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At least now we know …

February 22nd, 2006
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  1. Waratah
    February 22nd, 2006 at 18:54 | #1

    Shouldn’t the gobinmint hang over this?

  2. February 22nd, 2006 at 20:49 | #2

    Waratah: they should hang no higher than the companies who have stuff on the shelves of Coles/Woolies/Safeway. Those people must pay a “fee” to merely get shelf space.

    In fact to get into my liquor catalogue wine companies must pay $3,000 per bottle listed. Perhaps the bosses of Penfolds should be hanged also?

  3. wilful
    February 22nd, 2006 at 21:33 | #3

    No SATP, there’s more than a little bit of difference between a government endorsed monopoly bribing an evil dictator and marketing at the two big retailers.

  4. February 22nd, 2006 at 21:58 | #4

    You have the wrong end of the stick Wilful, both are a shakedown of a vendor by a purchaser.

    To summarise your post, it is okay to pay bribes if the recipient is not killing people?

  5. jquiggin
    February 22nd, 2006 at 22:03 | #5

    SATP, we might differ on the case when the recipient is not killing people, but I would have thought we might agree that it is not okay to pay bribes if the recipient *is* killing people.

    I suppose a really hard-nosed realist would take the money and walk away from the table, but if Howard is that realist why has he spent a billion dollars and risked Australian lives to get rid of the very regime he# was bribing to buy our wheat?

    # Having played the realism card, please don’t come the raw prawn and suggest that Howard didn’t, by winks and nods, order the payment of the bribes.

  6. Waratah
    February 22nd, 2006 at 22:56 | #6

    Pub Steve I’m familiar with business co-funding and placement deals and various other perks. This is a different kettle of fish because companies buying product placement on shelves and in catalogues are at least spending their own money (marketing and sales budget); and because of the material difference of human rights. The govt knew funds were being misappropriated, the UN drew attention to the issue, yet the govt continued to allow $$ to be channelled to an ‘evil’ regime, the same ‘evil enemy’ we’d put soldiers up against.

  7. Michael H
    February 22nd, 2006 at 23:08 | #7

    This is what Mark Vaile (in August 2002) had to say after AWB successfully managed to maintain wheat sales to Iraq after Saddam had threatened to stop them;
    “The outcome achieved in the quality dispute with Iraq has vindicated the Federal Government’s faith in the AWB to successfully manage their commercial dealings with the Iraqi Grains Board,”

    Iraq agreed to pay a higher price for AWB wheat as a result of Iraq’s supposed concern over the quality of the wheat supplied. Hmmmm…… nope, nothing sus here!

    The other galling aspect of the whole saga was John Howards mendacious dismissal of anti-war protesters as “giving comfort to Saddam”, when, as it turns out, he was simultaneously applauding AWB which was throwing buckets loads of “comfort” at Saddam.

  8. observa
    February 23rd, 2006 at 00:21 | #8

    ‘Mr Snowball told the Cole inquiry that he told Ms Moules Iraq was demanding US dollars in exchange for unloading wheat and AWB believed such payments were illegal. He said Ms Moules told him the UN was turning a “blind eye to corruption in the oil-for-food program, provided it was not excessive”.’

    Well at least now we all know what everyone knew at the time because it was all over Canberra and available to everyone from tea ladies to public servants, govt and opposition MPs alike. Presumably every budding Woodward and Bernstein knew too, but chose to sit on the story waiting for it to really bubble over into today’s sensation. What did we all know then? To do business with Saddam’s regime with oil-for-food, you had to pay kickbacks which the UN (and journos, public servants, AWB, Opposition Leaders and PMs)) would all knowingly turn a blind eye to, because they weren’t excessive port, trucking, inspection, iron filings, etc, fees.

    Armed with this widespread knowledge at the time, we know what the two main trains of thought and action were. The neocons in Canberra basically took the view that you could never trust a bastard like Saddam and invaded and put him on trial. The luvvies basically took the view that more of the same (kickbacks) would see him mend his ways and distribute the food and medicines fairly to needy Iraqis and in any case you could always pass more motions in the UN if the kickbacks got too excessive. Sounds like more of the same old argument to me.

  9. Terje Petersen
    February 23rd, 2006 at 00:40 | #9

    Let say it is the year 2000 and you are an honourable member of the opposition (ie an ALP MP). Lets say you learn that the monopoly wheat exporter AWB is only managing to sell wheat to Iraq due to bribes it is paying to Saddam. Lets say you go public and inform the UN of this knowledge and force the AWB not to bribe Saddam and as a result annual wheat sales to Iraq worth hundred of millions of dollars are lost.

