AWB and Iraq: How Howard waged a war for corporate profit

December 1, 2006

As was widely expected, the year-long Cole inquiry, while finding that Australian monopoly wheat exporter AWB Ltd deliberately concealed from the UN $290 million in bribes it paid to Iraq in 2000-03 to secure wheat contracts, cleared PM John Howard and his ministers of any wrongdoing.

On November 27, commission Terence Cole's 2000-page report was tabled in the federal parliament. Cole recommended that a taskforce be set up to investigate whether criminal charges should be brought against a dozen former AWB executives.

"There is no evidence that any of the prime minister, the minister for foreign affairs, the minister for trade or the minister for agriculture, fisheries and forestry were ever informed about, or otherwise acquired knowledge of, the relevant activities of AWB", Cole declared in his report.

What he left unsaid was that this was because — despite repeated warnings over several years from UN, Canadian, US and Russian officials that AWB was gaining contracts through bribes — these ministers had simply accepted AWB's denials without further investigation.

Cole also dismissed the allegation of ministers or government bureaucrats "turning a blind eye" to these repeated warnings about AWB's illegal activities with the following convoluted explanation: "Events and circumstances do not necessarily build on preceding events or circumstances so as to magnify or render more important the second or later event or circumstance ... An event regarded as resolved or satisfactorily explained or answered may not have the necessary currency at the time of the happening of the later event for it to be appropriate to associate the two."

Despite Cole's whitewash of the Howard government's role in the AWB wheat-for-bribes affair, evidence presented before his inquiry has demonstrated that the March 2003 US-British-Australian invasion of Iraq was fundamentally about securing Western corporations control over Iraq's markets and oil resources.

For Washington and London, the invasion and occupation of Iraq was primarily aimed at installing a puppet Iraqi government that would once again open up Iraq's oil reserves — nationalised by the Baathist regime in 1972 — to be exploited by the big US and British oil corporations (Exxon, Shell, BP and Chevron). Iraq's oil reserves, among the world's cheapest to exploit, are believed to be potentially larger than those of Saudi Arabia.

Protecting AWB's domination of the Iraqi wheat market from its US corporate competitors was a key factor in Canberra's decision to participate in the US-led invasion.

Documents released by the Cole commission on November 23 revealed that a year before the US-led invasion of Iraq, Trevor Flugge, the then AWB chairperson, had been told by John Dauth, then Australia's UN ambassador, that Canberra had secretly agreed to participate in a US-led invasion and occupation of Iraq.

Letters released by the Cole inquiry in January revealed that Howard had told AWB chief executive Andrew Lindberg in July 2002 that the government and the company had to remain in close contact as they tried to ensure Australia continued to gain the lion's share of Iraq's wheat contracts under the UN's oil-for-food program.

In what was widely recognised as a pay-off for Canberra's participation in the US-led "coalition of the willing", two former AWB executives were appointed to the US-dominated Coalition Provisional Authority, which oversaw the initial stages of the occupation. Flugge was appointed the CPA's "senior adviser" for agriculture, while another former AWB executive, Michael Long, joined the CPA under an AusAID program.

They ensured that despite Washington's appointment of Dan Amstutz, a former senior executive of the US Cargill Corporation, the world's largest grain exporter, to lead the CPA's agricultural section, US wheat exporters found it impossible to gain the same access to Iraqi wheat contracts as AWB.

These US wheat exporters hit back by pressing Washington to investigate long-standing allegations of Iraqi-AWB corruption — though the bribes paid by AWB to Iraq had all come out of a US-controlled UN account that held money derived from Iraqi oil sales.

Amid escalating US denunciations of corrupt dealings under the oil-for-food program, UN secretary-general Kofi Annan was forced to set up an inquiry, headed by former US Federal Reserve Board chief Paul Volcker, in April 2004.

As the biggest corporate "rorter", AWB could not escape Volcker's attention — though in his final report, released in October 2005, as gesture to Canberra's continuing support for the US-led occupation of Iraq, Volcker tried to shield AWB as much as possible by suggesting that AWB executives might have "unwittingly" paid the kickbacks to Iraq.

Howard's decision to establish the Cole inquiry was part of an effort to head off moves in the US to more thoroughly investigate the AWB scandal, with potentially more damaging consequences for the corporation and the government.

