THE STORY SO FAR
How AWB's role was discovered
Apr 2004
* UN appoints former Federal Reserve chairman Paul Volcker to head inquiry
into Iraq's oil-for-food program
Oct 2005
* Volcker finds AWB paid nearly $300m in kickbacks to Saddam Hussein's regime;
finds no evidence AWB was aware fees were being funnelled to Iraqis but says
steep price rises should have alerted AWB to the possibility the Iraqi government was benefiting illicitly
Nov 2005
* Federal government appoints retired judge Terence Cole to head commission of inquiry into Volcker's allegations against AWB
Monday
* Counsel assisting Cole inquiry, John Agius SC, says evidence exists to show AWB officials knew payments to trucking company Alia were going to Saddam's regime and tried to conceal secret payments. Payments breached UN sanctions
* Former AWB chief Murray Rogers denies knowing AWB was paying kickbacks to Iraq but tells inquiry payment of trucking fees was discussed with Department of Foreign Affairs and Trade officers
Tuesday
* Counsel assisting reveals DFAT's role is being investigated
* AWB CEO Andrew Lindberg concedes that evidence he gave to UN Volcker inquiry was wrong
* Lindberg admits AWB may have profited from kickbacks to Iraqi regime by
hedging on foreign exchange markets
* Evidence is presented that AWB concocted a strategy to deceive the UN by inflating prices of its Iraqi contracts
* Lindberg drags Foreign Minister Alexander Downer into inquiry, saying he
met him numerous times to discuss AWB business in Iraq but that individual
contracts were not discussed
Yesterday
* Commissioner Cole accuses Lindberg of misleading his own board
* AWB issues statement to ASX blaming UN and Iraqi Grains Board over the way
kickbacks went to Hussein's regime
* Cole and Agius take issue with statement, with Agius saying it contradicts evidence
* Lindberg denies knowledge of statement, saying it was unauthorised
* AWB withdraws statement to ASX. ASX asks AWB to explain
AWB must face up to change at the top
Date: 19/01/2006
Words: 296
Source: AFR
Publication: The Financial Review
Section: News
Page: 54
Andrew Lindberg is the lavishly paid chief executive of a privatised company, AWB, which has the privilege of a government-granted wheat export monopoly. After day three of the federal inquiry into AWB's payment of almost $300 million in kickbacks to secure Iraqi wheat contracts in breach of United Nations sanctions, Mr Lindberg is a man whose credibility has been called seriously into question.
Not only has he had to recant his earlier evidence that AWB had not known that the kickbacks were being paid to the Iraqi government, but his repeated claim to have been blissfully unaware that AWB was paying bribes prompted the exasperated commissioner, Terence Cole, to ask yesterday: "Mr Lindberg, are you just making this up?"
It took an hour for counsel assisting the inquiry, John Agius, to extract from Mr Lindberg the simple admission that he had personally been involved in the settlement of a bogus claim for additional "compensation" to the Iraqi government for iron contamination.
This is not good enough. Captains of industry such as Mr Lindberg should not have to have admissions extracted from them like hen's teeth in an official inquiry into wrongdoing as serious as that alleged against AWB.
The position is made worse by the fact that AWB paid kickbacks to the government of Saddam Hussein as the Australian government was making preparations to join the coalition of the willing to oust him on the grounds of Iraq's serial defiance of the UN Security Council and the extreme brutality of his regime.
Mr Lindberg has become an embarrassment for AWB. Though it is early days in the inquiry, enough damage has been done for him to consider standing down so that the wheat exporter can move on.
Wheat chief misled board, inquiry told
Author: Andrew Main
Date: 19/01/2006
Words: 1136
Source: AFR
Publication: The Financial Review
Section: News
Page: 1
The chief executive of Australia's wheat exporting body, Andrew Lindberg, was yesterday accused by commissioner Terence Cole of misleading his board over what the retired judge called a "sham" agreement to recover a $US7 million debt from Iraq via the United Nations.
Mr Lindberg, who spent a torrid second day as a witness before the federal government inquiry into the Iraq oil-for food scandal, was asked whether he was making up evidence in trying to explain AWB's involvement in $300 million in kickbacks that went to former Iraq dictator Saddam Hussein's regime.
Counsel assisting the inquiry John Agius, SC, was also critical of Mr Lindberg regarding an AWB statement released to the Australian Stock Exchange yesterday, which it was forced to withdraw because it contradicted evidence given to the inquiry over the kickbacks.
The statement in Mr Lindberg's name said that no one, including the AWB, could be sure where the $300 million had ended up, despite strong evidence in the inquiry that it went to the Iraqi government.
He also claimed in the statement that "all contracts between AWB and the Iraqi Grains Board, including those involving inland transport, were required to be approved, and were duly approved by the UN".