    How would the Australian farming community, the media and the general public treat you for dobbing? Would they regard you in esteem for your high moral position. Or would they hang you out to dry for being so indifferent to the national interest.

    Now if the shoe was on the other foot and you were part of the government then how would your thinking go.

    The conspiracy of silence on this issue is quite understandable even if it was wrong.

  10. observa
    February 23rd, 2006 at 01:42 | #10

    What we business types really need is a comprehensive international definition of ‘legitimate’ fees and charges imposed by govts, so we can differentiate them from the ‘illegitimate’ and the ‘illegal’ kickback. Now wouldn’t that be a useful task for the UN to undertake eh? They might just have to sort out the thorny issue of defining what is a ‘legitimate’ government. Should keep them all out of mischief for years chasing the Holy Grail of the ‘International Convention on the Legitimate Fees, Taxes and Charges of National Govts’.

  11. February 23rd, 2006 at 02:30 | #11

    The existence of the kickbacks was no secret. It was widely discussed at the time. All these ingenues who are now gaping about “kickbacks” look rather like a roo caught in a spotlight.

    It should be remembered that it was not just the AWB which was doing this, but EVERYBODY who was supplying to Iraq under the oil-for-food programme. I note the French government has a markedly different attitude toward kickbacks by French companies than does the Australian government.

    How much of fools are we? The AWB staff, at great personal risk to themselves, entered into Iraq & secured a market for Australian wheat, beating to the punch the avaricious American farm lobby, who have long coveted our Iraq market. Instead of being rewarded for their efforts, these fellows are being pilloried, mostly by people who haven’t the balls to develop so much as a blister, never mind actually go & do something which is in the national interest.

    Now we (unlike France) are having a self flagellating inquiry, & handing a free kick to our trade enemies (the usa).

    Watching it is like being in a parallel universe. Australia often displays incredible stupidity, & this is one of those occassions.

  12. jquiggin
    February 23rd, 2006 at 06:31 | #12

    Umm, Steve, the Canadians were asked for the same bribes and refused to pay. That’s why AWB got the deal. The Canadians complained and got nowhere.

    The French, as you say, played the same game, though on a smaller scale.

    The Americans were complicit in the whole bribery business, but also not on as large or as blatant a scale and now that they run the show, they’ve locked us out.

    You still haven’t responded to the broader point. If it was worth doing whatever it takes to get Saddam’s business, why was it worth $A1 billion and potential loss of Australian lives to get rid of him, and as we’ve now seen, lose the Iraqi market.

  13. Katz
    February 23rd, 2006 at 07:01 | #13

    1. “Now we (unlike France) are having a self flagellating inquiry, & handing a free kick to our trade enemies (the usa)”

    SATP, the Rodent instituted the Cole Inquiry. He had a big problem. Read the relevant resolution:

    2. Resoution 661 of the Security Council 6 August 1990:

    ” 3. Decides that all States shall prevent:

    (a) The import into their territories of all commodities and products originating in Iraq or Kuwait exported therefrom after the date of the present resolution;

    (b) Any activities by their nationals or in their territories which would promote or are calculated to promote the export or trans-shipment of any commodities or products from Iraq or Kuwait; and any dealings by their nationals or their flag vessels or in their territories in any commodities or products originating in Iraq or Kuwait and exported therefrom after the date of the present resolution, including in particular any transfer of funds to Iraq or Kuwait for the purposes of such activities or dealings; ”

    The Rodent knew that the AWB was the biggest trader with Iraq under Oil for Food. Resolution 661 bound governments to monitor “any activities by their nationals …”

    Now the Rodent is behaving like the bloke who watches the red warning light shine for months and then expresses surprise that his engine has seized up.

    3. “The AWB staff, at great personal risk to themselves, entered into Iraq & secured a market for Australian wheat, beating to the punch the avaricious American farm lobby, who have long coveted our Iraq market”

    Follow this argument:

    There is no particular reason why AWB should have known that Item 1 on the Bush agenda was regime change in Iraq. However, SATP is implying here that Bush didn’t tell Howard of his plans. Or that Bush told Howard, but that Howard didn’t tell AWB.

    After regime change in Iraq anyone who did business with Saddam would be “on the nose” as far as any successor regime was concerned. Thus the question in the minds of Australian wheat interests (including Howard) would have been: how sustainable is the corrupt kickback regime? Maybe ten years would have been a good return on the investment of a tarnished reputation.

