Australia PM to give account to Iraq wheat inquiry

SYDNEY, Apr 10 (Reuters) Australian Prime Minister John Howard will provide a written statement tomorrow to an official inquiry into alleged kickbacks by wheat exporter AWB Ltd. to the Iraqi regime of Saddam Hussein, and said he will appear if asked.

If Howard is called to answer questions he would be the first prime minister to face an official inquiry since 1983.

Deputy Prime Minister Mark Vaile and Foreign Minister Alexander Downer are due to give evidence to the inquiry by former Supreme Court Judge Terence Cole this week.

Cole is investigating whether AWB and two other companies broke any Australian laws in their dealings in Iraq. He can recommend prosecution of companies and associated individuals, but cannot rule on whether the government or ministers acted illegally.

While the top levels of government have been drawn into the long-running inquiry, analysts said Australia's strong economy and low interest rates meant any voter backlash was likely to be minor.

''I think what will happen is that some of the trust that they apparently have will be diminished,'' said Australian National University political analyst Michael McKinley.

''(Howard's) probably fairly well insulated by a firewall of advisers.'' Vaile and Downer have already provided sworn statements outlining their knowledge of 222 million dollars in kickbacks AWB allegedly paid to Saddam's former government through the United Nations-managed oil-for-food programme.

''I do not believe, on the information known to me, that any of my ministers have been guilty of dereliction of duty,'' Howard, whose government is due to face an election in late 2007, told a news conference today. The ministers' statements were placed under a confidentiality order by the inquiry and Howard said it would be up to the inquiry as to whether his statement was made public.

IRAQ SANCTION After almost three months of public hearings, the Cole inquiry has publicly released AWB documents that show it was aware it could have breached UN sanctions against Saddam's government.

Downer, Vaile and Howard have all maintained that their first knowledge of possible breaches came with last October's UN report, which accused AWB and more than 2,000 other companies of paying kickbacks worth 1.8 billion dollars to Saddam's government.

That report, headed by former US Federal Reserve head Paul Volcker, said the kickbacks were from wheat prices that were inflated by secret ''service fees'' and other charges and washed through the UN-managed US dollar oil-for-food account.

The Cole inquiry said on Monday it has also asked former UN official Felicity Johnston to provide a sworn statement.

Johnston has told Australian Broadcasting Corp. television that she raised allegations of wrongdoing by AWB with a New York-based Australian foreign affairs official in 2002.

In a programme to be broadcast on Monday night, Johnston said that while it was the UN's responsibility to check the prices on wheat export contracts with Iraq, Australia still had obligations under a UN resolution. ''Mr Vaile may try to wash his hands of it, but they do have a responsibility to ensure that their nationals abide by the rules and the regulations,'' Johnston said.

The Cole inquiry is due to report to the government by June 30.

REUTERS