When the Cole Commission began inquiring into AWB, past experience of the operations of this government yielded the following conclusions
* Both Downer and Howard knew that the AWB was paying kickbacks to the Iraqi regime
* This information was transmitted in a way that preserves deniability, so no conclusive proof will emerge
* No government minister will resign
* Endless hair-splitting defences of the government’s actions in this matter will emerge from those who have previously made a loud noise about Oil for Food.
With only Howard, master of the straight bat defence, still left to appear, all of these conclusions have been borne out. The offices of senior ministers were flooded with dozens cables and other communicaitons warning them of AWB activities yet, as far as the official record is concerned, no one ever looked into these any further than to ask for, and receive, a flat denial from AWB. It’s obvious that they knew enough not to ask any official questions that might produce inconvenient answers, but as predicted, no conclusive proof of this has emerged. Resignations appear to be out of the question. The theory of accountability remains in force.
John Quiggin 
I wish this was looked at from the Intelligence services point of view. Surely intelligence work 101 in looking at Iraq would be to work out the capabilities of the Iraqi regime by finding its sources of funding. The Oil for Food program was the most obvious and biggest source. I just cannot see how people in the intelligence community would not be aware of this. Then comes up the question whether they informed the government, or if not why? Won’t be looked at of course, as its all classified.
Michelle Grattan has a different interpretation, saying that your point 1 is not fair or correct.
well i think your point 1 is spot on,
and i dont agree with michelle,
you have to know the things that you officially dont want to know,
you have to be aware of the answers to the questions you make sure you dont ask
Of course they didn’t know; at the first hint of impropriety they took care not to find out. By now it takes only the barest of winks (“gee, I’m glad you guys at AWB are now privatised and no longer our responsibility”) to make sure everybody is kept out of the loop.
And all it took to provide that hint was the bare fact that AWB was being extraordinarily successful selling to a bunch of known crooks. Maybe a duffer like Vaile wouldn’t get that hint straight away but I bet his senior public servants did, and the PM certainly would have.
To say that Michelle Grattan has a different interpretation from JQ (re AWB) is itself unproductive hair-splitting, I fear.
Grattan writes:
“This affair *looks much more like* a gross Government failure rather than a case of improper, or indeed illegal, behaviour” (emphasis added).
So a “gross government failure” (aka a “stain”) that results in NO action (against the said culpable government) is a trivial thing compared to outright corruption (which, under Grattan’s logic would presume SOME government punishment)??
I’m speechless. Frankly, I don’t give a stuff whether Howard et al are “merely” grossly incompetent, as opposed to provably corrupt. Happily assuming the former, IMO they all (i) have got to go, and (ii) should be held personally liable for their incompetence, and sued into bankruptcy.
I am inclined to agree with all the points made by JQ.
However the opinion polls seem to suggest that their is little impact on the Howard governments viability relative to the ALP.
What they did was probably corrupt and they probably were not as ignorant as they make out. However staying quite was probably in Australias national interest and most people are probably aware of that fact. If you hate Howard it is a reason to hate him more, however if you support Howard it probably has only a moderate impact.
Given the likely impact on our export sector I doubt that the ALP would have moved to expose this issue if there had not been a regime change in Iraq.
“However staying quite was probably in Australias national interest”
WHAT? We were at war with the very people that we were bribing. In what parallel universe is this in the national interest?
“aiding and abetting” the enemy more like. Those responsible should be keeping David Hicks company in Guantanamo Bay.
I suppose it’s a matter of philosophy whether our real national interest is in helping prop up and arm nasty dictators or make a few extra bucks (maybe, assuming no other markets) for our farmers.
Personally I think this is your typical bureacratic act of omission rather than commission here. It’s all a bit like Sept 11, where you go gleaning the microscopic clues after the event and the jigsaw seems so patently obvious. Similar to APRA with HIH and OneTel debacles. It happens in the private sector too, with your Ansetts and Enrons, etc. Noone really wants to ever believe that there is a monumental cock up or shonk going down. Did the UN with FFO sanctions until faced with the facts after the Iraq invasion? Same crap different organisation. Let’s face it guys. What did the Howard govt oversight here that the UN, ALP Opposition and our media didn’t as well? 20/20 hindsight is baloney!
You raise the other major point about where the benefits of the comparative advantage of trade will accrue wilful, irrespective of the difficult exercise trying to define what is a ‘legitimate’ tax, levy or charge on imports. Right from the very start, the FFO relaxation of economic sanctions was always going to put those CA benefits in the hands of the Iraqi regime. How could it do otherwise with trade with a totalitarian dictaorship? It’s the same as us trading with the USSR all those years while plotting its downfall.
