Australian Denies Oil-for-Food Involvement

SYDNEY, Australia – Australia's foreign minister on Sunday denied U.N. accusations his department was involved in alleged kickbacks paid by the country's monopoly wheat exporter to Saddam Hussein's regime.

Alexander Downer will testify Tuesday at an inquiry into kickbacks allegedly paid by the Australian Wheat Board, now known as AWB Ltd., to Saddam via a Jordanian trucking company.

"The suggestion that somehow people in my department were involved in some kind of a conspiracy with AWB Ltd. to break the laws of Australia, or international law, is absolutely preposterous," Downer told the Nine television network.

Downer said there has been no evidence "anybody in my department has either been involved in a conspiracy or ... deliberately turned a blind eye."

On Monday, Trade Minister and Deputy Prime Minister Mark Vaile is to tell retired Judge Terence Cole, who is heading the government-ordered inquiry, what he knows about the unfolding scandal.

Cole launched the probe in January after a U.N. report last year accused AWB of having funneled $220 million into Saddam's coffers through the trucking company, known as Alia, to secure lucrative grain contracts.

AWB was the largest supplier of humanitarian aid to Iraq under the oil-for-food program, selling 6.8 million tons of wheat to Baghdad and receiving payments from the United Nations of more than $2.3 billion in 1997-2003.

In February, AWB managing director Andrew Lindberg resigned amid mounting evidence suggesting he and some of his senior colleagues approved, and later tried to cover up, AWB's dealings with Alia.

Since then, attention has turned to how much the government of Prime Minister John Howard — a key U.S. ally — knew about the alleged corruption.

Witnesses have testified that diplomats in Iraq sent Australia's government a string of cables in the last six years warning of claims that AWB possibly paid kickbacks to Saddam.

Under the oil-for-food program, which ran from 1996 to 2003, Iraq sold limited and then unlimited quantities of oil, provided that most of the money went to buy humanitarian goods. It was launched to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait.

But Saddam, who could choose the buyers of Iraqi oil and the sellers of humanitarian goods, corrupted the program by awarding contracts to — and getting kickbacks from — favored buyers.