Mr Lindberg was forced to concede in the inquiry that the contracts shown to the UN included almost no details at all about the controversial trucking payments.
The evidence came as Foreign Minister Alexander Downer confirmed that he had met AWB officials over its business in Iraq, but he denied that he had discussed details of specific contracts and payments.
Mr Lindberg repeatedly said yesterday he could not recall events put to him by Mr Cole and Mr Agius including evidence of transactions between AWB and Iraqi state agencies related to payments that contravened the UN's ban on cash transactions with Iraq.
The inquiry has been set up by the federal government to find out if any Australian laws were broken by AWB Ltd and two other companies in food-for-oil deals with Iraq between June 1999 and March 2003.
The inquiry is also investigating the role played by the Department of Foreign Affairs and Trade, whose officers regularly liaised with AWB executives over wheat sales to Iraq.
AWB paid $300 million to Jordanian intermediary transport company Alia, which is now known to have been a front for the Iraqi government.
To circumvent UN sanctions banning the sending of cash to Iraq, the Iraqi government forced wheat suppliers to pay anything up to $US55 a tonne, much of it before ships even docked in Iraq, in "trucking" and "after-sales service fees" that were then recovered in full by the shippers from an escrow account at the UN.
The fees covered some 43 UN-permitted wheat shipments by the AWB to the pariah regime over four years.
Commissioner Cole reacted strongly to Mr Lindberg's claim that he did not know where the $300 million finally ended up.
Mr Cole noted that it went "to an instrumentality in Iraq".
When Mr Lindberg agreed, Mr Cole said: "I'm glad you do, as we happen to have the Iraqi bank records."
Mr Lindberg said he could not recall seeing a fax sent in February 2001 by AWB's chartering officer, Coral Allen, telling Alia executive Othman Al-Absi that a ship carrying AWB wheat was being prevented from unloading at Iraqi port Umm Qasr because money had allegedly not been paid.
"Please advise urgently if these funds have been forwarded onto state agents," Ms Allen wrote.
In a series of testy exchanges throughout the day with Mr Agius and Mr Cole, Mr Lindberg regularly answered "I don't know" to questions about how much he and AWB's executives had known about the real arrangements whereby wheat was delivered to Iraq.
Much of the questioning focused on two unusual transactions, one in 2004 whereby AWB helped Gibraltar-based oil company Tigris to recover a $US7 million debt from Iraq by inflating a wheat sales contract between AWB and the Iraqi Grains Board. Tigris was founded by two ex-BHP employees.
The other contract involved the Iraqi government trying to claim $US2 million for supposed iron-filings contamination in a wheat shipment.
Mr Lindberg has described the claim of contamination as a "complete hoax".
Mr Lindberg spent much of the morning answering questions about how much he knew about the iron-filings settlement, prompting Mr Cole at one stage to say: "I'm not here to play with words. I'm here to discover the substance of what happened."
Mr Lindberg said he did not believe the $US2 million settlement, which Iraqi officials wanted to be paid in cash without UN oversight, was ever paid. But after extensive questioning he said he had agreed to the deal himself while on a visit to Baghdad in 2003.
The "Tigris" issue, whereby AWB recovered Tigris's $US7 million by inflating an invoice to the UN, was raised in an AWB board meeting in December 2004, where it was described as a commission to the oil company for helping AWB obtain wheat contracts with Iraq.
Mr Cole several times described the agreement as a sham.
Mr Cole asked Mr Lindberg whether he had told the AWB board that the Tigris arrangement was genuine or whether he told the board what the true arrangement was. He replied by saying he had "recovered a debt".
"Did you tell the board you had recovered the Tigris debt by inflating the contract price of wheat?" asked Mr Cole.
"I believe I did, I can't recall," replied Mr Lindberg. "I knew that was how it occurred."
"Did you tell the board that the UN had not been informed that the inflated price reflected the repayment of debt to Tigris?" Mr Cole continued.
Mr Lindberg said he could not remember what he had said.
Mr Cole also asked him how it was that no internal or external auditor at AWB had ever queried the fact that there was no written contract explaining the $300 million that was paid to Alia for trucking fees.
Alia did not, in fact, own any trucks, the wheat being carted in Iraqi government trucks from the dock at Umm Qasr.
"What sort of control existed?" Mr Cole asked.
Mr Lindberg said that the fees "flowed from the wheat contracts" and that no auditor had ever asked to see the non-existent trucking contract documents.
Mr Lindberg said that he made a trip to New York in late 2005 following the release of the draft report issued by former US Federal Reserve chairman Paul Volcker on the oil-for-food scandal, commissioned by the UN.
Mr Volcker's report noted that more than half of the companies trading with Iraq had entered "kickback" arrangements with the Iraqi government during the program, but stopped short of saying that AWB management knew the money it was paying to Jordanian company Alia was actually being sent on to Iraq in breach of sanction rules.
