AWB report in, now for the legal nightmare

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AWB report in, now for the legal nightmare
Deborah Snow and Marian Wilkinson
November 24, 2006

THE wheat exporter AWB is bracing itself for an avalanche of legal woes as Terence Cole, the head of the long-running inquiry into the oil-for-food scandal, hands his report to the Federal Government today.

Tax offences, money laundering, obstruction of Government officials, defrauding the Commonwealth, terrorist financing, breaches of the Corporations Law and criminal offences head a list of possible findings drawn up by senior counsel assisting the inquiry, John Agius, SC.

The company and as many as 17 of its former senior executives were named by Mr Agius as open to possible civil and criminal action in confidential submissions to the inquiry revealed exclusively by the Herald last month. Legal advisers expect many of those findings to be reflected in the final report, to be handed to the Governor-General, Michael Jeffery, at 2.30pm at Admiralty House in Sydney.

Central to Mr Agius's argument was that AWB and its officers deliberately deceived both the Department of Foreign Affairs and Trade and the United Nations about the true nature of the company's relationship with the former Iraqi regime, thereby dishonestly gaining permission to ship massive quantities of Australian wheat under the UN's oil-for-food program.

AWB covertly funnelled nearly $300 million in illegal kickbacks to the regime of Iraq's former leader, Saddam Hussein, between the end of 1999 and April 2003 to secure the wheat contracts.

One potential new problem for AWB could emerge if the Treasurer, Peter Costello, orders a high-powered tax investigation.

The Herald understands Mr Agius has highlighted evidence that the company improperly claimed the illegal kickbacks as tax deductions. While arguing that it was beyond Mr Cole's terms of reference to fully investigate this aspect of the company's conduct, Mr Agius urged that the matter be referred to an "appropriate investigating agency" for further inquiry.

Many executives who stand directly in the line of fire are no longer with the company. The exodus began with the departure



of the former chief executive Andrew Lindberg in February and continued this month with the resignations of the marketing executive Chris Whitwell and the group trading manager Peter Geary. Further resignations are likely in the near future.

Those named by Mr Agius as possibly exposed to criminal charges as accessories include the former AWB chairman and Government confidant Trevor Flugge, two former chief executives, Mr Lindberg and Murray Rogers, and two former international marketing bosses, Michael Long and Charles Stott.

The embattled exporter's board, its lawyers and a former top Howard adviser and troubleshooter, Grahame Morris, have been closeted in emergency meetings on how to handle the fallout from the monumental report, which examines how AWB "loaded up" its wheat contracts to pay the kickbacks. The kickbacks were disguised as trucking fees within Iraq.

The BHP-Tigris affair is also likely to emerge from Mr Cole's final report as one of the most dangerous legal minefields for the company and its lawyers. If Mr Cole accepts Mr Agius's advice, AWB and some of its officers may face charges of money laundering over the way funds were channelled through different accounts to surreptitiously recoup an $8 million loan made to Iraq by BHP. BHP later assigned the debt to Tigris Petroleum, run by two of its former executives.

AWB recouped the loan on Tigris's behalf by inflating two of its Iraqi wheat contracts, reclaiming the money from UN accounts, and then paying it to Tigris as a "service fee".

The Herald understands Mr Agius argues that in concealing these arrangements from the Department of Foreign Affairs and Trade and from the UN, the company and as many as nine of its officers could be in breach of sections of the Victorian Crimes Act dealing with proceeds of crime.

Mr Agius was also highly critical of company executives and internal and external lawyers who later helped recast the Tigris transaction as a "service" to AWB, saying this amounted to "falsely documenting" the transaction. It is understood Mr Agius submitted that a number of the lawyers involved in drafting or settling the deal knew the true nature of the Tigris transaction, which he described as a sham.

He is also understood to have advised Mr Cole that a number of company executives, including Mr Whitwell, Mr Long, the former in-house lawyers Jim Cooper and Rosemary Peavey, the general manager of AWB International Sarah Scales, the former company secretary Richard Fuller and Mr Lindberg, may have committed offences under Commonwealth Corporations Law in relation to the records of the Tigris deal.

