Australian PM Testifies in Oil-for-Food Inquiry

Prime Minister John Howard told a government inquiry on Thursday he never saw nearly a dozen diplomatic cables warning that Australia's monopoly wheat exporter might have been paying millions of dollars in alleged bribes to Saddam Hussein under the U.N.'s discredited oil-for-food program.

Howard was the most senior of three government ministers to testify this week at a so-called Royal Commission into alleged bribes paid by the Australian Wheat Board, now known as AWB Ltd. His testimony, which lasted just under an hour, came as a poll published this week showed his approval rating slipping.

Earlier this week, the deputy prime minister and foreign minister testified they knew nothing about the alleged multimillion dollar corruption until U.N. officials began investigating the company.

The majority of Howard's testimony focused on a series of 21 diplomatic cables sent between 2000 and 2004 alerting Australian officials to possible irregularities in AWB's contracts with Iraq. But Howard — like the two ministers who testified before him, Deputy Prime Minister Mark Vaile and Foreign Minister Alexander Downer — denied ever seeing the warnings.

In his written statement, Howard said his office is bombarded with some 68,000 cables a year from his foreign affairs and trade ministry and that four senior advisers only tell him about the ones they deem important enough.

"I believe that the contents of the relevant cables were not brought to my attention at any time during the relevant period," Howard said.

Questioned by inquiry lawyer John Agius about a January 2000 cable from an Australian official warning the government that another country — since identified as Canada — had complained to the United Nations about AWB possibly being involved in oil-for-food corruption, Howard said his advisers likely would have dismissed it.

"There was absolutely no belief anywhere in the government at that time that AWB was other than a company of great reputation," Howard said.

And asked by Agius why his advisers did not pass on a U.S. army captain's 2003 warning that Saddam was allegedly demanding kickbacks on all oil-for-food contracts, Howard replied that they probably did not consider it new information.

"Mr. Agius, the issue of whether the former regime had been corrupt and had corrupted programs was not contentious to me, it was accepted that it had," he said.

Howard maintained he was unaware of the allegations against AWB until U.N. investigators brought the matter to his government's attention in 2005.

"I'd never been presented with any hard evidence. I had always believed the best of that company, as had most people in the government," he said. "It hadn't crossed my mind that it would have behaved corruptly."

Howard — a staunch supporter of President Bush and an ally in the war in Iraq — has for years enjoyed strong support from voters due mainly to the strength of the Australian economy.

But a poll published Tuesday in the respected national broadsheet The Australian found his approval rating had fallen six percentage points to 47 over the past two weeks, though it was unclear whether the so-called "wheat for weapons" scandal or unpopular new laws were responsible for the decline. The Newspoll survey of 1,200 voters had a margin of error of 3 percent.

The inquiry was called to examine whether AWB executives — not government ministers — broke any Australian laws in their oil-for-food dealings. Cole does not have the power to file charges but can recommend that executives be prosecuted if they are found to have broken Australian laws.

Howard and his ministers were called to testify this week because any evidence that the government knew about the alleged corruption could be used as a defense by AWB executives if they are found to have deliberately paid kickbacks.

Opposition lawmakers accuse the government of rigging the inquiry's powers to ensure it cannot hold ministers accountable for failing to stop the alleged corruption.

But in a press conference following his testimony, Howard said his government had nothing to hide.

"It's very simple. When you have a prime minister and two senior ministers fronting a commission on oath and answering questions you can hardly be said to run a government that is hiding something, covering up something," he told reporters.