Mind you 20/20 foresight is a marvellous thing.
When I see UN employees throwing themselves on their swords over this issue – then I will consider that the Australian Government needs to start doing a bit of housekeeping.
This is another affair along the same lines of the kids overboard issue – maybe technically correct but not a major issue that the voting public give a fat rat’s clacker about. Only the Loyal Opposition and hanger-ons have their knickers in a knot over it. The voting public is smart enough to work out what are the important issues when it comes down to who should hold the reins of power – and it ain’t the ALP at Federal level.
How is Carmen Lawrence’s memory coming along by the way??
“…maybe technically correct …”
“What is truth?” asked jesting Pilate as he washed his hands.
I think all of the apologists are forgetting one simple thing. It’s explicitly against the law of Australia to pay bribes.
“Endless hair-splitting defences of the government’s actions in this matter will emerge from those who have previously made a loud noise about Oil for Food.”
“maybe technically correct but not a major issue”
Hmmm, paying hundreds of millions of dollars in bribes to the very people we were about to go to war with is not a major issuel; sustaining a regime that according to our Prime Minister was guilty of the most appalling human rights abuses is not a majoe issue.
If that’s the case, what is a major issue?
I’ve got no problem with going after AWB if they are proven to have broken the law – hang ’em out to dry – go your hardest.
As for the paying hundreds of millions – that wasn’t Australian or AWB money – it was money paid by third parties for Iraqi oil.
We sent shed loads of wool and other commodities to Russia and China and other Eastern Block countries during the cold war. Wool used to make the uniforms to equip the Russian Army that had/has nuclear weapons aimed at Pine Gap and the NW Cape and proabbly Canberra and Sydney and Melbourne. Two regimes responsible for tens of millions of deaths and continuing human rigths abuses. Don’t start getting all effing precious about who we are trading with because of human rights and potential conflicts. If it is illegal to trade with a country then it is illegal, otherwise let the traders sell and buy from whoever they wish to.
Where was the UN on this??? It was their program. If they require Governments to monitor the programs then shouldn’t they be montioring the monitoring??? The world saw pictures regularly of columns of trucks crossing the Iraqi borders breaking the oil sanctions and nothing was done for Christ sakes. Are we Australians meant to prance around being wincy little prima donnas throwing away Australain wheat sales while the rest of the world profiteered from the sanctions busting that was happenging all over the place. And when you go back and have a look at the priority list of things to do that the Australain Government and DFAT etc were focussing on the Iraqi wheat trade probabaly doesn’t make the top 20.
“Where was the UN on this??? It was their program. If they require Governments to monitor the programs then shouldn’t they be montioring the monitoring???”
Razor, they were monitoring the monitoring. They told DFAT it stank to high heaven, DFAT then asked AWB “Are you paying bribes to Saddam?”, AWB said “no”. DFAT said “Oh, OK then”, and that was that, or so we are led to believe.
Howard, Downer and Vaile say they had no idea any of these conversations were happening.
As for priorities, we’re not talking about the Eqyptian wheat trade, Iraq was a country we were preparing to go to war against; no trifling matter, as I am sure you would agree. It beggars belief that within the government they could, on the one hand, prepared to declare war against Iraq, to help rid the world of a dangerous regime, but on the othe hand treated huge, and hugely suspicious, wheat sales to that very same regime as a trifling commercial matter that need not be brought to the PM’s and foreign minister’s attention. It just doesn’t wash.
“The world saw pictures regularly of columns of trucks crossing the Iraqi borders breaking the oil sanctions and nothing was done for Christ sakes.”
Yes because both the Clinton and Bush (43) administrations threatened to veto any proposal to stop it.
Spiros – that is crap that they were monitoring the monitoring – the UN only asked questions because direct commercial competitors squealed when they didn’t get the deals. If the UN was montoring anything it was their own personal bank accounts and those of their cling-ons like George Galloway.
As for trading while preparing to go to war – we did that for half a century with the Eastern Block. We traded with Indonesia and maintained cordial relations while Australian and Indonesian soldiers were killing each other (us lots – them not many) during the confrontation. It is up to the politicians to decide when trading becoems illegal – until then business continues.
We wouldn’t have had this old for fraud situation if the UN had had the balls to stanf up to Hussein in the first place and as soon as he breached a Security Council resolution finished off Gulf War I like they should have.