Mr Agius also targeted Mr Lindberg and Mr Cooper as vulnerable under section 1309 of the Corporations Act in relation to misleading or deceptive material they might have provided to AWB's board on the Tigris affair.

Mr Cooper left the company in April.

If Mr Cole accepts Mr Agius's recommendations the final report is also likely to be particularly damning of Mr Flugge, Mr Rogers and Mr Lindberg.

Mr Flugge joined the AWB board in 1984 and had become its chairman by the time it went from being a government-owned statutory authority in 1999 to a private company, albeit one controlled by thousands of Australian wheat farmers.

He was voted off the board in March 2002 but remained highly influential behind the scenes, with the Prime Minister, John Howard, appointing him as Australia's senior agricultural adviser in Iraq immediately after Saddam was toppled in April 2003.

Mr Rogers was chief executive from 1998 to early 2000, and was succeeded by Mr Lindberg, who remained in that role until early this year.

In his confidential report, Mr Agius is understood to deal extremely harshly with Mr Flugge. He rejected the former chairman's sworn evidence that he did not know about the kickbacks and believed the "trucking fees" paid by AWB had been approved by the UN.

Mr Agius said that as far back as 1999 Mr Flugge knew the company had done a deal with Saddam Hussein's regime to breach UN sanctions. He noted Mr Flugge had discussed this at an international grains conference in London with the trading company Ronly, shortly before AWB officers hired Ronly to launder the payments to the Iraqis via the Jordanian trucking company Alia. He urged Mr Cole to reject Mr Flugge's plea of "one-sided deafness" to explain why he did not hear the discussion on the Iraqi trucking fees at a dinner with Ronly executives in 1999.

Mr Agius also concluded that Mr Flugge was present when AWB officers discussed the fees with the head of the Iraqi Grain Board in Baghdad in 1999.

He pointed to evidence that the architect of the deal, AWB's Mark Emons, discussed the finer points of the trucking fees with Mr Flugge in April 2000. This was just after Mr Flugge had been told by Australian Foreign Affairs and Trade officials in Washington and New York that the UN was investigating a complaint that AWB was breaching sanctions in Iraq.

If Mr Cole accepts Mr Agius's arguments, and recommends that authorities look at criminal charges against Mr Flugge over the kickbacks, it will be a big embarrassment for the Federal Government. Cabinet backed Mr Flugge for his postwar role in Iraq despite objections from the US. Mr Flugge has also been close to senior National Party figures and once stood as a candidate for the party in Western Australia.

In a signal that the Cole report will find knowledge of the kickbacks went from the top to the bottom of AWB, Mr Agius's final submission, it is understood, also rejects claims by Mr Rogers that he had no knowledge of the trucking fees or ever gave approval for them.

Mr Agius argued to Mr Cole that Mr Rogers was aware that money AWB paid for trucking fees was in breach of sanctions, and that the former AWB chief was told about this before a trip to Baghdad in 1999.

In relation to the financing of terrorism, the Herald understands that Mr Agius submitted to Mr Cole that AWB must have been aware that the funds it provided to Iraq were at substantial risk of being used to "facilitate or carry out" terrorist acts.

He was scathing about AWB's failure to ever ask the Iraqis for justification of the amount of the trucking fees, or demand proof that the fees were used for transportation.

Although the Government will formally receive the Cole report today, the timing of its public release is a matter for the Prime Minister. Industry sources are confident the Government will make the report public early next week.

Even if Mr Cole does find that offences may have been committed, his recommendations will result in charges only if state and federal prosecutors independently find there is sufficient evidence to support them.

http://www.smh.com.au/news/national/awb-report-in-now-for-the-legal-nightmare/2006/11/23/1163871546470.html?page=fullpage#

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Envoy's view was personal: PM
Marian Wilkinson
November 24, 2006

THE Federal Opposition Leader, Kim Beazley, has expressed concern at revelations that the former AWB chairman Trevor Flugge was told of the Government's plans to join military action to overthrow Saddam Hussein more than a year before Iraq was invaded.

