Cole concludes

The Cole Commission has finally reported, and I can take some comfort from the fact that my predictions at the start have been borne out almost entirely.* No conclusive proof of government wrongdoing has emerged, no minister has resigned, and the government’s defenders have had no trouble squaring their denunciations of Saddam with the fact that we were financing his rearmament program up to the day the war began.

Only the last of these points really mattered, since it called into question the whole rationale for our participation in the war, and the good faith of those who urged. But now that the war is almost universally recognised as a disaster, this probably no longer matters. Even for those who justified the whole deal on the basis of commercial self-interest, it should be clear by now that we have lost any positive standing we had in the world wheat market and that the US will be able to lock us out of many markets we might otherwise have competed in with success.

For those who want more, though, occasional commenter Stepehn Bartos has produced a book called “Against the Grain – The AWB Scandal and why it happened”. It is published by UNSW Press in their briefings series, can be ordered online at http://www.unireps.com.au. He says

The book goes beyond the Cole Inquiry concerns of who did what when, and instead looks at the underlying causes of the scandal including inadequate due diligence at the time of AWB privatisation in 1999, poor design of regulatory supervision, and most importantly, the fact that Ministers and AWB officials were all part of the same small, closed circle and not inclined to ask questions even when information alerting the government to the possibility of the kickbacks started to come out.

It sounds like a substantial effort, given the short time, but of course many of the fundamental issues have been familiar from previous episode.

*The only point of disagreement is that Cole and I apparently differ on epistemological questions. In my view, if you are told ‘P is true’, P is in fact true and you have no good reason to disbelieve P, then you should be presumed to believe P and therefore to know P. Cole, perhaps more conventionally thinks that if you choose (or claim to choose) not to believe P, then you can’t know P. Thus, even though the government was told on many occasions that AWB was bribing Saddam, knew that Saddam was exacting bribes on a large scale, and had encouraged AWB to do ‘whatever it takes’ to sell wheat, by choosing not to believe the facts placed before, it avoided guilty knowledge.

37 thoughts on “Cole concludes

  1. but in our society we base our law on ‘innocent until proven guilty’, but I guess that doesn’t apply to government???

    Elections certainly have nothing to do with innocents or guilt. They are about competence, perceptions and fashion. We routinely sack governments when we get bored with them.

    Whether or not a minister gets the sack is a matter for parliament to sort out.

  2. Keep up the good work John, watching the champions of personal responsibility defending of their heroes’ incompetence / negligence / complicity in fiasco after fiasco never fails to amuse.

  3. Have I been linked by Tim Blair or something? The incisive critique of comments #21, #22, and #24 would seem to indicate a visit from his readers or those of some similar site.

  4. PrQ,
    There are always going to be disputes as to who knew what, when and who should have known what and what they should have done about it.
    In this case the question, to me at least, is an uncertainty as to the role of DFAT. Cole appears to be taking the line that DFAT was correct as acting as a post box for forwarding the reports to the UN and had no real role to take on in investigation once questions were raised by others, particularly as they were raised by companies with a vested interest in smearing (or, as it turned out, telling the truth about) AWB.
    Clearly, if DFAT had an investigatory duty as regard corruption then it would have to have been counted as failing in that duty. If it has no such duty, then the Minister would have nothing to resign over.
    I have seen nothing that indicates they had that duty.

  5. “Clearly, if DFAT had an investigatory duty as regard corruption then it would have to have been counted as failing in that duty. If it has no such duty, then the Minister would have nothing to resign over.”

    So, if an allegation of corruption is made (and it’s hard to imagine a more serious one than paying hundreds of millions of dollars of stolen money to Saddam Hussein) is it your view that DFAT has no duty to investigate it? If that’s your view, is there an obligation to seek an investigation by some other body? Or is it OK to ignore it, as was done?

  6. Remarkable how easy it is to spot a Blair link. You certainly don’t need an RSS feed. Blair has taken your first prediction (both Downer and Howard knew) and ignored the other three.

    For what it’s worth, of course they knew. But you don’t arrange an inquiry without making sure you’ll get the result you want in advance.

  7. Like any other decision, PrQ, you have to do an assessment of the risks involved, which must include an assessment of the reliability of the source, the target and the circumstances. With hindsight, it is fairly easy to see they should have referred it to the AFP. Foresight is less certain.
    If their assessment was that the corrupt behaviour had not reached the top of AWB, but was confined to lower level people, then the approach to the senior people in AWB would have been appropriate – inform them of the allegation, allow them to investigate and come back with a report. This is how regulators often work in these matters – provided they believe the people at the top are fit and proper.
    In this case it certainly appears as if that assessment was incorrect (we should wait for any prosecutions to be sure), but if DFAT do not have an investigatory arm this would be about as far as I would normally say it should be taken, again, with the provision above. DFAT is not a front line regulator (or police force) and should not be expected to behave like one.
    That said, I think their procedures will change now, though.

  8. I will give an example. When APRA were informed of possibly irregular dealings at the NAB, one of the first things they did was to contact the CEO and inform him. They also wrote to the Board informing them of the concerns. They also made an internal assessment of the risks and wrote up a file on it. That was all they did – they did not (correctly, IMHO) see their role as getting to the bottom of every allegation from institutional competitors that came across their desks. They trusted the internal mechanisms of the bank to deal with it. That is the reaction of a front line regulator. To expect more from DFAT is, IMHO, unrealistic without there being a specific requirement for them to investigate allegations like this.
    One of the real pities out of this is that DFAT may now over-react and see its role as investigating the cr*p out of every allegation that comes across their desks, causing still more regulatory overkill and hurting our import and export performance.

  9. Andrew: it would have been a better outcome had DFAT had done those things (ie contact the CEO and inform him, write to the Board, do an internal assessment of risks and write up a file). Andrew Lindberg (AWB CEO) is not on the Cole Inquiry list of those recommended for further investigation because he claimed – and it would seem Cole believed him – that nobody had told him.

  10. “Remarkable how easy it is to spot a Blair link. You certainly don’t need an RSS feed.”

    Certainly, it’s faster. The automated systems have a lag of at least a day, while the inane comments appeared almost immediately.

  11. I’s so bored by all this breast-beating over the AWB. Of course they paid bribes, but the US Govt. itslef rorted the oil-for-food program on a far grander scale than did AWB, as I pointed out here,and now they and American farmers have the gall to point the finger of accusation at us. I think an elevated middle finger is the only explanation we owe them.

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