Kicking Back.

February 1, 2006 4:11 PM

It seems increasingly more likely that Saddam Hussein's regime was getting kickbacks from the Australian Wheat Board and, worse still, the Australian Government may have known about it. This major scandal is causing big headaches for the Australian Government and is emerging as a diplomatic sore point between the US and one of its strongest Iraq War allies. The Australian Opposition is calling for the official inquiry into the matter, the Cole Inquiry, to be widened, whilst in the US, several US senators including Norm Coleman and Patty Murray are demanding answers whilst simultaneously calling for a ban on Australian wheat. [more inside]
posted by Effigy2000 (31 comments total)

The AWB has denied purposely doing any wrong (it's officials are apparently claiming they didn't know) but evidence coming out of the Cole Inquiry is starting to suggest that that may be an outright lie. So too has the Howard Government denied having any knowledge of the affair but that too appears to be false.

Finally, given that US Senators like Norm Coleman called for the dismantaling of the AWB back when Australia signed a Free Trade agreement with the US, some have suggested that there is aan agenda behind their call for a ban on Australian wheat.

Whatever their motives, Australia's ambassador to the United States iis set to respond to the Senators concerns today. What damage this scandal will do to Australia, its government and its diplomatic relations with the US, however, remains to be seen.
posted by Effigy2000 at 4:11 PM on February 1, 2006

Wait, I'm already boycotting Danish cheese. It's getting tough to make a sandwich.
posted by baklavabaklava at 4:17 PM on February 1, 2006

I call for a ban on Norm Coleman.
posted by DonnieSticks at 4:23 PM on February 1, 2006

Australia sucks.
posted by delmoi at 4:31 PM on February 1, 2006

Compared to U.S. support for the Hussein regime during the Iran-Iraq War and at the time Saddam was gassing the Kurds, this seems rather minor. That's not to say it should be ignored or dismissed...but let's prioritize here.
posted by mickeyz at 4:33 PM on February 1, 2006

Norm Coleman (R-Cargill).
posted by rdone at 4:35 PM on February 1, 2006

A ban on AU wheat? How much do we import anyway?
posted by borkencode at 4:43 PM on February 1, 2006

I'm the first to admit I lack business savvy, but this issue has been dominating the news here in the last few weeks, and I can't quite understand it.

(a) What the hell is a "kickback" in this context? Why would you pay money to someone who is buying a product off you? It would be like, well, being paid to shop.
(b) The "trucking company" the AWB paid to transport the wheat (hang on again...why wouldn't the Iraqi government pay for transport of the commodity they're buying?..but I digress) didn't actually transport any wheat at all. So what happened to the wheat? Who did transport it? Why wouldn't the AWB know if a service they were paying money for simply wasn't occurring?

At the end of the day, we all know it's going to be water off a ducks back to the Howard government, and some petty bureaucrat will get it in the arse.
posted by Jimbob at 4:45 PM on February 1, 2006

Given the huge amounts of farmland we have in middle America, why the are we importing wheat to begin with? It's not like we're a wheatless nation or anything.
posted by unreason at 4:50 PM on February 1, 2006

I'm trying to google up statistics on how much wheat the US imports for australia without any success.

Both the US and Australia are wheat exporters, so I'm real confused about this threatened ban.
posted by I Love Tacos at 4:56 PM on February 1, 2006

http://www.chron.com/content/news/photos/05/04/14/unpdf/Bayoil.Indictment.pdf

Bayoil

The real scandal

http://www.lewrockwell.com/wanniski/wanniski71.html

(Why are the link tags gone ?)
posted by Balisong at 4:56 PM on February 1, 2006

Honest John's biggest lies so far are: No GST, Ministerial guidelines, Children overboard, SIEV-X, Iraq and weapons of mass destruction. This affair is just one more to add to the list. As long as mortgage repayments don't go up he'll survive.
posted by tellurian at 5:00 PM on February 1, 2006

I think we can safely say why Oceanic Air went down now.
posted by mwhybark at 5:01 PM on February 1, 2006

I'd love it if this took down their government, the revolting stench of Howard is disturbing me here all the way over on the other side of the Tasman. What a horrible little weasel of a man.
posted by The Monkey at 5:07 PM on February 1, 2006

It might take down the government if it fucks with wheat farmers enough. They can be a mean bunch. But then...cane growers getting fucked by Howard didn't seem to have much of an effect.
posted by Jimbob at 5:15 PM on February 1, 2006

Both the US and Australia are wheat exporters, so I'm real confused about this threatened ban.