    Under both of these scenarios The Rodent emerges very badly:

    1. He is the dupe of Bush and not privy to his plans for Iraq.

    2. He knew of Bush’s plans and still hung out to dry AWB, its investors and the Australian wheat industry.

    So SATP, look at who had the call all along in this sordid, demeaning affair:

    1. Calling the Inquiry: The Rodent
    2. Being Bush’s dupe: The Rodent
    3. Willingly doing Bush’s bidding: The Rodent

  14. uncle Milton
    February 23rd, 2006 at 07:24 | #14

    The government must have thought they could play both sides of the street. Bribe Saddam and sell him wheat, then sell wheat to the successor government we helped install, with bribes if necessary.
    This kind of double game is very risky and depends on not getting caught. Since the Americans and the new Iraqi government have access to Saddam’s records the bribes were always going to get revealed. .It’s not a matter of national self flagellation. We got caught by Volker and unlike the French we aren’t big enough to tell the rest of the world to get stuffed.
    We better hope the Iraqi government just shrugs it off.

  15. Michael H
    February 23rd, 2006 at 07:53 | #15

    Observa wrote;
    “The neocons in Canberra basically took the view that you could never trust a bastard like Saddam and invaded and put him on trial. The luvvies basically took the view that more of the same (kickbacks) would see him mend his ways and distribute the food and medicines fairly to needy Iraqis and in any case you could always pass more motions in the UN if the kickbacks got too excessive.”

    This seems to turn things on their head just a little.

    The ‘luvvies’ generally wanted an end to the whole sanctions deal due to the effects on the civillian population. The ‘neocons’ wanted to play the ‘evil Sadaam’ card frequently and loudly in public, while prioristising trade with the said evil one, having been warned of the risk of kick-backs, and knowing they “could never trust” him. As well, the kickbacks started when there was no prospect of an invasion and trial.

  16. Hal9000
    February 23rd, 2006 at 12:28 | #16

    Hang on there, the bribes were being paid not with Australian farmers’ money, but with the Iraqis’ own money. The deal was that the AWB inflated the price, and then gave the margin back to the Iraqis under the table. All the talk is of the money being used to buy weapons, but as I recall it the Iraqi government was at the time hard-pressed to provide basic services like health and sanitation, so I presume at least some of it went to buy drugs and spare parts for sewage treatment. The Hussein regime wasn’t the acme of good governance, but the UN sanctions regime was designed primarily to hurt the Iraqi people. Having chosen to keep Hussein in power and to abandon those Iraqis it had urged to rebel, the US and its allies were perfectly happy for the Hussein regime to smuggle oil in exchange for foreign currency. No Volker inquiry about that. The ‘no fly zones’ were also completely illegal as was the secret bombing carried out under the aegis of the ‘no fly zone’ policy. In terms of moral turpitude, picking out the AWB is a bit like picking out one of the cleaner members of a mud wrestling team and crying ‘dirty’. The AWB was selling wheat, not weapons, and by all accounts said wheat was fairly distributed (http://www.irinnews.org/report.asp?ReportID=41475&SelectRegion=Middle_East) to the starving Iraqis by the evil Iraqi regime – indeed the basic infrastructure for food distribution survives to this day.

  17. Stephen L
    February 23rd, 2006 at 12:28 | #17

    Katz I think you miss one point. Howard has never cared about any negative consequences that may befall Australia from any of his actions once he is gone – all he cares about is success while he is at the helm.

    Consequently, from his perspective, making billions from wheat sales while he was there, with the knowledge that we would probably lose sales at some point in the indeterminant future was not too much of a problem. Back in 2000 he probably didn’t expect to still be at the helm by now (particularly given the polls at the time), and of course regime change was then not something on most people’s mind.

    Australian farmers are likely to be paying for this for years, and in all probablity will end up with less income than had we taken the Canadian option. But that’s only a problem for Howard now, when some of the damage will occur on his watch.

  18. snuh
    February 23rd, 2006 at 14:07 | #18

    terje: “How would the Australian farming community, the media and the general public treat you for dobbing? Would they regard you in esteem for your high moral position. Or would they hang you out to dry for being so indifferent to the national interest.”

    so your position is that MPs should turn a blind eye to the illegal acts of australian businesses, because unless our businesses can commit crimes with impunity [see division 70 of the australian federal criminal code], you might harm “the national interest?” right-o, then.

    also, observa, your disdain notwithstanding, there already is an international instrument on bribery of foriegn government officials, to which australia is a signatory. it’s called the convention on combating bribery of foreign public officials in international business transactions. division 70 of the criminal code was actually enacted in fulfillment of our obligations under this convention. also, division 70 helpfully distinguishes “facilitation benefits” [small-time wheels-greasing payments, which are ok] from prohibited bribes.