Razor, your analogies using the Eastern bloc are crap. We were never at war with the Soviet Union, and never came close to it.
On the other hand, we were effectively at war with the then North Vietnam and North Korea for a while. But we were never bribing Ho Chi Minh and Kim Il Sung to take our wheat, which was just as well.
Rather than skipping off into irrelevant tangents about George Galloway, I’d like to know whether you think that Howard and Downer really didn’t know what the AWB was doing all this time. That was what John Quiggin’s post was about.
Yeah that’s right Razor Carmen Lawrence memory lapse 15 or so years ago is far more important than Ministers turning a blind eye to the funnelling of funds to Saddam’s regime in direct contravention of a UN resolution.
Didn’t we go to war against the same regime because they were contravening a UN resolution?
Seems a bit hypocritical to me.
sdfc, maybe the logical response is to invade ourselves for violating UN resolutions.
It was a UN monitored program and the UN cannot expect that the Aust Govt will take responsibility for the actions of a publicly listed company whose liability is limited by guarantee.
AWB is answerable to its shareholders who, in the main, happen to be the farmers, not the govt.
Even Cole understands that.
Rog, don’t be such a dishonest blogfly. The Government *did* overlook the Oil-for-Food contracts as Downer said in his testimony. Obviously they did a very poor job of it.
If we are going to take the ‘national’ interest line at least be consistent and stop the BS about the morality of taking out Saddam.
We did it to suck up to the US, at least be honest about it.
BTW anyone notice those two champions of the moral case for invading Iraq Bolt & Ackerman have come out against allowing the Papuan asylum seekers into Australia?
Funny how freedom from oppression and human rights abuses is worth the death and destruction in Iraq but not so for the Papuans?
So the Australian business community does not have take any notice of the Australian government and its laws as it is only responsible to its shareholders?
Balderdash.
I’m speechless. Frankly, I don’t give a stuff whether Howard et al are “merely� grossly incompetent, as opposed to provably corrupt. Happily assuming the former, IMO they all (i) have got to go, and (ii) should be held personally liable for their incompetence, and sued into bankruptcy.
Leaving anything else aside, who would sue the government (or Howard, Downer et al. as individuals or whatever) over this, and on what grounds?
“It was a UN monitored program and the UN cannot expect that the Aust Govt will take responsibility for the actions of a publicly listed company whose liability is limited by guarantee.
AWB is answerable to its shareholders who, in the main, happen to be the farmers, not the govt.”
Actually when the bribes started AWB was wholly owned by the Australian government.
>Leaving anything else aside, who would sue the government (or Howard, Downer et al. as individuals or whatever) over this, and on what grounds?
Seen what’s happened to AWB shares lately?
I’d suggest every shareholder has a case against the Feds as the vendor of the company and all the experts who signed off on the deal.
“If the UN was montoring anything it was their own personal bank accounts and those of their cling-ons like George Galloway.”
Thanks, I needed a laugh, today.
“We wouldn’t have had this old for fraud situation if the UN had had the balls to stanf up to Hussein in the first place and as soon as he breached a Security Council resolution finished off Gulf War I like they should have. ”
You ARE brave. And I agree with you.
Alexander McLeay wrote:
“Leaving anything else aside, who would sue the government (or Howard, Downer et al. as individuals or whatever) over this, and on what grounds?”.
Such an action (which would be against persons, not the “government”) would be brought of behalf of the citizens (or more narrowly, if you prefer, the taxpayers) of Australia. Its essence would be a breach of fiduciary duty – viz that leaders, who had been elected/appointed to high office in good faith, have manifestly fallen short of the standard of diligence expected of them.
The damage – and so the monetary *damages* – is the curliest aspect here. What I as a citizen have lost is somewhat fuzzy, but this doesn’t mean that it is nothing. I would analogise it as a loss of goodwill, especially in the international arena; aka “brand Australia” has been trashed – at least in Geneva and on the East River, etc.
Otherwise, I stress that unlike Ian Gould, I’m not remotely concerned with AWB shareholders (although I acknowledge their economic loss, as well as a chain of causation for this loss that can be traced to Howard et al). The crucial difference here is that AWB shareholders (i) took a commercial risk, and (ii) were, or should have been, on notice about dodgy federal privatisations since the T2 debacle.
While there is an obvious counter-quip here – that citizens have been on notice of dodgy governments since time immemorial – I’m not buying it. Economic fundamentalism since c. 1980 has made everything else dog-eat-dog, so I don’t see why political leaders beast, should be spared from purely vindictive (coz Howard’s few-mill of private wealth is going to be nothing when spilt twenty-million ways, after legal costs) court actions. Such would be justice in more than one way – political leaders (including many Labor ones) have always steered the beast of economic fundamentalism.