Details of Mr Flugge's briefing from Australia's former United Nations ambassador John Dauth were revealed in the Herald yesterday. They were found in confidential AWB board minutes from February 2002 that were released by the Cole inquiry this week.

The minutes record Mr Dauth telling Mr Flugge in New York that "US military action to depose Saddam Hussein was inevitable and that at this time the Australian Government would support and participate in such action".

He also told Mr Flugge he would do his best to give AWB "as much warning as possible" of military action.

Mr Beazley said the minutes revealed that "Mr Howard was prepared to take the Wheat Board into his confidence a year before going to war but not the Australian people".

The AWB minutes undercut long-standing claims by the Prime Minister, John Howard, that the Government had made no decision to join military action against Iraq until 2003. Yesterday a spokesperson for Mr Howard said: "Mr Dauth was expressing his personal view about what might happen."

Mr Dauth's apparently blunt conversation with Mr Flugge revealed Australia's thinking after the September 11 attacks. Mr Dauth continued in his job at the UN, backing US efforts to get the UN Security Council to support the US military action against Iraq.

Despite his intense interest in Iraq, Mr Dauth did not discover that Mr Flugge and AWB were paying kickbacks to the Hussein regime in breach of UN sanctions. Mr Dauth was not called to give evidence to the Cole inquiry.

THE INQUIRY

The Cole inquiry was set up by the Federal Government in November last year to investigate "whether decisions, actions, conduct or payments by Australian companies mentioned in the Volcker inquiry into the United Nations oil-for-food program breached any federal, state or territory law". It was expanded to include BHP Billiton and Tigris Petroleum.


THE CONSTRAINTS

The inquiry advised the Federal Opposition in March that it had no power to investigate whether the Government breached international or domestic laws. Any expansion of the terms of reference was a matter for the Government.

http://www.smh.com.au/news/national/envoys-view-was-personal-pm/2006/11/23/1163871546536.html

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Cole report goes to Government tomorrow
November 23, 2006

The long-awaited report on Australia's biggest trade scandal, wheat exporter AWB's $290 million in kickbacks to Iraq, will be handed to the government tomorrow.

After 75 days of public hearings, 7654 pages of transcript and 1571 exhibits, Commissioner Terence Cole will give the report from his year-long investigation of four companies' involvement in the UN's oil-for-food program to Governor General Michael Jeffery.

The voluminous document, likely to be hundreds of pages long, is expected to recommend a string of charges against current and former AWB executives, and could deliver findings of incompetence which could hurt the Howard government going into an election year.

A UN report on the oil-for-food program 13 months ago found AWB was the biggest provider of kickbacks under the program that was designed to feed Iraqis suffering under UN sanctions, but no direct evidence the monopoly exporter knowingly paid bribes.

The Cole report will go much further, with the inquiry unearthing thousands of emails and documents showing AWB staff set out to deceive the UN and the Australian government, funnelling money to Iraq in breach of UN sanctions.

AWB's "oft-repeated mantra", as counsel assisting John Agius described it on the opening day of the inquiry, was that it was the unwitting victim of an elaborate ruse by dictator Saddam Hussein's government.

Mr Cole, a former NSW Supreme Court appeals judge, is believed to have considered laws against bribing foreign officials and the financing of terrorism - offences which have never been prosecuted in Australia.

The use of counter-terrorism laws was flagged in September amid evidence that some AWB staff knew the illicit payments to dictator Saddam Hussein's government could have been funding atrocities against his own people.

Mr Cole's report is also expected to address government competence after his inquiry heard evidence that ministers and officials missed, largely ignored or failed to fully investigate dozens of warnings about AWB's illicit payments.

Prime Minister John Howard, Foreign Minister Alexander Downer and Deputy Prime Minister and former trade minister Mark Vaile were all called to give evidence at the inquiry, along with a host of public servants - mainly from Mr Downer's department.

The Cole report will be tabled in parliament next week, with Mr Howard expected to move quickly to announce reforms of Australia's wheat export monopoly that will see AWB's power whittled away over time.

Labor will pounce on the report's findings, renewing criticism that the terms of reference handed to Mr Cole hobbled his inquiry by restricting him from making substantive findings against the government.

