USDA may face probe of relationship with Aussie wheat firm

An Australian government commission report released Monday concluded that AWB Ltd., Australia's wheat monopoly, engaged in a kickback scheme with the Iraqi government of Saddam Hussein under the U.N. Oil for Food program.

That conclusion is likely to lead to congressional hearings on the impact of AWB's bribes on U.S. farmers and on AWB's relationship with the Agriculture Department under the Bush administration.

The inquiry also might affect the 2008 re-election campaign of Sen. Norm Coleman, R-Minn. Coleman stopped his Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations from looking into the role of AWB in the Oil for Food scandal after then-Australian Ambassador Michael Thawley told him the charges were unsubstantiated. Minnesota is a major wheat producer and U.S. Wheat Associates, a wheat marketing group, played a pivotal role in raising the issue.

In a statement Tuesday, Coleman said his subcommittee will review the report to determine whether U.S. farmers were hurt by AWB's misconduct. "Another major concern is whether Australian officials were less than honest in their dealings with the subcommittee. We will examine the report to ensure that no one lied to this subcommittee," he said.

Coleman's ability to take action as chairman might be constrained by the Democratic takeover of the Senate. But his spokesman said Coleman will pursue the matter even after Democrats take control and he loses the chairmanship of the subcommittee. Sen. Carl Levin, D-Mich., is the subcommittee's ranking member.

House Agriculture ranking member Collin Peterson, D-Minn., said in a statement that he hoped the report would increase the transparency of the AWB and end its monopoly over export sales. Senate Agriculture ranking member Tom Harkin, D-Iowa, also has raised questions about the use of U.S. agricultural credit guarantee programs by an AWB subsidiary that trades in other U.S. commodities.

The Agriculture Department declined to suspend AWB from the program, but AWB agreed not to participate. "Now that Democrats are in the majority, we should have a better opportunity next year to get the facts out on the table and examine the extent of corruption in AWB's dealings under the United Nations Oil-for-Food program," Harkin said in a statement.

Terence Cole, the retired Australian judge who headed the yearlong investigation, said "the facts are not now in doubt" that AWB paid about $221 million in bribes to Saddam Hussein and his allies through contracts with a Jordanian trucking firm. The conclusion leaves about a dozen AWB officials subject to criminal prosecution under Australian laws.

Those AWB officials include Trevor Flugge, the former AWB chairman, who served with the concurrence of the Bush administration as a co-senior agriculture adviser to the Coalition Provisional Authority and the new government of Iraq. The report did not find that the conservative government of Prime Minister John Howard, a close ally of President Bush, knew about the bribes.