Australia wheat board's Iraq ‘kickback’ chairman in court

The former chairman of an Australian wheat firm that allegedly paid bribes to secure U.N. oil-for-food programme contracts in Iraq appeared in court

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The former chairman of an Australian wheat firm that allegedly paid sanctions-busting bribes to secure U.N. oil-for-food programme contracts in Saddam Hussein’s Iraq appeared in court Monday more than a decade after the scandal erupted.

Trevor Flugge is facing a civil case by corporate regulator, the Australian Security and Investment Commission (ASIC), of breaching his duties as a company director.

The AWB, formerly Australia’s monopoly wheat exporter, allegedly paid Saddam’s regime some $225 million in bribes to secure lucrative grain deals with Iraq between 1999-2003 under a U.N. oil-for-food scheme.

Iraq’s government suspended business with AWB in 2006 after its role in the scandal was confirmed by an official Australian inquiry that saw the then Prime Minister John Howard called as a witness.

Two former AWB executives were previously fined over their role in the scandal but police dropped a criminal investigation in 2009 after an independent review of the evidence found there was little prospect of a successful prosecution.

ASIC is now seeking to prove that Flugge knew, or ought to have known, about the scheme.

“As chairman of the board of this company Mr Flugge could have done many things which would have put an effective end to what occurred,” ASIC counsel Norman O’Bryan said as he outlined how the kickbacks were hidden within AWB contracts with the Iraq grain board.

He added that unknown to Australia’s international competitors, AWB accepted a lower price for its wheat and the secret payments effectively handed currency to an Iraqi government desperately in need of all the international money it could get.

“In effect AWB became an exporter of two commodities from Australia, wheat and cash,” the Victorian Supreme Court was told, Australian Associated Press reported.

Flugge has denied helping negotiate any kickbacks.

In a statement released by his lawyers, Flugge said he and his family had lived with untested allegations, rumors and innuendo since ASIC first started action in 2007.

“For the sake of my family I trust that these will finally be put to rest,” he said. “I fervently believe now, as I did from day one, that I have done nothing wrong.”

The trial is expected to last 10 weeks.