"Howard government ministers turned a blind eye to at least 35 separate warnings. This was gross negligence on an unprecedented scale," Opposition foreign affairs spokesman Kevin Rudd said.

"Commissioner Cole's terms of reference do not empower him to make findings about whether or not the Commonwealth government acted lawfully and in compliance with its obligations under Australian and international law."

The Cole report will also make findings on the activities of BHP Billiton.

The mining giant was investigated in relation to a wheat shipment it funded to Iraq a decade ago, and the allegedly fraudulent debt recovery process for the deal.

Mr Cole examined the actions of two other Australian companies under the oil-for-food program - Melbourne engineering firm Rhine Ruhr and Queensland pharmaceuticals manufacturer Alkaloids of Australia.

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See no evil
November 18, 2006

The AWB scandal unfolded under the watch of Alexander Downer and Mark Vaile. The two ministers are now bracing for the Cole report - and the inevitable political fallout.



ALEXANDER DOWNER was in full flight. "I've never heard more hogwash than that in the whole of my life!" The Minister for Foreign Affairs was berating Canberra's foreign press corps recently on climate change, Iraq, North Korea and corrupt Solomon Islanders.

He knows in the Pacific they call him "colonialist, arrogant and overbearing". But, he quipped: "Actually, I'm lovely."

It was a rare light moment in a shrill Downer performance. These days, his old jocular persona is a distant memory. Thrown by the implosion of the Bush White House and rocked at home by Terence Cole's probing into the oil-for-food scandal, Downer finds the political ground rapidly shifting beneath him for first time in a decade. And he sounds decidedly uncomfortable.

In public Downer vents his anger on reporters who won't "bring on the truth for at least five minutes in the third quarter and give it a run around". He vents it on Kim Beazley, who wants to "cut and run" from Iraq.

But in private, Downer also vents a little anger about the Prime Minister's most senior official, Dr Peter Shergold.

Shergold, a career public servant with a fondness for bush gardening, persuaded John Howard last November to set up the Cole inquiry into the oil-for-food scandal. And for that, Downer may never forgive him.

The tension between Downer and Shergold over Cole is extremely sensitive within the Howard Government. Insiders say Downer saw Shergold's advice as naive, arguing he failed to recognise the damage it would wreak on the Department of Foreign Affairs and Trade. But Shergold's backers reply that there was no alternative once the UN's Volcker report found that AWB had paid almost $300 million in kickbacks to Saddam Hussein's regime.

Shergold ran through all the options - a police inquiry, public service inquiry and closed door inquiry - but he firmly believed that without full judicial powers to subpoena documents and call witnesses, no inquiry would get to the bottom of one of Australia's worst postwar scandals.

Downer declined to discuss Shergold this week, saying he would make no comment on the Cole inquiry except to attack the media and Beazley for "a series of outrageous allegations" against him. "These will be tested by [the] independent commission of inquiry," he said. The indefatigable Downer had just left Indonesia after signing the Lombok Treaty with his Indonesian counterpart, Hassan Wirajuda, and was meeting the US Secretary of State, Condoleezza Rice, in the poignant setting of Hanoi to discuss the quagmire in Iraq.

But on his return home Downer will confront Terence Cole's weighty report. The still-secret final tome will be handed to the Government on Friday. It will make no findings against Downer or any Government minister. Indeed, Cole will make it clear he had no brief in his terms of reference to investigate their performance. But Downer is expected to announce a major shake-up of his department to respond to criticism in the report. Everything from record management to crisis management is being scrutinised.

The Cole report is expected to lay out in excruciating detail how AWB managed to funnel almost $300 million in kickbacks to Saddam Hussein's regime under the nose of Downer and his department. It will expose evidence of criminal behaviour by AWB executives and managers. But it will also find AWB grossly deceived the Government, and both Downer and Howard will rely on this to clear them of any wrongdoing in the scandal.

Even so, Downer cannot escape the reality that AWB was furiously busting UN sanctions against Saddam at the same time as he and his department were responsible for upholding them.

