Agriculture Secretary Mike Johanns announced the immediate suspension and proposed disbarment of AWB Limited, formerly the Australian Wheat Board, and its affiliates from participating in U.S. farm programs.
USDA’s Foreign Agriculture Service is taking the action following reports that the AWB, several individuals and a Minnesota-based company participated in giving bribes, kickbacks and other activities to win grain contracts from Saddam Hussein’s regime in Iraq.
The U.S. Wheat Associates, the marketing and promotion arm of the wheat industry, has complained that Australian Wheat Board officials may have paid as much as $300 million in kickbacks to Saddam Hussein’s regime to win preferential treatment for Australian wheat in the Iraqi market.
“We have a duty to protect the public interest by ensuring the firms and individuals with whom we do business abide by the law,” said Johanns in announcing the suspension in Washington. “We have taken this immediate step based on evidence of illicit activities and, in some cases, evidence of attempts to conceal those activities.”
FAS has sent suspension and proposed debarment notifications to AWB Limited, Paul Ingleby, Jim Cooper, Mark Emons, Peter Geary, Michael Long, Dominic Hogan, Nigel Officer, Charles Stott, Murray Rogers, Michael Watson, Trevor Flügge, and the Commodity Specialists Company (CSC) of Minneapolis.
Effective immediately, these companies and individuals are barred from participating in any U.S. government procurements as well as many other U.S. government programs such as loan guarantees.
During the suspension, FAS will conduct proceedings that may result in debarment of AWB Limited and its former employees indefinitely, and CSC for five years. AWB Limited and the 11 individuals face indefinite debarment because of evidence to suspect that their direct involvement in the bribes and kickbacks paid to the Saddam Hussein regime were made more egregious by attempts to cover-up their actions.
The action on Dec. 22 follows the November 27, 2006, release of the Cole Commission Report. The Cole Commission was established by the Australian government to investigate wrongdoing by AWB Ltd. in the United Nations’ Oil-for-Food Programme (OFFP).
The potential wrongdoing by AWB Ltd. originally came to light in the United Nations' Volcker Commission's Report, which found that $1.8 billion of the OFFP's proceeds had been illegally diverted to members of the Iraqi government in violation of UN rules. AWB Limited was found to be responsible for diverting $220 million of that total.
On November 10, 2005, FAS suspended AWB (USA) Limited, a wholly owned subsidiary of its Australian parent company. FAS did not take further action against the company at that time because the Australian Government acted swiftly in appointing the Cole Commission to investigate allegations against AWB Limited, and because AWB (USA) Limited agreed to recuse itself from participation in USDA programs during the course of the investigation. The Cole Commission Report implicated AWB Limited, individuals associated with AWB Limited, and the CSC.