An indication of what might be revealed by a more thorough investigation was provided by testimony given to the Cole inquiry in February by Mark Emons, AWB's Middle East sales manager until the middle of 2000. He stated that the Iraq kickbacks were part of a "culture" of regular bribes made by AWB to Third World governments to secure Australian wheat sales.

The Cole inquiry's findings came as pressure mounted on Howard to end Australia's participation in the bloody occupation of Iraq. Two days before Cole released his report, Major Peter Tinley, a former senior member of the Australian SAS who served as deputy commander of the Coalition Special Forces Task Group set up to control western Iraq after the US-led invasion, denounced the war as "immoral" and called for the immediate withdrawal of coalition troops.

Interviewed in the November 25 Australian, Tinley said: "This war duped the Australian Defence Force and the Australian people in terms of thinking it was in some way legitimate."

The Australian reported that, "During war planning with US and British special forces at Fort Campbell, Kentucky, in 2002, Mr Tinley says he never saw any hard intelligence that Saddam Hussein's regime possessed weapons of mass destruction".

"When I pressed them [US intelligence] for more specific imagery or information regarding locations or likely locations of WMD they confessed, off the record, that there had not been any tangible sighting of any WMD or WMD enabling equipment for some years", Tinley said.

Speaking on ABC TV's November 27 Lateline program, Tinley said: "I think the reasons that we went to war in Iraq were baseless. The government sent us there under the idea of looking for weapons of mass destruction and they gave us the impression that there was a clear and imminent danger of them being used. We now know through our own tactical search on the ground in Iraq and certainly from the Iraq Survey Group, that that was not true at all ...

"The reasons for going to war were wrong. It was morally bankrupt, the whole notion of us being there, so the pretext is wrong. If that's the case, then we need to take good, hard, courageous decisions now to get out and get out whilst we can. This war will drag us in further and further. It's a civil war and the power vacuum that was created as a result of this invasion is clearly at the feet of this government."

In October, a team of Iraqi physicians, whose work was overseen by US epidemiologists at the Johns Hopkins University's Bloomberg School of Public Health, published a study in The Lancet, a prestigious British medical journal, estimating that the US-led war in Iraq has cost the lives of 655,000 Iraqis.

On November 23, the United Nations Assistance Mission for Iraq (UNAMI) reported that the US-led occupation has turned Iraq into a giant slaughterhouse, with 7054 Iraqi men, women and children being violently killed during September and October alone.

"The civilian population of Iraq", UNAMI reported, "continues to be the victim of terrorist acts, roadside bombs, drive-by shootings, [US-led] military operations, police abuse, kidnappings, common crimes, and cross fire between rival gangs or police and insurgents. The security environment, marked by sectarian intolerance and prejudice, further erodes the freedom to worship or manifest one's religion or to express thoughts. Growing unemployment, poverty, discrimination and diminishing access to basic services undermine socio-economic rights."

While the Howard government argues that the immediate withdrawal of the 160,000 coalition troops (of which Australia contributes 500) would lead to an escalation of the bloodshed in Iraq, that is not the view of ordinary Iraqis. The September 27 Washington Post reported that a survey conducted for the US State Department found that in Baghdad "nearly three-quarters of residents polled said they would feel safer if US and other foreign forces left Iraq, with 65% of those asked favoring an immediate pullout".

The Post's report added that interviews with "Baghdad residents in recent weeks suggest one central cause for Iraqi distrust of the Americans: They believe the US government has deliberately thrown the country into chaos ... to create an excuse to keep its forces here."

This was confirmed by a poll conducted during September 1-4 by the University of Maryland's Program on International Policy Attitudes. The PIPA poll found that an "overwhelming majority" of Iraqis "believe that the US military presence in Iraq is provoking more conflict than it is preventing". This view was held by 82% of Iraqi Shiites and a near-unanimous 97% of Sunnis.

The PIPA poll also found that 61% of Iraqis approved of attacks on US and other foreign occupation troops — up from 47% in January. Support for attacks on US forces among Shiites had risen from 41% in January to 62% in September. Support for such attacks among Sunnis was 92%, up from 88% in January.

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