Kickbacks bombshell buried six years (Oil for Food)

THe Department of Foreign Affairs was put on notice by the UN and the Canadian government six years ago that the wheat exporter AWB was accused of making illicit payments to Saddam Hussein's regime but one of the department's most senior officers failed to detect the scandal.

Documents released by the Cole inquiry into the UN oil-for-food scandal yesterday show that Bronte Moules, now an assistant secretary in the department, was told by the UN in early 2000 of a complaint by the Canadian government that AWB was paying trucking fees to the Iraqi regime in violation of the UN sanctions on Iraq.

Ms Moules, who was then working in Australia's UN mission in New York, passed the complaint back to Canberra with a request for information from AWB. Under the oil-for-food program, AWB was prevented from making payments to the Iraqis.

A former Middle East manager for AWB, Mark Emons, told the inquiry the wheat exporter was at the time making illicit payments to Iraq through a Jordanian trucking company called Alia. But AWB assured Foreign Affairs its contract was above board and sent the document back to the UN for approval.

Terence Cole, QC, who is heading the inquiry, said he would examine the Canadian complaint in detail, confirming yesterday he had the powers to examine and report on the role of the department in the scandal. This included whether any government official was told about illicit payments made by AWB to the former Iraqi regime. He said, however, that he was not permitted to make findings of any illegality by government officials.

Mr Cole is investigating allegations AWB paid $2.9 million in kickbacks to the Iraqi regime when it sold it wheat worth $2.3 billion under the oil-for-food program.

The details on Ms Moules's role in the Canadian complaint came just a day after another AWB witness said on Thursday he had sent the department a memo about kickbacks in June 2003. The global sales manager for AWB, Michael Long, said he sent the memo from Baghdad when the Government appointed him to the US-led occupation government. The memo and emails concerning it were sent to a Foreign Affairs officer, Zena Armstrong, who sat on the Government's Iraq Task Force. But the department said it did not believe the memo "specifically" referred to AWB kickbacks.

Yesterday both the department and the office of the Foreign Minister, Alexander Downer, refused to say whether any other members of the task force or other senior departmental officers saw the memo.

The Prime Minister, John Howard, said now was not the time to widen the Cole inquiry's terms of reference into the scandal so that it could make findings of illegality about government officials. But the Government would consider doing so if an approach was made. Mr Howard also said he was ready to appear before the inquiry if required.

Australia's leading company was drawn further into the scandal when Mr Cole said he would ask for wider terms of reference to investigate BHP Billiton. This week the inquiry was told the company had made an arrangement to sell wheat to Iraq in 1996 despite explicit advice from Foreign Affairs that the arrangement was in breach of UN sanctions on Iraq.

The Government is certain to agree to the expansion of the Cole inquiry and BHP executives face a grilling over their involvement in the activities in Iraq, including their association with their joint venture partner, Tigris Petroleum.

BHP's chief executive, Chip Goodyear, said yesterday the company was determined to ensure all the facts relating to a 1996 wheat shipment to Iraq - funded by his company - were aired publicly.

Mr Howard said he did not believe anybody in Foreign Affairs had behaved improperly. Nor did he believe that any of the leading players in his Government were aware of the possibility of bribes being involved in the wheat deals. "I did not know," he said. "Mr Downer and [the Trade Minister] Mr Vaile did not know, and on the information that I have and based on the advice, I do not believe that anybody in the departments were told that AWB were paying bribes."

Has anyone seen this yet too?

And by the way--about a year ago--maybe longer--before I was sick and out of action for those 8-9 months wondering what I would do if I pulled through--I had spent ALOT of Energy and time and lost alot of personal time doing a SERIES of articles condensing and gathering EVERY article related to the OIL FOR FOOD SCANDAL!--and I posted the threads HERE! In FR!--has anyone seen it?? How can I briong it back up?

Anyhow--here's a New article:

SUNDAY TIMES--
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BHP launches internal probe
By Andrew Trounson
20jan06

MINING giant BHP Billiton has been forced to launch a high-level internal investigation into its involvement in sponsoring the wheat sale to Iraq in 1996 that has become the centre of the AWB kickbacks scandal.

BHP Billiton chairman Don Argus is to head the investigation and the company has vowed to co-operate with the Cole inquiry into the scandal, which could result in current and former BHP executives being called to give evidence.
It has emerged that BHP and other major Australian oil companies still maintain relations with secretive Gibralter-based Tigris Petroleum, which has been named as a go-between in efforts to retrieve the $US8 million ($10.7 million) debt owed to BHP by a bankrupt Iraqi Government.

AWB collected a fee of at least $500,000 to help retrieve the debt.

In late 2004, BHP introduced Tigris to oil companies Woodside and Santos when the four companies signed a two-year agreement with the Iraq Oil Industry to evaluate potential projects in the Kurdistan region of northern Iraq. BHP is also in a joint venture with Tigris and oil giant Shell to increase output at the Halfayah oil fields in Iraq.

BHP yesterday said it was "extremely concerned" about the inquiry's revelations and was "working hard to clarify the facts as soon as possible".

Tigris was formed in 1995 by two then-BHP executives, Middle East petroleum expert Norman Davidson Kelly and Alan Taylor. According to former company insiders, Mr Davidson Kelly worked closely with BHP's current head of corporate development, Tom Harley.

Mr Davidson Kelly and Mr Taylor are believed to have only left BHP in 1997, two years after Tigris was formed. When contacted by The Australian Mr Harley declined to comment, but he is likely to be interviewed as part of Mr Argus's internal inquiry.

The inquiry, involving lawyers from Freehills for external advice, is also likely to want to interview current AWB head of rural services, Charles Stott, who was AWB's marketing manager for the Middle East at the time of the sale. After the wheat deal, Mr Stott was recruited by BHP for his Middle East experience, before later returning to AWB.

BHP is likely to have to resort to calling in several former employees. Mr Argus himself only joined the board in 1996 after the controversial wheat sale. Of the current senior executive team headed by chief executive Chip Goodyear, only iron ore and coal chief Bob Kirkby was with the company at the time.

BHP has described its involvement in the wheat sale as a "humanitarian gesture", but at the time many oil companies were seeking favour in Iraq following the 1991 Gulf War.
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A Lib is: you and he are trapped on a crashing airplaine-they'd offer to cut the last chute in half to SHARE it-but NOT before asking YOU for $1 so as to buy the scissors

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