Listening to this debate does raise the broader question as to whether economic sanctions should be used against totalitarian states. There are two parts to that answering that question, namely the moral and practical considerations. Iraq illustrates the point.
From a moral point of view the argument is really that denying the state the usual benefits of the comparative advantages of trade, will punish them for being bad international citizens. Immediately a moral dilemma became apparent as it always does with totalitarian regimes. The oppressed masses suffer further while the regime and its followers doesn’t. To ameliorate this was the FFO relaxation of sanctions, but really this was out of the frying pan and into the fire as we saw. Warehouses stuffed full of food and medicines for the regime, while it was more of the same for the oppressed. The moment you release some comparative advantage, it can be coopted by the regime, unlike laissez faire open economies. There is no doubt that with this sort of analysis, it is reasonable to conclude that some of the benefits of CA with the USSR trade throughout the Cold War, would have subsidised the Gulags, among others. To trade or not to trade, that is the fundamental moral question.
Secondly there are the practical considerations. How on earth can we define what is a legal tax(all tax is theft arguments?), charge or levy on imports and who will police them internationally if we can? Also how easy is it to break the sanctions with porous borders and recalcitrant or opprtunist neighbours. Are economic sanctions ever practicable and workable?
In the Iraq FFO relaxation of initial tough economic sanctions, you’ve got the whole box and dice. The real question is- How’d we all do internationally with sanctions folks?
Err and should we realistically expect our govts of whatever political persuasion to have done any better overall?
Howard et al were enthuisatic supporters of sanctions against Iraq and were quick to heap opprobrium on the heads of those who they claimed were ‘giving comfort to Saddam’.
It it too much to expect similiar enthuisam in investigating the violation of those same sanctions and of those repsonsible for actually ‘giving comfort’ to the Iraq regime?
It in’t a question of anyone else ‘doing better’ but the Howard Govt living up to it’s rhetoric. Fat chance.
With respect Michael, the Howard govt did more than just live up to the rhetoric (moral and practicable arguments about economic sanctions). It basically said shove all this rhetoric and argument and we’re off to help depose Saddam. Essentially that put a stop to all the bullshit in one respect, but might have got them deeply in the shit in another argument. That’s the rub about the AWB enquiry now. It’s yesterdays news in terms of viable policy options against Saddam, but critics who want to bash the Howard govt over the head with it are really beating up on themselves and their prior policy prescription here. Of course they can turn their attack to the real policy response of the incumbents, namely Iraq, but to do that they need to have a real policy alternative up their own sleeve. That’s the sticky bit as we all watch events in Iraq with some foreboding. Sanctions would clearly never have worked and now the alternative, well um err…
Help, anybodeeeeeeee?????
“the Howard govt did more than just live up to the rhetoric”
Huh??
It vilified the anti-war majority as ‘giving comfort to Saddam’.
Now it turns out that it was doing precisely that to the tune of $300 mil through incompetence or indifference (take your pick).
If anything, the Howard Govt actions show its’ committment to ‘depose Saddam’ was rhetorical bluster, aimed at the US alliance. Iraq and Saddam were just the stage for this particualr play. It avoided underetaking even minimal efforts to expose AWBs support for Saddam prior to the war.
Grattan’s point is a non sequitur “For a Government that was moving to be part of the Iraq invasion to be willing to see hundreds of millions of dollars go to the Saddam Hussein regime really does stretch credulity.” This is a fine example of a priori reasoning. I thik in the end the relationship between what happened in Iraq and the knowledge of the Howard government is going to be a complex one. That they were aware of it before war started is beyond doubt.The bribes started in 1999 well before there were any plans to go to war with Iraq. Definitive plasn to go to war with Iraq only occurred from September 2002 going from the ONA inclusion of bias in its reports. The Prime Minister’s weak interrogation at the Cole Inquiry today mean now that the whole inquiry has turned into a farce.
And as if to stress the point, we’re still arguing the toss about an obviously flawed policy toward Saddam, while Iran bobs up on our alligator radar. Time to turn on the 20/20 foresight detector. I’ll keep my fingers crossed we get the settings right and read all the signals properly this time.
Iran has ‘bobbed up’ on the radar in a similiar fashion to Iraq.
Let’s hope the gullible have learnt their lesson.
Tell you what.
