Australian Broadcasting Corporation



Broadcast: 27/11/2006

Cole inquiry report slams AWB

Reporter: Nick Grimms

KERRY O’BRIEN: While Commissioner Terence Cole may have cleared Government ministers and bureaucrats of knowing the oil for food program was being rorted, the same can't be said for a procession of former AWB executives. As a result of what Commissioner Cole described as a failure of corporate culture, he's recommended a legal task force investigate a series of criminal prosecutions involving up to a dozen former AWB managers and employees. Nick Grimm reports.

NICK GRIMM: From the very first day of public hearings, it was clear that the Cole Inquiry's investigators were confident they'd the goods on AWB.

JOHN AGIUS, COUNSEL ASSISTING THE COLE COMMISSION: AWB always knew that Alia was a conduit for the payment of money to Iraq.

COMMISSIONER TERENCE COLE: If I so find I must then consider whether such matters should be referred to the relevant Commonwealth, state or territory agency for consideration of any further action.

NICK GRIMM: And so it has come to pass. Now, almost a year later and after hearing from more than 70 witnesses, whose evidence generated 7,500 pages of court transcript, Terence Cole has found a succession of AWB senior executives were up to no good.

REPORT: The reason for the dishonest concealment from DFAT and the United Nations was that senior management at AWB wanted to retain its substantial wheat trade with Iraq and were therefore disposed to meet the IGB’s demands for the payment of these fees.

MICHAEL INGLIS, TAX BARRISTER: The people in this task force to which the matters are now to be referred will have a great deal to work with and I would be astonished if at the end of the day a number of significant charges are not laid.

DR BEN SAUL, INTERNATIONAL LAW, UNIVERSITY OF NSW: It could prove extremely damaging to Australia's farmers. It could lead to further legal actions in the United States, for example, against AWB. So there could be very serious consequences.

NICK GRIMM: Once they were the Golden Boys of the Aussie wheat trade, with a Midas touch when it came to selling the golden grain. Former AWB chairman Trevor Flugge became known as the million dollar man, because that's how much the Howard Government paid him to be its agricultural adviser in post war Iraq. Not bad for an old fella who claimed he was deaf in one ear and hard of hearing in the other. But Terence Cole found he was up to his ears in the scandal, and one of those who could be facing criminal charges. Michael Long was also employed by the Australian Government to work in post war Iraq, though the inquiry revealed he was working for the AWB under the codename Proton. The inquiry report concludes he, too, was well aware that payments to the trucking company Alia were really destined for the Iraqi regime.

REPORT: In my view, Mr Long might have aided, abetted, counselled or procured the offences that AWB might have committed.

NICK GRIMM: Barrister Michael Inglis is an expert on corporate fraud.

MICHAEL INGLIS: The report is not a dud. The penalties that the various offences carry as a maximum range from 12 months imprisonment up to 10 years imprisonment. So they're not minor offences on any view.

NICK GRIMM: The report also comes down hard on the so called rollovers, former AWB executives such as Mark Emons and Dominic Hogan, who spilt the beans in the hearing room. But it seems it won them few favours. Terence Cole has concluded they, too, may need to face charges. In Dominic Hogan's case, that's despite Terence Cole expressing his appreciation for the assistance he provided to the inquiry. Terence Cole has recommended that a joint task force be established comprising the Australian Federal Police, Victorian State Police along with the corporate watchdog the Australian Securities and Investments Commission to consider laying charges under the Crimes Act and the Corporations Act.

MICHAEL INGLIS: I'd suggest that the public expectation is that at the end of this long and very hard fought process it would be simply scandalous if the task force was not properly resourced.

NICK GRIMM: Meanwhile, there's been one notable exception from those who've received adverse findings. Andrew Lindberg was another of AWB's bald faced high flyers and, like other witnesses who struggled with their hazy memories, the former CEO was humiliated in the witness box.

NICK GRIMM: Mr Lindberg, there are calls today for you to stand down from your position. Is your position tenable as a result of the evidence you've given today and yesterday? Do you have any comment to make at this stage, sir?


NICK GRIMM: Andrew Lindberg was destined to become the first AWB casualty, forced to resign as a result of the scandal. But he's been found to have been a victim rather than a culprit.

REPORT: Mr Lindberg was not well served by some of those who reported to him, and on whom he relied. He has paid a very considerable price in reputational and, no doubt, monetary terms. I wish to make clear that on the material before me he has not been guilty of any criminal conduct.

NICK GRIMM: So where did it get the AWB's golden boys in the end? Well, it's destroyed quite a few high flying careers and reputations. But perhaps worst of all, Australia's once stranglehold on the Iraqi wheat trade has pretty much been lost, with the United States the latest competitor to step in and clinch a deal.

KERRY O’BRIEN: There'll be a lot more fallout from the report and we'll continue to look at that. Nick Grimm.