Australian Government Begins AWB Investigation

Iraq is now the second largest U.S. wheat buyer with end of UN Oil for Food program. Compiled by staff 

Published on: Nov 10, 2005

Thursday morning the Australian government announced an inquiry that will investigate the Australian Wheat Board's (AWB Ltd.) illicit payments that ended up as kickbacks to Saddam Hussein’s regime during the Oil for Food scandal. A UN independent committee issued a report on October 27 that showed that AWB accounted for more than 14% of the illicit payments made to Iraq in connection with the humanitarian purchases under the UN Oil for Food program.

During the last years of the UN Oil for Food program, Australia commanded the lion's share of Iraqi wheat business. With last week's Iraqi purchase of 800,000 metric tons of hard red winter wheat, Iraq is now the second largest buyer of U.S. wheat with 1.87 million tons of U.S. wheat sales in 2005/06. That is Iraq's highest level of U.S. wheat imports, ever, since at least 1963. The most wheat that Iraq imported from the U.S. within one marketing year was 1.17 MMT in 1983/84.

Australian politicians from the opposition party made daily demands, over the last week, for action on the wheat board.

"This is the biggest scandal we have seen in this parliament for a decade - $300 million to the Iraqi dictator," says opposition foreign affairs spokesman Kevin Rudd. "We intend to expose the truth. A royal commission with full powers of investigation is the only means by which that truth shall be attained."

Richard Norris, the last independent auditor of AWB, will testify at the inquiry into the Iraqi wheat sales scandal.

USW has recommended that the monopoly be barred from the U.S. futures markets as well as from any further access to the U.S. government credit programs. USW also recommends that AWB be prohibited from using any U.S. Export-Import Bank programs, particularly for wheat sales to Iraq.

Except for during the last years of the Saddam Hussein regime, the Iraqi market has historically been highly competitive. The U.S. garnered up to a half of the Iraq market share in the 1970s and 80s, but Australia controlled the Iraqi wheat business when the U.S. was absent from the market in the 1990s and especially during the last years of the UN Oil for Food program.