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American farmers suing AWB for $1B
FACT BOX. The Howard government set up what is known as the Cole inquiry in November 2005 to investigate possible breaches of Australian law, in response to the findings of the Volcker report on the U.N. oil-for-food program. . The inquiry is headed by Terence Cole, a former Judge of Appeal of the New South Wales Supreme Court. . The three companies under investigation are Australia's monopoly wheat exporter AWB; Kingaroy company Alkaloids of Australia; and Melbourne manufacturer Rhine Ruhr.. The AWB was controlled by the Australian government up until its privatization and listing on the stock exchange in July 1999.. The Cole inquiry is looking into the alleged payment by AWB of about $220 million in kickbacks to Saddam's regime, at a time strict U.N. sanctions were in place, to secure about $1.725 billion in wheat contracts. The contracts were paid under the humanitarian oil-for-food program.. Evidence put to the inquiry suggests some AWB executives knew payments would breach U.N. sanctions.. Among those called to testify were Prime Minister John Howard, Deputy Prime Minister and Trade Minister Mark Vaile and Foreign Minister Alexander Downer.Sources: Cole Inquiry; ASXYOUR E-MAIL ALERTSSYDNEY, Australia -- North American farmers are claiming $1 billion in damages from AWB, alleging the Australian wheat exporter used bribery and other corrupt activities to corner grain markets, The Australian Associated Press reports. The farmers are reported to have filed a class action in Washington D.C. in a case which will draw on evidence obtained by Australia's Cole inquiry, which has probed allegations the Australian wheat company paid $220 million in kickbacks to the former Iraqi regime of Saddam Hussein. The Cole inquiry is due to report its findings into the wheat trade accusations on September 30 this year. The U.S. case also will use documents unearthed by a United Nations investigation into its oil-for-food program under which AWB says it unwittingly made the illicit payments to Baghdad. But the claim goes further, alleging AWB used similar methods to secure grain sales in other markets in Asia and the Middle East, AAP reports. U.S. and Canadian farmers accuse the former Australian Wheat Board of sewing up markets to the exclusion of North American producers. They are using U.S. legislation designed to target the Mafia and outlaw criminal motorbike gangs, called the Racketeer Influence and Corrupt Organizations (RICO) Act. The claim, obtained by Fairfax newspapers, has been lodged with the U.S. District Court and alleges AWB's activities hurt thousands of American and Canadian farmers. A spokesman for growers involved in the suit, Bill Fletcher, said he expected the case to reveal more evidence about AWB's alleged activities. "We have also evaluated hundreds if not thousands of documents obtained through the oil-for-food program that through the course of this inquiry, this trial, there'll be many more details about the specific actions of the AWB and how they effectively cornered and dislocated the international wheat market," he told Australian Broadcasting Corporation radio Tuesday. "What the AWB did at the expense of American wheat farmers and Canadian wheat farmers is create a situation where the global price of wheat became inflated and there could literally be damages in excess of $1 billion." AWB, which is yet to be officially served with the writ, said it would defend the claim. "Such actions are ill conceived and if any action is formally brought against AWB we will vigorously defend," spokesman Peter McBride said, according to AAP. As well as the Iraq allegations, the farmers' statement of claim accuses AWB of bribing officials in Pakistan and Yemen to secure wheat contracts and sabotaging the Indonesian market to shut out U.S. rivals, according to Fairfax. The Cole inquiry has touched on the Pakistan allegations but has not delved into trading in Yemen or Indonesia. The claim also focuses on evidence uncovered by the Cole inquiry that AWB recovered a $8 million debt for BHP-related company Tigris Petroleum by artificially inflating wheat prices through oil-for-food contracts. The documents filed with the U.S. court accuse AWB of conspiring to use tactics including bank fraud, bribery and money laundering, AAP reports. The class action names only six farmers but allows for more than 20,000 to join the lawsuit. Powerful American lobby group U.S. Wheat Associates -- which went public in 2003 with claims about AWB's activities in Iraq -- has said it would consider joining the action if it was approached. 
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