Australian Pm Denies Knowledge of Saddam Bribes

The Australian prime minister, John Howard, today appeared before an inquiry into alleged kickbacks paid to Saddam Hussein's regime by Australia's wheat export body.

Mr Howard said that he had never been alerted to the possibility of corruption and had only ever believed the Australian Wheat Board (AWB), which is accused of paying nearly A$300m (£125m) in bribes to members of Saddam's regime, to be "a company of great reputation".

He denied that he had ever seen 21 diplomatic cables sent to Australia's department of foreign affairs and trade between 2000 and 2004, tipping the department off to the alleged bribery.

"I believe that the contents of the relevant cables were not brought to my attention at any time during the relevant period," he said, adding that his office received 68,000 cables a year and that he was only informed of those deemed essential by his advisors.

The inquiry has been called to investigate claims about the AWB's alleged bribery in the report of UN oil-for-food investigator Paul Volcker, published last year.

Several government ministers, including foreign affairs minister Alexander Downer and trade minister Mark Vaile, have been called to the stand in the past week.

One plank of AWB's defence is that the bribes were indeed paid to the Iraqi government, but that the kickbacks were paid with the knowledge and approval of the Australian government.

However, Mr Howard has followed the other ministers in denying any knowledge of the tip-off cables or suspicion of illegal activity by AWB. He said that he had never suspected anything of AWB until 2005, when the Volcker inquiry first raised the matter, and said that the government had been "systematically deceived" by the company.

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

Earlier in the inquiry, evidence was given that Australian officials in New York had been alerted by the Canadian government to the threat of corruption.

The information was passed on to Bob Bowker, then an official in the department of foreign affairs and trade and now Australia's ambassador to Egypt. Mr Bowker dismissed the report, the inquiry heard.

Mr Howard spent 50 minutes on the stand, compared to more than three hours for Alexander Downer during his cross-examination on Tuesday.

The allegations are potentially damaging for the Australian government, which was a staunch supporter of the 2003 Iraq war and an opponent of Saddam Hussein's regime.

Australian newspapers have been incredulous about the memory lapses claimed by members of the government, with one describing Mr Downer's testimony as a "fairytale".

It is not the first time the government has faced a potentially damaging inquiry into its actions but escaped censure by claiming ignorance of the affair.

A 2002 parliamentary investigation into the "children overboard" affair, in which the government made false claims about asylum seekers throwing their children into the sea at the height of an election campaign, found that Mr Howard's inner circle had not been informed about all details of the affair.

The government's poll ratings have struggled to stay above those of the opposition Labor party since the inquiry began in January.

The investigation has come on the back of difficult times for the government, provoked by reforms of Australian labour laws.