For this reason, despite Cole's restrictive terms of reference, his inquiry has already bruised Downer. In effect, the inquiry tore down the walls of secrecy that normally shield a government department and its minister. It exposed both to unprecedented and, at times, brutal scrutiny and left them looking incompetent.

Hundreds of documents - ministerial submissions, diplomatic cables, records of embarrassing discussions between Downer and AWB executives - were slapped onto the public record. According to one insider, Downer found his own appearance in the witness box one of the most stressful experiences in his career.

Downer has already been briefed on the voluminous draft submission prepared by Cole's counsel assisting, John Agius, which will be the basis of the final report. The Agius draft prompted the department's lawyers to make lengthy submissions to Cole in the hopes of softening its criticisms. Among them are that DFAT was "cursory" in its approach to enforcing the sanctions against Saddam; that it lost a vital file about AWB's trucking fees which adversely reflected on DFAT; and that individual officers should have read the warning signs. The actions of officers in the Middle East branch, in the Jordanian embassy, in the UN's New York headquarters and on the Iraq taskforce are dealt with in detail.

Many in the department, especially the middle-ranking officers, are still shell-shocked. One long-time officer described the mood as "unsettling and very uncomfortable".

There is also anger in the ranks that the most senior DFAT officers were spared from appearing in the witness box. "They don't point the finger but there is a lot of talk that there is a void in responsibility at the level of secretary and deputy secretary," one officer said. "A lot of the burden of accountability has fallen at the middle level. These are the desk officers, the junior officers who carry the water. The decision-making and the advice does not start and stop at that level in the department."

The middle-ranking officers realise if Cole's final report confirms that criminal charges could be brought against senior AWB figures such as Trevor Flugge and Andrew Lindberg, they will be called as witnesses in criminal trials and subjected to rigorous cross-examination by the defence.

A key chapter in the draft, called "The Knowledge of the Commonwealth", makes it clear that AWB's only real defence to many of the charges is to attempt to establish that departmental officers knew about the kickbacks.

Cole's limited brief was to look for evidence of lawbreaking by AWB, not examine the Government's competence. But there is little doubt that in the months of hearings, he inflicted serious collateral damage not only on the department but on Downer. "There is no doubt it undermined him," said one Liberal backbencher. "The negative question times, the bad publicity, the editorials day in and day out. It can't not have had an impact."

THOSE who have worked closely with Downer credit him with enormous energy and rigour. Even among his opponents in the Liberal party room he has earned respect, if not love. But friends and enemies alike say Downer has one serious weakness as a foreign minister. Behind the sometimes blustering appearance, he is a deeply partisan animal. He passionately embraces a stand and once he does, he and his circle defend it to the death.

As one former close colleague put it: "They take a position, mark out their ground and then defend it very, very vigorously. And often when you're defending it so vigorously, you don't notice the guys behind you have disappeared."

Downer's style was starkly exposed during the Cole inquiry. The paper trail from his office reveals that when AWB was under attack over allegations of kickbacks, Downer chose to accept the company's denials largely at face value and go into bat. "I'm more relaxed about this than they are," he memorably scrawled on a note to his departmental head, Michael L'Estrange, who pointed out AWB had admitted its trucking firm in Iraq was half-owned by Saddam's regime.

Even when the head of the UN inquiry, Paul Volcker, warned in October last year that there was overwhelming evidence against the company, Downer was still accepting AWB's denials and personally advising its executives on how to defend themselves. No one in his department, according to the evidence, offered the frank and fearless advice that AWB executives could be lying.

One month later, Howard had backflipped and set up the Cole inquiry.

Downer's passionate partisanship is in overdrive when he is defending George Bush's strategy in Iraq. In August this year, as a tsunami-like tide of American public opinion was building against the Iraq war, Downer helped fund the fringe neo-conservative commentator Mark Steyn on a speaking tour of Australia. For several colourful days and nights, Steyn delivered humorous polemic diatribes in support of Bush, the war and Downer, calling his patron "my favourite foreign minister".