Let’s all attempt to predict the likely outcome of a military strike on iran and in the event it comes abou we’ll see who is more accurate.
L look forward to description of the victorious Us for4ces rolling into Tehran on a red carpet strewn with flowers thrown by the adoring locals as they beg their liberators to do them the ultimate honor of deflowering their daughters.
REAL Democracy requires a degress of government accountability. Howard, Berlusconi, Bush and Blair are dragging their democracies into a state of disrepair.
Ian,
IMHO, Iran is just as much a threat to the world as was Iraq. It’s incipient nuclear weapons program is likely as well developed as Saddams was in 2003.
The results of a US strike on Iran are likely to be mostly negative. The main victims, will of of course be ordinary Iranians. The leadership, ie the Hardliners, will be bolstered as the attacks will give them the opportunity to posture as loyal nationalists standing up to foreign aggressors. This in turn, mostly impacts on ordinary Iranians who want a more open society.
Iran may respond with attacks on shipping in the Gulf, maybe a new ‘tanker war’. Iraqi shiites aren’t likely to look to fondly on such a scenario and may more openly support Iran, causing the Kurds to attempt to break more decisively from Iraq. What effect this might have in Turkey is hard to predict.
Bottom line – bad news for ordinary Iranians. But then, the effect on real flesh and blood people never seems to figure much in the ‘strategic’ views of Bush et al.
Another question – would the faithful poodles come to heel again?
Michael H have a read of this – http://www.city-journal.org/html/16_2_iran.html
Frankly, North Korea doesn’t bother me too much having Nuclear Weapons but the Iranians have plenty of form.
There is a lot of hair splitting, ducking and weaving but it is interesting to look at what has happened in the light of the 1996 Ministerial Accountability framework.
It is not ancient history that the Ministers concerned have failed in their basic duty but timely and relevant. They have very clever and astute public servants who have somehow failed to provide important information to their Ministers. In other times these public servants would have been held accountable – now they are likely to get a plum job. It takes a lot of skill to aid the Minister in avoiding seeing the many incriminating documents which were held within DFAT. Rather than staff investigating the claims of graft by going through the papers that DFAT held blind assurances were accepted.
It is interesting that there are many writers who keep on saying that everybody knows that this is the way that business is done in the Middle East. That it is so well known is exactly why the Ministers concerned should have heard the alarm bells ringing. It is agreed that the people needed the food – but it could have been wheat without kickbacks – if Australia hadn’t been so keen and the Ministers so deliberately blind.
The Government splits hairs and argues over minute detail whilst having a collective memory failure.
I remember a political resignation over a TV, imported improperly. On the scale of evils far less than providing millions of dollars to a madman and an evil regime to at best murder his own people.
There are several layers here – attack those who are shocked at the level of Ministerial culpability which will go unpunished as the terms of reference of the Royal Commission won’t allow otherwise , Feign ignorance and ensure that privatisation provides a layer of protection, drag the matter out over time and have the key Ministerial witnesses appear in the week just prior to a major public holiday, focus on trivia and weaknesses overseas and in the United Nations to shift blame and try to shut it down with as little damage as possible.
It seems that the analysis of PR Q is uncannily accurate.
Razor,
Mark Steyn?? Have you lost the plot?
Steyn was a rabid pro-Iraq War pundit who in the immediate aftermath was attacking anyone who said Iraq was desending into chaos.
Steyn writes for the National Review. If you wanted a rational, informed perspective on Iran, this is the last place to look. Steyn, with a record of being completely wrong on Iraq, now says an attack on Iran is of critical importance (for ‘our civilisation’ no less), ergo, it is not.
His is the best argument against attacking Iran that it I’ve yet heard.
I’m sure that just prior to the fall of Singapore all the pundits were sitting around saying things like; “let’s hope the gullible have learnt their lesson” and “thank god we didnt (lower ourselves) to pay any bribes” and “chin chin old chap”
AWB are answerable only to their shareholders and ASIC.
AWB became a grower-owned and controlled corporation in 1991 and was floated on the ASX in 2001.
The govt has no responsibility for the actions of the AWB since 1991.
Michael H – Steyn encapsulates everyhting I want to say on international affairs and domestic politics in the great western democracies in a way I never could hope to. I don’t agree with his views on abortion and intelligent design, but apart from that – he is totally on the money.
rog – the punters here probably don’t understand the concept of a Limited Liability Company being a seperate entity that a Government doesn’t actually run, so keep it down to short sentences and small words, otherwise their heads explode.
I see the hand of Milo Minderbinder in this.