The inquiry continues.
How AWB's role was discovered
Apr 2004
* UN appoints former Federal Reserve chairman Paul Volcker to head inquiry
into Iraq's oil-for-food program
Oct 2005
* Volcker finds AWB paid nearly $300m in kickbacks to Saddam Hussein's regime;
finds no evidence AWB was aware fees were being funnelled to Iraqis but says
steep price rises should have alerted AWB to the possibility the Iraqi government was benefiting illicitly
Nov 2005
* Federal government appoints retired judge Terence Cole to head commission of inquiry into Volcker's allegations against AWB
Monday
* Counsel assisting Cole inquiry, John Agius SC, says evidence exists to show AWB officials knew payments to trucking company Alia were going to Saddam's regime and tried to conceal secret payments. Payments breached UN sanctions
* Former AWB chief Murray Rogers denies knowing AWB was paying kickbacks to Iraq but tells inquiry payment of trucking fees was discussed with Department of Foreign Affairs and Trade officers
Tuesday
* Counsel assisting reveals DFAT's role is being investigated
* AWB CEO Andrew Lindberg concedes that evidence he gave to UN Volcker inquiry was wrong
* Lindberg admits AWB may have profited from kickbacks to Iraqi regime by
hedging on foreign exchange markets
* Evidence is presented that AWB concocted a strategy to deceive the UN by inflating prices of its Iraqi contracts
* Lindberg drags Foreign Minister Alexander Downer into inquiry, saying he
met him numerous times to discuss AWB business in Iraq but that individual
contracts were not discussed
Yesterday
* Commissioner Cole accuses Lindberg of misleading his own board
* AWB issues statement to ASX blaming UN and Iraqi Grains Board over the way
kickbacks went to Hussein's regime
* Cole and Agius take issue with statement, with Agius saying it contradicts evidence
* Lindberg denies knowledge of statement, saying it was unauthorised
* AWB withdraws statement to ASX. ASX asks AWB to explain
AWB must face up to change at the top
Date: 19/01/2006
Words: 296
Source: AFR
Publication: The Financial Review
Section: News
Page: 54
Andrew Lindberg is the lavishly paid chief executive of a privatised company, AWB, which has the privilege of a government-granted wheat export monopoly. After day three of the federal inquiry into AWB's payment of almost $300 million in kickbacks to secure Iraqi wheat contracts in breach of United Nations sanctions, Mr Lindberg is a man whose credibility has been called seriously into question.
Not only has he had to recant his earlier evidence that AWB had not known that the kickbacks were being paid to the Iraqi government, but his repeated claim to have been blissfully unaware that AWB was paying bribes prompted the exasperated commissioner, Terence Cole, to ask yesterday: "Mr Lindberg, are you just making this up?"
It took an hour for counsel assisting the inquiry, John Agius, to extract from Mr Lindberg the simple admission that he had personally been involved in the settlement of a bogus claim for additional "compensation" to the Iraqi government for iron contamination.
This is not good enough. Captains of industry such as Mr Lindberg should not have to have admissions extracted from them like hen's teeth in an official inquiry into wrongdoing as serious as that alleged against AWB.
The position is made worse by the fact that AWB paid kickbacks to the government of Saddam Hussein as the Australian government was making preparations to join the coalition of the willing to oust him on the grounds of Iraq's serial defiance of the UN Security Council and the extreme brutality of his regime.
Mr Lindberg has become an embarrassment for AWB. Though it is early days in the inquiry, enough damage has been done for him to consider standing down so that the wheat exporter can move on.
Wheat chief misled board, inquiry told
Author: Andrew Main
Date: 19/01/2006
Words: 1136
Source: AFR
Publication: The Financial Review
Section: News
Page: 1
The chief executive of Australia's wheat exporting body, Andrew Lindberg, was yesterday accused by commissioner Terence Cole of misleading his board over what the retired judge called a "sham" agreement to recover a $US7 million debt from Iraq via the United Nations.
Mr Lindberg, who spent a torrid second day as a witness before the federal government inquiry into the Iraq oil-for food scandal, was asked whether he was making up evidence in trying to explain AWB's involvement in $300 million in kickbacks that went to former Iraq dictator Saddam Hussein's regime.
Counsel assisting the inquiry John Agius, SC, was also critical of Mr Lindberg regarding an AWB statement released to the Australian Stock Exchange yesterday, which it was forced to withdraw because it contradicted evidence given to the inquiry over the kickbacks.
The statement in Mr Lindberg's name said that no one, including the AWB, could be sure where the $300 million had ended up, despite strong evidence in the inquiry that it went to the Iraqi government.
He also claimed in the statement that "all contracts between AWB and the Iraqi Grains Board, including those involving inland transport, were required to be approved, and were duly approved by the UN".
Mr Lindberg was forced to concede in the inquiry that the contracts shown to the UN included almost no details at all about the controversial trucking payments.