At a dinner for Steyn co-sponsored by Downer and the new journal The Conservative, the minister was surrounded by his staunch factional allies on the right of the Liberal Party, the Finance Minister, Nick Minchin, and the Minister for Ageing, Santo Santoro. The NSW Liberal apparatchik David Clarke even put in an appearance. Downer basked in Steyn's praise of his "magnificent performance" during question time that afternoon, when Downer damned Opposition calls to pull out of Iraq with the jibe that Beazley's "constant companion is a white flag".

In stark contrast, a few months earlier Downer's estwhile American colleague, the former secretary of state Colin Powell, was telling Bush he was in deep trouble in Iraq. Powell, dumped by Bush in 2004, was invited back to the White House by his old boss to discuss the deepening crisis as Iraq teetered on the brink of civil war.

While Downer and Howard were publicly holding the line in Canberra, Bush was seeking out bipartisan ideas on his clearly failing Iraq strategy. He set up the Iraq Study Group under his father's old adviser, James Baker, and invited Powell and nine other former secretaries of state and defence to brainstorm.

Downer was fully briefed on the shifts in Washington at the time but it has taken months for him to qualify his public rhetoric. This week, in the aftermath of the savage US election swing, Downer acknowledged the White House might consider "adjustments to the tactics" in Iraq.

Bush is expected to announce a significant shift in the structure of US forces in Iraq and their tactics soon. There will be a greater emphasis on securing Baghdad, but the President insists he will not bow to Democratic demands for a timetable on withdrawals.

After their meetings in Hanoi this week with Bush and Rice, Howard and Downer were adamant America's fundamental strategy would not change. That strategy is to train Iraq's military and police forces in order to progressively hand over security to the Iraqis themselves. Downer concedes this works only if the shaky, faction-ridden Iraqi Government can stand up. But as Powell told Bush earlier this year, if Nouri al-Maliki's Government is already falling apart, the coalition will not be building up security forces in Iraq, it will be building up sectarian militias that are slaughtering each other.

SO FAR, Downer's unflinching support for the Iraq war has cost him little politically, but with Bush looking like a lame duck that may change. The decision to go into Iraq deeply split Canberra's elite foreign affairs and defence community. Labor's Kevin Rudd labelled it "one of the most reckless decision in the history of postwar Australian foreign policy". Friendships have been ructured over Iraq, including several of Downer's. Now his critics are again asking Downer to explain why he supported it.

The former Foreign Affairs head Richard Woolcott was once a friend and sounding board for Downer. Two weeks ago he delivered a stinging public attack on the Government's Iraq policy during a speech at Newcastle University. Calling the invasion "a catastrophic foreign and security policy blunder", Woolcott argued that Australia's role had "raised Australia's profile as a terrorist target and … massively accelerated terrorist activities in Iraq itself".

Woolcott was put on Downer's enemies list in 2004 after he signed a letter with 42 other retired government advisers saying Australia's support for the invasion was a mistake. Downer was furious because at the time Woolcott's son, Peter, was working as his chief of staff.

Woolcott questions whether his old department gave frank and fearless advice advice to Downer on the decision to support the US-led invasion. Along with two former Howard Government advisers who spoke to the Herald, Woolcott questioned whether DFAT had produced a comprehensive cabinet submission on the implications of the invasion before the war.

They point to the revelation in the 2004 Flood report on Australian intelligence that the Government's peak intelligence agency, the Office of National Assessments, never produced a comprehensive report on the implications of supporting invasion.

Questioned about this by the Herald, Downer did not refer to any formal cabinet submission or ONA assessment but said: "There was an enormous amount of discussion and analysis of the implications of Australia's participation in the overthrow of Saddam Hussein's regime."

One former adviser closely involved in the Iraq strategy believes whatever the lack of formal reports, Downer and Howard were acutely aware that US plans for postwar Iraq were problematic. This is why Howard insisted on an extremely small Australian postwar military presence in Iraq. "We were conscious it would be a difficult period," the adviser said. "But no one envisaged it would be so bad. And no one expected after four years it would be as bad as it is now."

Downer and Howard are now both "trapped in a dilemma of their own making", Woolcott says. But Howard made it clear this week he could not envisage a US withdrawal from Iraq soon, saying it would do "enormous damage to the reputation, prestige and influence" of the US.

