Farm and Food File

for the week beginning Sunday, April 16, 2006

Alan Guebert

USDA: Defenders of the corrupt

Documents made public in Australia’s inquiry of the $215 million in kickbacks paid to the Saddam Hussein regime show American-based Australian diplomats working hand-in glove-with U.S. Dept. of Agriculture and the State Dept. officials to quash American concerns about Australia’s lock on Iraqi wheat imports before and after the 2003 invasion of Iraq.

According to declassified Australian cables between Canberra, Washington and Baghdad from June to November 2003, Australian diplomats pressed “senior USDA officials and other appropriate political and agricultural figures” to pressure an export-directed U.S. farm group, U.S. Wheat Associates, to stop its “the smears and innuendo” of Australia’s monopoly wheat exporter, AWB, over what then appeared to be illegal payments to Iraqi officials.

In a June 7, 2003 cable to Canberra, Australian Ambassador to the U.S. Michael Thawley noted he had “made a demarche” to a high State Dept. official whose title and name were redacted in the declassified memo to go “through the previous history of our dealing with the US Wheat Associates.”

The official, reported Thawley, “said that he would pass on our concern to the (redacted name) this evening. He said that he regarded such allegations as absurd and could understand our reaction.”

But the allegations were not absurd.

Two years later an independent probe into the United Nations Oil For Food Program clearly showed AWB, Australia’s single desk wheat exporter, paid $215 million in bribes and kickbacks to Hussein and his cronies between 1999 and 2003 to get Aussie wheat into Iraq.

Later, in the same cable, however, the State Department official’s identity is unmasked. In a parenthetical aside, Thawley adds, “Since drafting this, Larson has called to say one option [for the U.S. State Dept.] would be to respond publicly to a question from an Australian journalist and reject the claims.”

U.S. Wheat Associates explain that “Larson” is Allen Larson, the former undersecretary for economic, business and agricultural affairs to then-U.S. Secretary of State Colin Powell.

Thawley ends by assuring Canberra “We will follow up with other [redacted] officials with more direct responsibility for programs next week.”

And he did.

In a June 14, 2003 cable from Washington to every high-ranking official back home--including Prime Minister John Howard and top trade official Mark Vaile--the embassy noted it had spoken with USDA Undersecretary J.B. Penn about the AWB-Iraq controversy.

Penn, the cable noted, “said it would be very unhelpful if Flugge continued to comment on” U.S. Wheat’s allegations of AWB wrongdoing and reports that newly conquered Iraq would not import American “genetically modified” animal feed.

Flugge is Trevor Flugge, the former AWB chief who only weeks before had been named co-leader (with U.S. grain executive Dan Amstutz) of the American-led effort to revitalize Iraq’s farm and food sectors.

Penn also alerted the Aussies that he “would hold a media conference with Amstutz on 16 June” to attempt to defuse angry American farm response over Flugge’s appointment in Iraq and the power he would continue to hold over U.S. food exports to Baghdad.

Other cables detail contacts Australian diplomats had to influence the growing American anger over Iraqi imports of Australian wheat. Two were with staff members of then-Senate Minority Leader Tom Daschle, D-SD, and Kansas Republican Sen. Pat Roberts.

The gist, noted the cable, is “given that senior senators are focusing carefully on the [Iraqi] contracts in question, we will at some point have to be ready to explain specific aspects of the contracting process.”

That “point” came in late 2005. After the UN kickback report was released, Australian Prime Minister John Howard appointed a commission to investigate AWB. The Cole Inquiry, which began its hearings in Feb. 2006, laid bare the scandal. Ironically, Prime Minister Howard testifies to the Inquiry April 13.

The cables are extraordinary in two ways. First, they show the lengths to which the Australian government went to protect the soon-to-be-tarred AWB, its hand-picked monopoly wheat exporter.

Second, and even more extraordinary, is how Bush Administration appointees took the word of Aussie officials over that of U.S. farmers. Who do they work for anyway--you or Australia?