Pakistani officials got $8 million kickbacks from Australia

Australia’s wheat exporter paid millions of dollars in kickbacks to Pakistan, Indonesia and Yemen before it became embroiled in the illicit payments to Saddam Hussein’s regime in the oil-for-food scandal, according to two former employees.
Describing a system of kickbacks for contracts within the Australian Wheat Board when it was still under government control in the 1990s and after it was privatised in 1999 to become AWB, one former employee with direct knowledge of the payments said bluntly, “The culture of the organisation was: get the job done”, according to a The Sydney Morning Herald report. According to the former employees, who asked not to be named, the largest kickbacks before Iraq were paid in the 1990s to Pakistan, where up to $8 million was paid in one year to a local agent who would pass on payments to officials in the Ministry of Food and Agriculture.
“Basically, the officials in Pakistan, in the Ministry of Food and Agriculture, wanted to get a kickback on this type of business and AWB were given a third party to deal with. So funds were transferred into this third party’s account,” a former employee said. “We would transfer US$4 a ton. That would be transferred to the officials and whoever else was needed to make sure the business flowed smoothly. We were not given the names to whom he was transferring the money. We left it up to this guy who was professional in what he did.” A second employee told the newspaper the agent in Pakistan would arrange an annual memorandum of understanding between the wheat board and the ministry and set the price and the commission before a contract was signed.
“If we were shipping to Pakistan, we would have made sure we were looking after people in the ministry,” he said.
Both former employees believe the kickbacks were known to individuals at senior levels of the AWB.
“This was not looked on as something that was bad,” said one. “It meant you could get more money for that wheat, so what’s your problem? Culturally that’s the way the organisation worked.”
Both the Pakistani and Indonesian kickbacks were reviewed in 2000 after the government passed new laws making it a criminal offence to bribe foreign officials anywhere in the world to win or retain business. AWB held internal meetings with a law firm and the anti-corruption organisation, Transparency International, to brief employees on the anti-bribery laws.
The new claims will bolster calls by the opposition foreign affairs spokesman, Kevin Rudd, for a royal commission into the AWB and the Iraq oil-for-food scandal.
The Cole inquiry was forced on the government after the UN’s inquiry, led by Paul Volcker, found that AWB Ltd had paid more than US$220 million in illegal fees on its wheat contracts to Iraq. The payments were channelled to Saddam’s regime in contravention of the UN sanctions against Iraq.
AWB executives, including Andrew Lindberg, managing director since 2000, have repeatedly denied any knowledge that the payments made for trucking services to a Jordanian company called Alia were being channelled to Saddam’s regime. The trucking fees leapt from about US$12 a ton to more than US$45 a ton in two years.
The Volker report said it was unable to find “sufficient” evidence that AWB directly knew the payments were kickbacks to the regime but there were “numerous documentary and circumstantial warning signs” that the trucking payments were “in whole or in part for the benefit of the [then] government of Iraq”.
Murray Rogers, who served as chief executive from 1997 to 2000, declined to comment, saying it was up to Mr Cole whether he examined the new claims. AWB had no comment yesterday.
Australia’s opposition Tuesday called for a wider inquiry into the country’s monopoly wheat exporter following a new claim that it paid kickbacks to Pakistan, Indonesia and Yemen.
A spokesman for the AWB said that the latest allegations were likely an attempt by those with a “vested interest” to damage the company’s reputation. “The current culture at the company is one based around performance, maximising returns for wheat-growers and also performance regarding shareholders,” Peter McBride said.
Opposition Labour Party spokesman Kevin Rudd said the allegations demonstrated the need for an inquiry to be widened beyond whether any Australian companies broke domestic laws in their oil-for-food dealings.
Rudd said the inquiry’s terms of reference “not only exclude the government’s actions in itself, but also may exclude these earlier operations by the wheat board as well. That is what we are concerned about.”
AWB spokesman Peter McBride said; “We operate in 40 countries with over 100 customers to the benefit of the Australian wheat farmer and the organisation always strives to act ethically and properly.”
A spokesman for Deputy Prime Minister and Minister for Trade, Mark Vaile challenged the newspaper’s sources to present their evidence openly.
“If anyone has evidence of a breach of federal law, then they should refer the matter to the appropriate authorities, and that includes the Australian Federal police,” he said.

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