Even if the US doesn't actually consume any Australian wheat, cutting off trade with Australia might reduce speculation in Australian wheat. That would reduce liquidity which would allow prices to wander farther from the market equilibrium. Ultimately, that would make it easier for trade associations to fudge prices, but it would probably also be bad for Australian farmers and consumers.

My guess is that it is an irrelevant threat intended to send a message to the american public that we aren't happy with what Australia did.
posted by b1tr0t at 5:17 PM on February 1, 2006

"Both the US and Australia are wheat exporters, so I'm real confused about this threatened ban."
posted by I Love Tacos at 10:56 AM AEST on February 2

They're calling for Australian wheat to be banned in the reconstruction and humanitarian efforts going on Iraq, with any contracts going to American producers instead. There's $20 billion at stake, so there's certainly an agenda at work here for sure.

To be clear, the FTA Australia signed with the US dosen't directly play a part in this call for a ban, however, there seems to be a suggestion that resentment from American farmers from the FTA is a contributing factor here. Call it revenge, or simply taking advantage of an ample opportunity, if you will. Even as an Aussie, I can't blame `em for that.
posted by Effigy2000 at 5:20 PM on February 1, 2006

Honest John's biggest lies so far are: No GST

There was no GST in Howard's first term of government, then when he gave the public a chance to boot him out over whether or not to introduce GST, the chose to keep him.

To go off topic a bit, a part of me actually thinks that there are people out there who deliberately vote for governments like Howard's because they see people who are in opposition to Howard exaggerate the truth and take things out of context so often. Like, I'll be sitting at work and then people will discuss Kim Beasley's latest sling of poop at the government. Beasley might have a slight point, but because of the way he exaggerates the truth people out there see this as him trying to decieve them, so they further align themselves with the rival as a sort of revenge. Is exaggerating the truth actually a good political manouvir? Because opposition parties seem to do it all the time, and more often than not it just looks really, really bad and desperate (see the Queensland Liberals for another good example of this). Maybe some political scientists out there can tell me if I'm on the right track or not.
posted by Jase_B at 5:27 PM on February 1, 2006

mickeyz said 'Compared to U.S. support for the Hussein regime during the Iran-Iraq War and at the time Saddam was gassing the Kurds, this seems rather minor.'

That's putting it mildly. Presumably the gross hypocrisy is acceptable if it means the US grabbing another $20 billion in contracts to rebuild the country they just finished smashing up.
posted by jack_mo at 5:31 PM on February 1, 2006

jimbob: The kickback only needs to be a tiny fraction (%1) of the sale. Say you are shopping and you have two stores. One offers the goods, the other offers the goods plus a 1% kickback. If it's the groceries, you don't care, but if you're buying a $10,000,000 purchase with government funds, and 1% of that ends up in your own private bank account, that's a BIG incentive to rig the bidding (or whatever).
Likewise, from the seller's point of view, 1% is a trivial price to pay if it gets you a $10,000,000 sale.
posted by -harlequin- at 5:43 PM on February 1, 2006

I'll call it a 'major scandal' when a minister resigns (Vaile, I'm looking at you, you twat).

Oh, right, that's not done in this country any more...

Jimbob: a kickback works here because the wheat was being paid for out of the UN funds. So you pad your invoice to the UN and pass on the dosh to the blokes who are doing the ordering.
posted by pompomtom at 5:48 PM on February 1, 2006

I Love Tacos writes "Both the US and Australia are wheat exporters, so I'm real confused about this threatened ban."

Also the US and Australia might grow different kinds of wheat. The a large percentage of Duram wheat, which is used to make bread, is grown in Canada. Much of that is bought by the US. Dismanteling the CWB has been a priority of several US states practically since it's inception.
posted by Mitheral at 5:49 PM on February 1, 2006

This just in...

"The [Australian] Federal Government has rejected allegations from Labor that the Iraqi wheat scandal is undermining Australia's trade relationship with the United States.

A group of US senators is demanding the suspension of AWB from an export credit scheme and another senior American politician has written to the Australian ambassador in Washington raising concerns about a meeting with the former ambassador in 2004."

[...]

