Relaxed or worried?

Foreign Minister Alexander Downer was worried a couple years ago about that AWB bribery allegation: AWB contracts worried Downer: inquiry

Foreign Minister Alexander Downer demanded to know more about AWB's wheat contracts with Iraq two years ago after being warned that the wheat exporter could be caught up in a kickbacks scandal.

The Cole inquiry into the Iraqi kickbacks scandal heard Mr Downer was sent a ministerial submission by senior staff in his department in March 2004 about "fraud and corruption" linked to the United Nations' oil-for-food program (OFF), under which AWB was exporting wheat to Iraq.

The federal government has maintained it had no proof that AWB was paying kickbacks until the release of the UN's Volcker report in October last year.

The submission was prepared by Zena Armstrong, a director with DFAT's Iraq Task Force, and warned that while AWB had "strenuously denied" making any illicit payments, it had used a Jordanian trucking company which might have provided kickbacks to Saddam's regime.

The same submission, which was also sent to Trade Minister Mark Vaile, added that "any company doing oil-for-food business in Iraq could not have escaped being implicated in inappropriate activity whether or not they were aware of it".

But while Mr Vaile simply signed his version of the submission, Mr Downer wrote on his: "This worries me. How were AWB prices set and who set them? I want to know about this."

See, also It's a worry - the Foreign Minister's secret note on AWB

I wonder, then, how he got so relaxed about it afterwards? Downer was 'relaxed' about AWB warnings See, too, SHOCK and AWB

Meanwhile, Australian wheat just can't seem to take a trick. After crowing about doing a deal with the new Iraq regime as a result of his own involvement and trip to Iraq, Trade Minister Mark Vaile has seen the deal evaporate.
Iraq maintains rage on wheat contracts

ACCESS by Australian grain growers to the lucrative Iraqi market remains in doubt because of Baghdad's apparent rejection of a $70 million bid which growers hoped would restore Iraqi confidence in them in the wake of the AWB kickbacks scandal.

Despite last month's dash to Baghdad by the Trade Minister, Mark Vaile, to rescue business worth $800 million a year, Iraqi officials yesterday told the Herald that the deadline for a deal expired on Sunday and that the bid had failed to meet terms, which had been stated clearly to Mr Vaile and a new consortium making the bid.

The stumbling block is the Iraq Grain Board's fixed belief that Australia has been and is still attempting to gouge it on transport costs. In a one-line statement late on Monday, the Deputy Prime Minister, Ahmad Chalabi, alluded to the transport issue, adding: "To date no [acceptable] offer has been received from Australia."

Despite this seeming finality, a consortium spokesman claimed formal tender documents were filed with the grain board yesterday, but he refused to disclose details or to rate its chance of winning. Mr Vaile's spokesman said that the "commercial side" of the bid was the business of the consortium - not his.

A source close to the negotiations told the Herald: "I don't know if all this is a negotiating tactic by the Australians, but it utterly mystifies the Iraqis."

AWB waived its government-sanctioned monopoly right to the Iraq trade to allow a consortium of three other grain companies to make a one-off stand in the market after Baghdad said it would boycott AWB until the commissioner, Terence Cole, QC, had reported on his investigation of kickbacks worth $300 million that AWB paid to Saddam Hussein's regime.

But despite loud Iraqi protests, the new Australian consortium still appears to have made a pitch based on it retaining the highly profitable right to deliver the grain all the way to Iraqi warehouses.

Bitterness in Baghdad over the revelation by corruption inquiries in Sydney and New York of the extent of the profits AWB spun from past shipping deals is driving a demand that the Iraq Grain Board have the right to insure the cargo and to charter its own ships.

An Iraqi official explained: "This is where AWB made huge profits - it's much cheaper to ship from Perth to Iraq than it is from the US, but the Australians try to cover this up by offering a supply-and-transport price that is pitched at just a little less than the Americans could do it.

"This is not about Dr Chalabi being in a blood feud with the [Baghdad-based family that was the conduit for kickbacks to Saddam, the] al-Khawams or being in the pay of [the big US grain dealer] Cargill Inc - he just wants transparency." [sure]

The transport issue was identified as a "snag" in negotiations on the 350,000-tonne deal earlier this month. But a spokesman for the consortium, Wheat Australia, confidently predicted at the time that it would close the deal within the following week.

In the face of political criticism of his high-profile visit to Baghdad in late February, Mr Vaile told reporters on his return to Australia that he had "fought hard", adding: "I can't guarantee that we would have had the opportunity to fulfil this 350,000 tonnes if we had not travelled to Iraq."

Told yesterday of developments in Baghdad, his spokesman said: "Your query puts us in a difficult position. Mr Vaile's trip was to identify the problems, but the commercial side is out of his hands." The spokesman for Wheat Australia, Rhys Ainsworth, said there would be more discussions with IGB, but he refused to reveal if the consortium was seeking transport rights.

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