991 Gulf War, shipping millions of tonnes of wheat to the market it has supplied since 1948.

Mr Lindberg insisted that AWB did not suspect corruption, despite trucking costs jumping from $US12 at tonne in 1999 to between $US45 to $US56 a tonne between 2001 and 2003.

"We've been dealing with the IGB (Iraqi Grain Board) for 50 years, trucking was provided for under the UN contract, we paid them, every contract was approved and, you know, perhaps with the wisdom of hindsight clearly maybe more inquiries should have been made," he said.

"But it certainly appeared to us reasonable at the time to pay the fees in the knowledge that every contract had the explicit approval of the United Nations."

The oil for food program, which began in December 1996 and ended in 2003, was aimed at easing the impact of UN sanctions imposed in 1990 after Baghdad's troops invaded Kuwait.

It allowed Iraq to sell oil in order to pay for food, medicine and other civilian goods.



AWB denies cash paid to Saddam
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The Australian Wheat Board has defended its role in the oil-for-food scandal, saying at no time did it know that $290 million it paid to a Jordanian trucking company was being diverted to the Iraqi Government.

The board was one of some 2200 companies, including major concerns like DaimlerChrysler, Siemens and Volvo, that made illicit payments totaling $US1.8 billion ($A2.4 billion) to Saddam Hussein's Government under the UN oil-for food program, a report by a UN-established Independent Inquiry Committee said.

The report, led by former US Federal Reserve Chairman Paul Volcker, also named politicians in Russia, France, Britain, Italy and elsewhere who were given favors by Saddam in his quest to get UN sanctions lifted.

The program, which began in December 1996 and ended in 2003, was aimed at easing the impact of UN sanctions imposed in 1990 after Baghdad's troops invaded Kuwait. It allowed Iraq to sell oil to pay for food, medicine and other civilian goods.

Hindsight

The managing director of the AWB, Andrew Lindbergh, told ABC Radio the board was never advised by the program's administrator, the UN - which approved all transport contracts - or the Australian Department of Foreign Affairs, that there might be a problem.

The board paid more than $290 million in transport fees to a Jordanian company, which then gave the money to the Iraqi Government.

The report concluded there were no firm evidence that the board was aware the money was being diverted to the Saddam regime, but it suggested board employees should have been suspicious.

Mr Lindbergh said: "I think it's got to be remembered that the committee has the benefit of hindsight ... access to information and documents that people at the AWB could not have known."

Mother of all programs

"It was the mother of all humanitarian programs," Mr Volcker told a news conference, a reference to Saddam's threat that countries who opposed him in the 1991 Gulf War would face "the mother of all battles."

The companies involved came from all over, including large corporations in the United States, Russia, France, Germany, Switzerland and others. Russia led the list of both legitimate and illegitimate oil contracts, getting $19.3 billion from Iraq, some 30 per cent of oil sales.

So far, half of the companies denied any illegal activity.

The report said that under the program, Iraq sold a total of $64.2 billion of oil to 248 companies, of which 139 paid illicit surcharges.

In turn, some 3614 companies sold $US34.5 billion of humanitarian goods to Iraq and 2,253 paid kickbacks, the report said. The total that Iraq made from the companies, which were registered in 66 countries, was $1.8 billion.

But Mr Volcker said this was far less than the nearly $11 billion Saddam made in smuggled oil sales outside of the program. Some of this was with the knowledge of the UN Security Council which was supposed to supervise the operation.

Mr Volcker said his latest and last report after 19 months of investigation was meant to focus about what happened outside of the UN's control.

But in an address to the 191-member UN General Assembly, he said that since the corruption was so widespread "why was that not perceived and why was action not taken" by the Security Council or UN officials.

- Reuters

Theage.com.au

Report names top firms that bribed Saddam
By Warren Hoge
Sydney Monring Herald

October 28, 2005
More than 4,500 companies took part in the U.N. oil-for-food program and more than half of them paid illegal surcharges and kickbacks to Saddam Hussein, the committee investigating the program is to report.

The country with the most companies involved in the program was Russia, followed by France, the committee says in a report to be released Thursday US time. The inquiry was led by Paul A. Volcker, former chairman of the U.S Federal Reserve Board.

The findings are in the committee's fifth and final report, a document of more than 500 pages that will detail how outside companies from more than 60 countries were able to evade U.N. controls and make money for themselves as well as for the Saddam government.

Three investigators who described their findings in interviews declined to name the companies, though they said the companies would be identified in the report. They refused to speak on the record about the report until it is released.

The new report studies the people outside Iraq who profited illicitly and how they did it. It will identify companies and individuals who took part, both deliberately and inadvertently, and will chronicle in detail the experience of 30 to 40 of them, the investigators said.

In an interview, Volcker said that while he knew the naming of companies and the exposure of international "machinations" would draw attention, he hoped it would not obscure his committee's purpose in keeping the focus of their work on the need for U.N. reform.

"In my mind," he said, "this part of our investigation, looking at the manipulation of the program outside the U.N., strongly reinforces the case that the U.N. itself carries a large part of this responsibility and needs reform.

"Even though we are looking at it from the outside, it kind of screams out at you, 'Why didn't somebody blow a whistle?' The central point is that it all adds up to the same story. You need some pretty thoroughgoing reforms at the U.N."

Those manipulating the program ranged from established trading companies to front companies set up for the purpose, and included some companies of international reputation as well as many well known in their home countries, the investigators said.

Saddam received $1.8 billion in illicit income from surcharges and kickbacks on the sales of oil and humanitarian goods during 1996-2003, when the program ran, the committee concluded in its last report in September.

Earlier Volcker committee reports summarising the year and a half of inquiries have examined the activities of the United Nations, finding the institution's management inept and corrupt, and providing evidence that the program's former director, Benon V. Sevan, received kickbacks himself. He has denied any wrongdoing. The $64 billion program was set up by the Security Council to help ease the effects of U.N. sanctions on the 27 million Iraqis by supplying food and medicines in exchange for letting the Saddam government export oil.

The investigators said Thursday's report would detail how Saddam first steered the program to gain political advantage with political allies and countries in a position to ease the U.N. sanctions. Both Russia and France are veto-bearing members of the Security Council.

"Then it got corrupted with a capital C when Saddam figured out how to make money off it by putting on the surcharges and kickbacks," one investigator said.

All the companies named have been notified, and many have replied, with some of their responses reflected in the final report.

"The responses range from absolute denial to complete admittance," an investigator said.