Until this year, Downer's close alignment with Howard and the Bush Administration elevated his stature internationally. Unlike Powell or Blair's former foreign secretary, Robin Cook, Downer prosecuted his Government's policies unflinchingly, seldom taking a backward step. At home, his closeness to Howard enhanced his power in the Government.

BUT some of his factional opponents in the Liberal Party note that Downer is looking weaker. In March, when he was distracted by the AWB hearings, Downer's opponents had a rare opportunity to land a blow. His former senior adviser and close friend, Joshua Frydenberg, made a bold run to challenge the party's leading moderate, Petro Georgiou, in the safe Victorian seat of Kooyong. Downer's perceived intervention in support of Frydenberg created a furious backlash against him. In an extraordinary move, the rival Victorian factions, headed by the Treasurer, Peter Costello, and the former Victorian premier Jeff Kennett, combined to crush Frydenberg.

Downer insists he played no role in Frydenberg's push. "I neither encouraged or discouraged him to stand for the Kooyong preselection and spoke to no delegates at all on his behalf," he told the Herald.

Downer's party opponents dismiss his denials and are still crowing. "He used his prestige on something that was a dismal failure," was how one summed it up.

But those who saw Downer come back from his failed stint as Liberal Party leader don't question his political resilience. He's like a wind-up toy, says one colleague. With L'Estrange, he has already set in train the reforms to answer the Cole report.

Among them is expected to be the hiring of a new phalanx of public relations officers. Which suggests Downer is planning to dig in to defend his territory rather than concede any ground.

The foreign affairs cables
January 13, 2000 Australia's UN mission in New York says the UN is warning that AWB could be paying kickbacks to Saddam Hussein in breach of UN sanctions.

January 18, 2000 Canberra responds, declaring "we think it unlikely … AWB would be involved knowingly" in kickbacks.

March 10, 2000 New York advises that despite AWB assurances, there is still a "question mark" over its dealings with Baghdad.

March 11, 2000 Austrade in Washington expresses its concern over AWB's reluctance to provide more material to New York and says the Trade Minister should be advised.

March 17, 2000 Canberra advises that the UN concerns will be addressed with AWB executives the following week.

March 22, 2000 Canberra tells New York and Washington that AWB stands by its view there is nothing untoward in its Iraqi wheat contracts.

June 23, 2003 Baghdad embassy reveals that an energetic US captain has sifted through the oil-for-food contracts and found that "every contract since Phase 9 included a kickback to the regime from between 10 and 19 per cent".

August 19, 2004 Washington embassy warns that US Senate committee is on the hunt for incriminating documents, declaring "it is in the interests of both the AWB and the Government to remain in close contact on the issue".

The Cole inquiry
Set up by the Federal Government in November 2005 and due to report next Friday. Terence Cole, QC, is inquiring into "whether decisions, actions, conduct or payments by Australian companies mentioned in the Volcker inquiry into the United Nations oil-for-food program breached any federal, state or territory law". The inquiry was expanded to BHP-Billiton and Tigris Petroleum.

http://www.smh.com.au/news/national/see-no-evil/2006/11/17/1163266787627.html?page=fullpage#contentSwap2

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AWB report passed to Governor-General
November 24, 2006 - 6:09AM

The head of the AWB Iraqi kickbacks inquiry has handed the final report on his investigation into the scandal to Governor-General Michael Jeffery.

Mr Cole presented his five volume-report during a short ceremony at Admiralty House, the governor-general's harbourside residence in Sydney, around 2.45pm (AEDT).

"Governor, I have the honour to present you my report," Mr Cole said as he handed over the hefty bundle.

The two men then posed for photographs in Major General Jeffery's study.

The delivery of the report will allow the government to table the report in parliament next week.

Until then, Mr Cole's findings about the $290 million oil-for-wheat bribery scandal will remain secret.

Mr Cole's report is expected to recommend a string of charges against current and former AWB executives, and could deliver findings of public service incompetence which could hurt the Howard government going into an election year.

The long-running inquiry heard evidence that ministers and officials missed, largely ignored or failed to fully investigate dozens of warnings about AWB's illicit payments.

