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Iraq scandal may still hit Aus
28/11/2006 09:17 - (SA)
Canberra - Former executives' likely trials and further US congressional inquiries mean the Australian government may not yet be free of a scandal over wheat export kickbacks to Iraq's former dictatorship, analysts said on Tuesday.
Former Judge Terence Cole said on Monday he found no evidence of wrongdoing by government officials in his months-long investigation into the kickbacks, but recommended police investigate 11 former executives from AWB Ltd - Australia's monopoly wheat exporter - and a 12th from another company.
Prime Minister John Howard welcomed the government-commissioned report as vindication of his administration's role in what the opposition Labour Party described as the worst scandal in the Australian federal government's 105-year history.
Cole found executives of the wheat exporter - formerly the state-owned Australian Wheat Board - had hidden from the United Nations and the Australian government about $220m in kickbacks to Saddam Hussein's regime.
However, Cole made no adverse finding against the government over repeated e-mail warnings to government officials that AWB's activities may have breached UN sanctions against Iraq.
Elections
Opinion polls during Cole's inquiry did not indicate the scandal was harming Howard's centre-right government, even during unprecedented testimony by senior ministers.
But federal elections are due next year, and the fallout from Cole's inquiry is expected to drag on for many months.
"The government should not be able to get away with saying, 'None of this was our fault,' but whether they do is another matter," said Michael McKinley, a political scientist at the Australian National University.
McKinley said the likely prosecutions of AWB executives were a potential danger for the government and bureaucrats, since they could reveal new evidence about shady deals not unearthed by Cole. McKinley predicted any prosecutions could drag throughout next year.
Former AWB chairperson Trevor Flugge, one of the executives facing charges, told friends he "will not go alone" to prison - suggesting he is prepared to implicate others - The Weekend Australian newspaper reported last week.
Flugge was not immediately available for comment.
US investigation
Further bad news for Howard could come from another quarter, with US senators indicating they would use Cole's report to bolster investigations into whether AWB's actions in Iraq had harmed American interests.
The United States and Australia compete fiercely in world wheat markets.
"We should have a better opportunity next year to get the facts out on the table and examine the extent of corruption in AWB's dealings under the United Nations oil-for-food programme," said US Democratic senator Tom Harkin, who will likely chair the senate agriculture committee after the next US congress convenes in January.
- AP
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