Australian Pm to Face Bribe Inquiry

The Australian prime minister, John Howard, is to appear before an inquiry into claims that a former government agency bribed Saddam Hussein's government to assist wheat exports to Iraq.

Mr Howard will appear before the Cole inquiry tomorrow morning, following appearances by his foreign affairs and trade ministers Alexander Downer and Mark Vaile in recent days.

The inquiry is examining whether the Australian Wheat Board paid A$300m (£125m) in kickbacks to Saddam's government between 1997 and 2003.

AWB, which manages Australia's wheat exports, is now a private company but was a government agency until 1999.

"The Cole commission of inquiry has requested that I appear at its hearings," Mr Howard said in a statement. "As I have said previously, I am happy to do so."

Claims that Canberra knew of bribes being paid to Saddam's government could prove highly damaging to the government.

Australia was one of Washington's key allies in the 2003 Iraq war and an active supporter of UN sanctions against the country.

Wheat exports were permitted under the sanctions regime, but any bribes would have violated the agreement.

Mr Downer and Mr Vaile spent several hours in the witness box this week as they were questioned about 21 diplomatic cables between 2000 and 2004, tipping the Australian government off to the alleged bribes.

The ministers said they had no memory of seeing the cables, many of which were sent by Australia's intelligence services. Mr Downer said that he only ever had time to read summaries of the cables "when I'm stuck on a plane".

The inquiry was initially set up to look at the conduct of AWB officials and there have been a string of high-level resignations from the company since hearings started in January.

But increasingly the focus of the investigation has turned on how much the Australian government knew about the alleged corruption. Earlier in the inquiry Tim Snowball, a senior executive in AWB's New York office, said that he had discussed the bribery with an official from Australia's department of foreign affairs and trade (DFAT), Bronte Moules.

During the March 2001 meeting Ms Moules had said the UN sanctions committee was turning a blind eye to low-level bribery, he testified.

Last month the inquiry heard how DFAT had dismissed a cable sent to Canberra by Mr Moules in 2000, which passed on Canadian fears that an exports-for-bribes scheme was in place.

Australia's current ambassador to Egypt Robert Bowker, who was then working in the DFAT department that received the cable, dismissed it after deciding that AWB was unlikely to be involved.

Mr Howard has already submitted confidential written testimony to the inquiry, and he will be cross-examined on that statement tomorrow.

He will be Australia's first prime minister to appear before such an investigation since 1983, when Bob Hawke was called before an inquiry into KGB activity in Australia.

The existence of the system of kickbacks was first alleged in the report of the UN's Volcker inquiry into the oil-for-food scandal when it was published last October.

The payoffs are alleged to have been channelled via Alia, an Australian-owned trucking company based in Jordan.

Iraqi dock officials are claimed to have refused to unload wheat from Australian ships without the paying of bribes.

The opposition Labor party has demanded that the inquiry be extended to rule on the competence of the government to investigate AWB.

At present the terms of reference only relate to finding out how much the government knew about the alleged sanctions-busting.