Government cleared in AWB inquiry

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An inquiry has cleared the Australian government of involvement in bribes allegedly paid to Iraq's former regime.

But it said that some officials from the monopoly body controlling wheat exports could be liable to prosecution.

The Australian Wheat Board (now known as AWB) is accused of paying $200m to Saddam Hussein to secure a contract under the UN oil-for-food programme.

PM John Howard said he would "urgently review" Australia's wheat exporting system in response to the findings.

AWB was the largest single supplier of humanitarian goods to Iraq under the UN programme, which ran from 1996 to 2003.

Damaged reputation

The commission examining the AWB scandal was established in January, after a UN report said the company had paid huge bribes to secure wheat contracts worth more than $2bn.

The wheat supply was part of a UN programme designed to allow Iraq to use money from oil exports to buy food and medicine, to relieve suffering caused by international sanctions before Saddam Hussein's regime was overthrown in 2003.

Former judge Terence Cole and his team spent 11 months examining whether AWB had broken any Australian laws over the payments, which were mostly given as transport fees to Jordanian haulage company Alia.

They made their conclusions public on Monday, saying in the introduction to their report that "AWB has cast a shadow over Australia's reputation in international trade".

The report recommended that a police task force be set up to consider whether criminal charges should be filed against AWB members implicated in the scandal - a suggestion Mr Howard promised to take up.

Mr Cole cleared the Australian government of wrong-doing, saying: "I found no material that is any way suggestive of illegal activity by the Commonwealth [federal government] or any of its officers."

But opposition politicians are still not convinced, describing the affair as the country's "biggest-ever" corruption scandal.

They have accused the government of negligence, for failing to respond to diplomatic cables that warned that the wheat exporter may have been violating UN sanctions.