AWB has claimed it was the unwitting victim of an elaborate ruse by the corrupt government of Saddam Hussein.

But Mr Cole is expected to find that a large number of senior AWB staff knew the illicit payments breached UN sanctions in force against Iraq, and that AWB deceived the Australian government and the United Nations.

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AWB to be sued by shareholders
November 23, 2006 - 12:59PM

A US lawsuit claiming up to $US1 billion ($1.29 billion) in damages from AWB is on hold, but a shareholder class action against the disgraced wheat exporter is set to be filed in Australia within a month.

The US case, which will rely on American laws designed to crack down on organised crime, has been withdrawn from the US District Court in Washington DC for fine tuning, one of the lead solicitors in the action said.

It could be refiled in another jurisdiction - possibly the same American court where AWB is facing another lawsuit relating to sales of soybeans to Indonesia three years ago.

"We just did a voluntary dismissal and the reason we did it was to finalise a few more details," Washington lawyer Palmer Foret said.

"It will be refiled in the not too distant future."

The move gives AWB some breathing space as it braces for the likely damning findings of the Cole inquiry into the $290 million in kickbacks the company paid to the former Iraqi regime of Saddam Hussein under the corruption-ridden UN oil-for-food program.

But the legal mire enveloping the company deepened today when Australian law firm Maurice Blackburn Cashman confirmed it was close to launching a shareholder class action against AWB.

The action could be filed in the NSW Supreme Court before Christmas.

"I think there's every likelihood that it's going to be filed before the end of the year," a spokesman for the firm said.

Lawyers are waiting on the final report of the Cole commission - due to be handed to the federal government tomorrow - which is likely to recommend criminal charges against current and former AWB executives.

The case will seek damages for shareholders' losses after AWB's share price sank to record lows this year, wiping more than $1.3 billion off the company's market value since the Cole inquiry began in mid-January.

The US class action - led by six wheat growers mainly from Kansas - was filed in July, claiming AWB used bribes and other corrupt practices to lock them out of grain markets including Iraq.

The lawsuit uses the Racketeer Influence and Corrupt Organisations Act, US legislation that was designed to target the mafia and outlaw bikie gangs.

Mr Foret denied the class action had failed due to lack of evidence, or that it was an attempt to search for a less conservative jurisdiction and find a more favourable judge.

Postponing the case would also allow lawyers and plaintiffs to digest Commissioner Terence Cole's final report.

"In addition to other areas we're looking at, we want to see what the final report has to say," Mr Foret said.

"Although so far, what's been gathered and obtained by the Cole commission has been very helpful to our efforts.

"I think the Cole commission has uncovered that it's absolutely certain that there were bribes being paid by the AWB to Iraq, and I think we have a very strong case on that."

It was possible the case could be refiled in the US District Court in New York state, where AWB is being sued by Standard Chartered Bank (SBC) in the soybeans case, Mr Foret said.

The complex case involves a series of transactions in 2003 and 2004 when AWB sold US soybeans to buyers in Indonesia using the US Department of Agriculture's Supplier Credit Guarantee Program.

http://www.smh.com.au/news/business/awb-to-be-sued-by-shareholders/2006/11/23/1163871527719.html

[malleefarmer]

Flugge,Stott and lindberg are the heads most are calling for in that order.
Sarah scales is actually the pools manager and i wasnt aware she was in the firing line as well until iread your first article.
I will have a summary of events most nights if people want me to post it with a pro change bias in it.
Even the stoutest single desk monopoly supporters have jumped from the good ship AWB i would suggestless than 10% support now. there grain prices posted each day are usually $20 behind everybody and nobody is pooling grain as cash is king in drought years.
All wheat at the minute is $245 on farm flat no increments and will have $50-80 frieght on top to get to the enduser,so prices have come back somewhat
regards

[craig]

TOM4CWB
your above postings are more than enough for a made for T.V. movie. Please forward them all to senators reviewing freedom of imformation and the CWB.

[TOM4CWB]

Craig;

Here are the Cole inquiry testimony about the "Canadians"!

[TOM4CWB]

Posted above in "Cole Testimony about CWB"