"Liberal Senator Bill Heffernan has warned US politicians will try to take advantage of the scandal to hurt Australian farmers."

[...]

"[Opposition Leader] Beazley says the whole affair is outrageous. "We now have the American Congress breathing down our neck considering that they've been misled - that's a very bad position to be in," he said."

I hope that that explains the reason why some US Senators are calling for a ban on Australian wheat a little bit better.
posted by Effigy2000 at 6:05 PM on February 1, 2006

Here's the ALLEGATIONS from our opposition party (Labor):

(As I briefly heard them. Corrections welcolmed)

* Australian federal election was coming up.

* US enquiry was about to begin.

* This would have hurt the chances of our incumbent government (a conservative party government) in the upcoming election.

* Pressure was put on the US government to drop the enquiry.

* The USA, not wanting to let their conservative buddies down said, "No worries mate. Consider it dropped."

But your boy Senator Coleman reckons the Aussies lied and that the enquiry would have gone ahead as planned if he (and the rest of the USA officials) had known better.

In his letter, Senator Coleman claimed Mr Thawley insisted at the October 2004 meeting that AWB would never be involved in kickbacks. He wrote this week that the revelations in the Cole inquiry were "extremely disconcerting in light of the fact that you came to my office and expressly denied these allegations".

Senator Coleman asked Mr Richardson, who was appointed ambassador to Washington in July last year, and Mr Thawley to contact his committee to explain why the Australian Government had tried to block an investigation into the kickbacks.
http://www.theaustralian.news.com.au/common/story_page/0,5744,18012676%255E2702,00.html

Hmmmm. I don't know. I tend to believe the Australian Labor Party's theory myself. As if the slimy Republican spin doctors and party strategists wouldn't be up to their necks in it. As if the US government wouldn't want to get involved in another country's election to help a more Republican-friendly party form government.
posted by uncanny hengeman at 7:02 PM on February 1, 2006

As if the US government wouldn't want to get involved in another country's election to help a more Republican-friendly party form government.

It might also be worthwhile looking at it from the US side - a useful ally like Australia giving money to Saddam Hussein? You wouldn't want that coming out, it's too close to home. Easier to just blame the French for the UN Oil For Food scandal.
posted by Jimbob at 7:10 PM on February 1, 2006

This level of politics is just disgusting. It's exactly the same crap as the US and everyone else knowingly perverting oil-for-food in order to profit in the short term. It was disgusting then, it was disgusting to pretend afterwards that you didn't know about it, it was disgusting to pretend that you weren't an enthusiastic party to it, and it's disgusting to use those deceitful pretences it as a pretext to justify illegal trade protectionism.

I might be tempted to call this "Realpolitik", but it isn't, it's just sleeze. Realpolitik is getting the job done regardless of how low you need to stoop to do it. This OTOH combines immoral action with incompetent action and no real returns. That makes it even lower than realpolitik. These senators (and their Auz counterparts) are just human slime.
posted by -harlequin- at 7:29 PM on February 1, 2006

The USA, not wanting to let their conservative buddies down said, "No worries mate...

Don't you mean "Sure thing, buddy"?
posted by pompomtom at 10:02 PM on February 1, 2006

Manager Blows Whistle On AWB Kickbacks.

"An AWB whistleblower has implicated many of the wheat exporter's managers as being involved in sanction-breaking deals with Iraq. The deals began when the wheat exporter was still controlled by the Australian Government."

Coo....... now it's really getting interesting!
posted by Effigy2000 at 10:54 PM on February 1, 2006

Beasley might have a slight point, but because of the way he exaggerates the truth people out there see this as him trying to decieve them, so they further align themselves with the rival as a sort of revenge.

[...]

Maybe some political scientists out there can tell me if I'm on the right track or not.

I am no political scientist either - but I hear ya.

I don't like Howard, but I dislike more the bleating morons who think the sun shines out of every Labor politicians' ass.

Makes me want to take "revenge" on them at the polling booth heh heh.
posted by uncanny hengeman at 5:26 AM on February 2, 2006

For those that like to listen, here's an MP3 of yesterday's Hack program discussing the ongoing saga.
posted by d-no at 4:28 PM on February 2, 2006

What happens in Iraq, stays in Iraq.

(courtesy of Crikey.)
posted by Ritchie at 2:42 AM on February 3, 2006