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CANBERRA - The Australian Government is likely next week to face a barrage of criticism over the oil-for-food scandal that has cost the nation the big Iraqi wheat market and threatens the future of its monopoly grains trader.
Although the report of the inquiry into the scandal is understood to have cleared senior Government ministers and officials of complicity, Commissioner Terence Cole is believed to be highly critical of Canberra's failure to heed warnings of wrongdoing.
Cole handed the report to Governor-General Michael Jeffery yesterday. It will be tabled next week.
The report's conclusions and recommendations are secret but the tenor of the inquiry and the nature of the evidence presented during the 75 days of hearings point to serious flaws in Canberra's oversight of grain trader AWB's dealings with the regime of former Iraqi dictator Saddam Hussein.
AWB paid about A$290 million ($335 million) in kickbacks to Iraq to obtain wheat contracts under the United Nations' corruption-ridden oil-for-food scheme, set up to allow essential humanitarian supplies into the country during the trade embargo imposed after the first Gulf War.
The payments were funnelled through a Jordanian trucking company established as a front by the regime, and continued as Australia was preparing to join the United States and Britain in invading Iraq.
They were publicly exposed in a UN inquiry into the oil-for-food scandal, unleashing a long series of revelations damning the AWB and its senior management and seriously embarrassing the Government.
As a result, the AWB lost the Iraq market at a cost of hundreds of millions of dollars, and is likely to lose its long-held monopoly as single-desk exporter of Australian wheat.
The Cole report is likely to recommend prosecution of a number of senior AWB officials, including former chairman Trevor Flugge, later appointed by Prime Minister John Howard as the Government's senior agricultural adviser in Baghdad.
The list of possible charges includes breaches of federal criminal law, fraud and obstruction of Government officials and money laundering.
Yesterday the Sydney Morning Herald said a confidential report by senior counsel assisting the inquiry, John Agius SC, also raised the possibility of tax offences after evidence that AWB had improperly claimed the kickbacks as tax deductions.
The newspaper said the Agius report further suggested possible offences under anti-terrorism laws, because the AWB must have been aware that the funds it provided to Iraq were at substantial risk of being used to facilitate acts of terrorism.
Cole's report is expected to criticise key ministers and senior Foreign Affairs officials for failing to recognise and pursue indications that AWB was illegally breaking UN sanctions and was among those being investigated by the UN for paying kickbacks to Saddam's regime.
Those likely to be in the firing line include Foreign Affairs Minister Alexander Downer and former Trade Minister and Deputy Prime Minister Mark Vaile. Evidence to the inquiry repeatedly pointed to signals that AWB was flouting the sanctions, but ministers and government officials accepted the company's assurances. It is understood that Cole has not accepted suggestions of Government complicity in the AWB kickbacks.
The Labor Opposition has maintained the Government either knew that AWB was breaching UN sanctions, or was incompetent for failing to follow widely circulating rumours.
Howard said yesterday he had not seen the report and that he would not comment on its contents until it was made public. "When I do get it ... I will be obliged not to say anything about its contents until it is tabled in parliament early next week," he said.
Downer also refused to speculate on the contents of the report, but appeared confident that the Government would escape condemnation.
"Everyone will be able to read it, so all of the theories that people have - will all be transparent for people to see," he said.