  19. snuh
    February 23rd, 2006 at 14:12 | #19

    also, the title of this post is funny, but surely it was never in doubt that they knew not to know. i don’t know it adds much to now know how they knew not to know.

  20. Katz
    February 23rd, 2006 at 15:49 | #20

    SL

    “Katz I think you miss one point. Howard has never cared about any negative consequences that may befall Australia from any of his actions once he is gone – all he cares about is success while he is at the helm.”

    I think that’s covered by this:

    “[Howard] knew of Bush’s plans and still hung out to dry AWB, its investors and the Australian wheat industry.”

  21. February 23rd, 2006 at 19:02 | #21

    jquiggin Says: February 22nd, 2006 at 10:03 pm

    I suppose a really hard-nosed realist would take the money and walk away from the table, but if Howard is that realist why has he spent a billion dollars and risked Australian lives to get rid of the very regime he was bribing to buy our wheat?

    jquiggin Says: February 23rd, 2006 at 6:31 am

    If it was worth doing whatever it takes to get Saddam’s business, why was it worth $A1 billion and potential loss of Australian lives to get rid of him, and as we’ve now seen, lose the Iraqi market.

    Pr Q cynicism about Howard’s motives in Iraq is misplaced. Howard’s main game in Iraq was political, not financial.

    This hard nosed realist has always maintained that Howard did not “[risk] Australian lives to get rid of the very regime he# was bribing to buy our wheat”. Howard et al couldn’t care less who runs Iraq and what they do to run it, as do most Australians and me – nowadays.

    Iraq, for the forseeable future, will be a more or less bad country no matter who is in charge and what type of system is in place. Best keep well clear of the place unless one wants to make money out of it.

    It is not “worth doing what ever it takes to get Saddam’s business”, in either wheat or oil. Saddam was already willing to give the West all his business on a plate in return for keeping his head attached to his shoulders, taking a cut from the deal and the privilege of writing romance novels in peace.

    The prospect of AUS getting wheat deals from a post-Saddam government was a bonus, not the main prize for invading Iraq. Just as the prospect of the US getting oil contracts was a bonus, not the main prize for invading Iraq. (The main strategic prize was US military hegemony over the Gulf.)

    The main reason Howard joined the Coalition of the Willing to put a favour into the bank of the US-AUS military alliance. It was payback for US assistance in the liberation of Timor and payforward for the next regional stoush where we need the US to come down on our side.

    Howard is Australia’s most adept practioner of the Machiavellian political arts: the good end justifies the bad means. The AWB scandal, like the GST and Tampa, is entirely in keeping with Howard’s Machiavellian MO.

    Most Australian’s realise this Machiavellian at some level of consciousness. They appear to be happy with results and would rather not be bothered with process. In this respect the Howard Cabinet is very much “modern Australian” in character.

  22. Mike Hart
    February 23rd, 2006 at 20:16 | #22

    Yes, we know that everybody knew, only a fool could not have known. The Australian Government may be in breach; of international law, its membership of the UN and have demonstratd dubious morality, this is a tipping point in national parliamentary governance, and one can only await the findings of the Commissioner Mr Cole in his final report for some succour. Politics appears indifferent to public opinion these days.

  23. Waratah
    February 23rd, 2006 at 20:26 | #23

    Gutsy coverage by the Australian, calling a spade a spade:
    http://www.theaustralian.news.com.au/common/story_page/0,5744,18243741%5E601,00.html

  24. Simonjm
    February 23rd, 2006 at 22:08 | #24

    Waratah calling a spade a spade is something I really despair of never hearing from the Howard and Bush apologists here. Now matter what they have done there is always a rationalization ready to defend them.

    It’s bad enough we have to listen to the paid spin without hearing the free version as well.

    If you cannot be critical of your own side then what is the worth in anything you say?

    One should not be surprised at the state of affairs though given that study that showed the emotion reasoning used by the politically biased, they cannot help themselves.

    One incident that was really is indicative to me was the furor over the Australian government bullying East Timor over international boundaries to get the lions share of the resources in the Timor Sea.

    The one of the champions of conservative morality Andrew Bolt’s attitude was screw them –one of the poorest nations on Earth- why should we give them an even break?

    This from the man who’s been heavily pushing the ‘moral’ reasons for ‘liberating’ Iraq.

    Howard will probably get away with this one as well, but when you get unaccountable government you get poor governance and as a nation we will cost us in the end.

    For the record I’m a consistent swing voter, I’ve voted out and condemned all sides of politics, criticized both the left and right, green and pro-business.

  25. Simonjm
    February 23rd, 2006 at 22:09 | #25

    Correction >ever hearing

  26. February 24th, 2006 at 08:57 | #26

    Shame it’s so low on the radar with voters.

