Posted: March 25, 2006
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AWB dumped apology plan

The Herald Sun, March 25, 2006

AWB drew up a tell-all strategy late last year to explain how and why it had been drawn into paying kickbacks to Saddam Hussein’s regime.

But its board junked the plan, deciding to go to the Cole Commission professing ignorance and innocence instead.

An internal document, released at the inquiry yesterday, revealed that AWB had hired a corporate crisis expert to handle the fallout of the United Nations’ Volcker report.

The UN report labelled the wheat exporter as the worst international sanctions-breaker.

Prime Minister John Howard conceded for the first time yesterday that two of his most senior ministers were “in the firing line” over the AWB scandal.

Foreign Affairs Minister Alexander Downer has been accused of initially stone-walling the UN inquiry by refusing to let it interview officials of his department.

And Trade Minister Mark Vaile has been accused of failing to act on warnings about kickbacks.

“I do not believe on what I have seen that either of those men – and they’re the two people principally in the firing line, if I can put it like that – either of them has been culpable,” Mr Howard said yesterday.

Three months after the UN accused AWB of paying almost $300 million in kickbacks, AWB hired crisis expert Peter Sandman, according to company secretary Dr Richard Fuller.

In December, Mr Sandman drafted an apology to the Australian people in which AWB owned up to its shady dealings in Iraq.

“(Mr Sandman) had a thesis to over-apologise – to apologise for things that had happened, and go further than was necessary – and this was in the interests of the corporation to do that,” Dr Fuller said.

But the apology was scrapped by former managing director Andrew Lindberg and the board, according to Dr Fuller.

Mr Lindberg, who has since resigned, has already told the commission he had no knowledge of kickbacks to Iraq or of the sham Jordanian trucking company, Alia, used to funnel them to Saddam’s regime.

He is expected to be recalled to the inquiry.

Until yesterday, AWB lawyers had managed to keep the apology document secret on the basis of arguments of legal professional privilege.

Also yesterday, the former head of BHP, John Prescott, rejected a suggestion from Commissioner Terence Cole, QC, that a $5 million wheat shipment to Iraq, paid for by BHP, was a “soft bribe”.

“I don’t see it that way at all, Commissioner,” Mr Prescott said. “I think it was quite clear that we were seeking to build our standing there.”

Mr Prescott, a 40-year veteran at BHP, said the $5 million gift was a “modest transaction”.

He said he had initially had reservations about sending wheat to Iraq.

“I formed a view that I wasn’t confident we were ever going to get our money back,” he said.

Mr Prescott was giving evidence about how the 20,000 tonne “gift” of wheat, delivered to Iraq by AWB in 1996, later turned into an illegal loan.

The inquiry continues.

Copyright © 2006 by The Herald Sun and Weekly Times

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