The evidence came as Foreign Minister Alexander Downer confirmed that he had met AWB officials over its business in Iraq, but he denied that he had discussed details of specific contracts and payments.
Mr Lindberg repeatedly said yesterday he could not recall events put to him by Mr Cole and Mr Agius including evidence of transactions between AWB and Iraqi state agencies related to payments that contravened the UN's ban on cash transactions with Iraq.
The inquiry has been set up by the federal government to find out if any Australian laws were broken by AWB Ltd and two other companies in food-for-oil deals with Iraq between June 1999 and March 2003.
The inquiry is also investigating the role played by the Department of Foreign Affairs and Trade, whose officers regularly liaised with AWB executives over wheat sales to Iraq.
AWB paid $300 million to Jordanian intermediary transport company Alia, which is now known to have been a front for the Iraqi government.
To circumvent UN sanctions banning the sending of cash to Iraq, the Iraqi government forced wheat suppliers to pay anything up to $US55 a tonne, much of it before ships even docked in Iraq, in "trucking" and "after-sales service fees" that were then recovered in full by the shippers from an escrow account at the UN.
The fees covered some 43 UN-permitted wheat shipments by the AWB to the pariah regime over four years.
Commissioner Cole reacted strongly to Mr Lindberg's claim that he did not know where the $300 million finally ended up.
Mr Cole noted that it went "to an instrumentality in Iraq".
When Mr Lindberg agreed, Mr Cole said: "I'm glad you do, as we happen to have the Iraqi bank records."
Mr Lindberg said he could not recall seeing a fax sent in February 2001 by AWB's chartering officer, Coral Allen, telling Alia executive Othman Al-Absi that a ship carrying AWB wheat was being prevented from unloading at Iraqi port Umm Qasr because money had allegedly not been paid.
"Please advise urgently if these funds have been forwarded onto state agents," Ms Allen wrote.
In a series of testy exchanges throughout the day with Mr Agius and Mr Cole, Mr Lindberg regularly answered "I don't know" to questions about how much he and AWB's executives had known about the real arrangements whereby wheat was delivered to Iraq.
Much of the questioning focused on two unusual transactions, one in 2004 whereby AWB helped Gibraltar-based oil company Tigris to recover a $US7 million debt from Iraq by inflating a wheat sales contract between AWB and the Iraqi Grains Board. Tigris was founded by two ex-BHP employees.
The other contract involved the Iraqi government trying to claim $US2 million for supposed iron-filings contamination in a wheat shipment.
Mr Lindberg has described the claim of contamination as a "complete hoax".
Mr Lindberg spent much of the morning answering questions about how much he knew about the iron-filings settlement, prompting Mr Cole at one stage to say: "I'm not here to play with words. I'm here to discover the substance of what happened."
Mr Lindberg said he did not believe the $US2 million settlement, which Iraqi officials wanted to be paid in cash without UN oversight, was ever paid. But after extensive questioning he said he had agreed to the deal himself while on a visit to Baghdad in 2003.
The "Tigris" issue, whereby AWB recovered Tigris's $US7 million by inflating an invoice to the UN, was raised in an AWB board meeting in December 2004, where it was described as a commission to the oil company for helping AWB obtain wheat contracts with Iraq.
Mr Cole several times described the agreement as a sham.
Mr Cole asked Mr Lindberg whether he had told the AWB board that the Tigris arrangement was genuine or whether he told the board what the true arrangement was. He replied by saying he had "recovered a debt".
"Did you tell the board you had recovered the Tigris debt by inflating the contract price of wheat?" asked Mr Cole.
"I believe I did, I can't recall," replied Mr Lindberg. "I knew that was how it occurred."
"Did you tell the board that the UN had not been informed that the inflated price reflected the repayment of debt to Tigris?" Mr Cole continued.
Mr Lindberg said he could not remember what he had said.
Mr Cole also asked him how it was that no internal or external auditor at AWB had ever queried the fact that there was no written contract explaining the $300 million that was paid to Alia for trucking fees.
Alia did not, in fact, own any trucks, the wheat being carted in Iraqi government trucks from the dock at Umm Qasr.
"What sort of control existed?" Mr Cole asked.
Mr Lindberg said that the fees "flowed from the wheat contracts" and that no auditor had ever asked to see the non-existent trucking contract documents.
Mr Lindberg said that he made a trip to New York in late 2005 following the release of the draft report issued by former US Federal Reserve chairman Paul Volcker on the oil-for-food scandal, commissioned by the UN.
Mr Volcker's report noted that more than half of the companies trading with Iraq had entered "kickback" arrangements with the Iraqi government during the program, but stopped short of saying that AWB management knew the money it was paying to Jordanian company Alia was actually being sent on to Iraq in breach of sanction rules.
The inquiry continues.