    I suppose in a democracy we get the government we, as a collective peoples, deserve.

    Still it might do some long-tail damage…

  27. stephen bartos
    February 24th, 2006 at 15:34 | #27

    I’m never sure if SATP is being wilfully provocative or just misguided:

    “The existence of the kickbacks was no secret. It was widely discussed at the time” – where’s the evidence? can you point us to links to the many press articles and online opinion pieces you obviously must have read at the time about them? (which everyone else missed!). the evidence from the Cole inquiry suggests rather that the AWB at least took great pains to keep them a secret. Even so, it seems that our post at the UN did advise government what to look out for, despite the AWB’s efforts…which is the point of JQ’s original comment.

    “It should be remembered that it was not just the AWB which was doing this, but EVERYBODY…” simply not true, as pointed out earlier in this thread; but also remember, even among those who were paying kickbacks, the AWB is the BIGGEST single offender

    “The AWB staff, at great personal risk to themselves, entered into Iraq & secured a market for Australian wheat, beating to the punch the avaricious American farm lobby, who have long coveted our Iraq market” I’m not sure where the notion of a farm lobby in the US trying to steal “our” markets comes from. Although it is not just SATP but others who have been saying this, it is far from reality. 1) the US farm lobby concentrates on getting income support to farmers – and does so very successfully. in the international grains market, it is not like a sporting contest of one country vs. another – there are some countries (Canada, Australia) where there is one seller, and others like the US where there are a number of large grain trading companies. the US companies can sell a lot of very cheap wheat because the US government subsidises it at the farm. yes, the US government does have a policy of helping US companies over others – but these companies compete among themselves too. the farm lobby is a different matter, and it is mainly about income transfers directly 2) Iraq is not “our” market – the marketplace in international wheat is not allocated country to country by international treaties or covenants (unlike eg airline routes). wheat markets are open to whoever wins them. It is also not a case of the US as a whole coveting the market. the only reason why the middle east markets have been established as “ours” is that wheat is not homogenous – different wheats have different milling characteristics, and once a country has invested in putting in milling facilities geared to one type of wheat it is hard to change to another. for that reason, once you are a regular supplier to one country you automatically have an edge in later sales because they have additional switching costs. US traders of winter red wheat would like large wheat consumers like Iraq to make that switch, but have not to date succeeded despite price advantages. Of course the Cargills of the world are not kindly, charitable and altogether saintly – but on the other hand it is a bit over the top to describe them as “trade enemies (the USA)” as if they were one collective entity.

    As for the AWB doing “something which is in the national interest”, you must be joking! what were the AWB thinking – that this would never come out? Large scale bribery if revealed (and in this case, there was a strong chance it would be) hurts the reputation of the company involved not just in the market where the bribe occurred but elsewhere. This is the case with the AWB actions, and consequences will be felt by many wheatgrowers (although some may benefit if the net result is the end of the export monopoly). This affair has hurt australian interests not because the government has held an inquiry but because it was fundamentally a stupid thing for the AWB to have done. The risk in having an inquiry is far outweighed by the risk of not having an inquiry and seeing other countries/other interests spreading the story out over many years with whatever spin on it they chose. better to deal with it, and move on

    on this basis the government did the right thing in calling an inquiry. As to what the political impact may be, almost certainly Howard has made a judgement that it will be forgotten by the time of the next election. Doesn’t mean it should be forgotten, but reality is that we as a collective electorate have short attention spans.

  28. February 25th, 2006 at 13:02 | #28

    I am not sure I agree with Jack on the motives. We have worked hard for a long time to keep that grain market, and international competition is pretty vicious. If we imagine the Australians declining the opportunity to be involved, there is no way we would have kept that market, as there is no way that companies outside the Coalition are getting acess now, where the Americans control the deals.

    Indeed, the mates’ game over Iraqi contracts seems to be so tight that Australian companies have no access anyway, except for one dubious food contract which went wrong.But we have gained no leverage over Iraq, are forgotten in the US electorate, and don’t win

    Jack is appealing to one of our favourite foreign policy memes – we pay in blood and our allies support us later. Certainly that logic is embedded in our collective psyches. But the realpolitik of this is not emotional, but comes down to economic lobbying in the bearpit of US congressional and presidential politics. The FTA proves that. A deal for mutual benefit? Tell that to the sugar growers, the bee farmers, the drugmakers and (eventually) our producers of culture.

    On this level of blood expended, I am fascinated by the lack of Australian casualties. In the past, our armies have been butchered, not kept from the main fray.

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