Australian Broadcasting Corporation


LOCATION: http://www.abc.net.au/lateline/content/2006/s1569019.htm

Broadcast: 13/02/2006

Political wrestle of AWB issue intensifies

Reporter: Greg Jennett

TONY JONES: There's evidence that the Iraq wheat bribery scandal is starting to threaten Australian farmers. Iraq's grain board has suspended all contact with the monopoly exporter AWB Limited, potentially affecting millions of dollars worth of wheat sales. As the commercial clouds gather, the political wrestle over the affair has intensified. The Government has ruled the subject off limits at this week's Senate estimates hearings, preventing its most senior public servants telling what they know. From Canberra, Greg Jennett reports.

GREG JENNETT: With one pre-emptive strike, the quest for answers on the Iraq wheat bribery scandal was over before it began.

SENATOR NICK MINCHIN, GOVERNMENT SENATE LEADER: I should inform the committee that the Government has directed that officials appearing before Senate legislation committees should not answer questions directed to them on matters before the commission of inquiry.

GREG JENNETT: Frustrated by the Cole Commission's terms of reference, Senate Estimates was the best chance Labor thought it would get to discover what the Government knew about AWB's payments.

SENATOR JOHN FAULKNER: The public probably think your Government is completely corrupt.

SENATOR NICK MINCHIN: That's an utterly ridiculous and offensive assertion, Mr Chairman. I'm not gonna sit here and put up with that sort of assertion.

GREG JENNETT: The 'no-go' rule had been imposed last Monday.

JOHN HOWARD, PRIME MINISTER: This was a decision of Cabinet, and it's an entirely proper decision.

GREG JENNETT: The Prime Minister reached back to the Hawke Government in 1989 in search of a precedent.

JOHN HOWARD: There was a decision taken by the Cabinet that officials in an entire department could not answer any questions on a subject called Coronation Hill.

KIM BEAZLEY, OPPOSITION LEADER: This is a cowardly government, a weak government, running for cover, using its power.

GREG JENNETT: Beyond the political pursuit, the real consequences of AWB's kickbacks are beginning to bite. Just as Iraq looks at awarding new contracts for up to $100 million worth of wheat, its grains board has frozen contact with AWB until the Cole inquiry is finished. The Trade Minister, Mark Vaile, says he'll instruct Australia's ambassador to Baghdad to try to get the decision reversed.

KEVIN RUDD, SHADOW FOREIGN MINISTER: Australian wheat farmers are now paying the price for the Howard Government's failure to pick up warning after warning about the AWB's activities in Iraq.

GREG JENNETT: And the Opposition today picked up another warning it says the Government couldn't have avoided - a 2003 US Defence audit naming AWB and highlighting a sale to Iraq potentially inflated by up to $15 million.

KEVIN RUDD: Is it not a fact that by turning a blind eye to this report, that the AWB's corrupt contracts with Iraq continued to run for another 12 months after this September 2003 warning?

MARK VAILE, TRADE MINISTER: The Government didn't turn a blind eye to anything.

GREG JENNETT: He didn't deny the Government had access to the report. Greg Jennett, Lateline.