The Government is in diabolical trouble after yesterday’s evidence to the Cole Inquiry into the Iraqi bribes affair.

The sheer fact that Foreign Minister Alexander Downer has decided to deal with allegations via a letter to the editor of The Australian, rather than by a doorstop or a presser, speaks volumes.

No wonder his opposition counterpart, Kevin Rudd, had such fun talking about “a bunker in the Adelaide Hills” on Radio National
this morning – let alone his main accusation, that the Government is
“at minimum guilty of culpable negligence” in “the biggest bribery case
in Australian history.”

But more of Downer’s behaviour should be looked at – namely his conduct in 2002, before the Iraq war.

In
some parts of the world, a grave insult to a person’s honour can be
compensated for by the payment of money. Even our cultural mores
reflect this – via defamation damages. Alexander Downer had harsh words
to say about Iraq and Saddam Hussein back then, and in those days, of
course, Saddam was Iraq.

The US has since pinched our
wheat markets in Iraq. They were also ready to move in 2002 – through
the appropriate intermediaries, of course. DFAT would have known
Australia was over a barrel. So…let’s take a trip down memory lane.

Alexander
Downer’s sabre-rattling over Iraq reached a new level in July 2002.
This led to a major trade and political crisis. Iraq announced it was
halving wheat imports from Australia – and threatened to end them
altogether if Downer did not relax his rhetoric.

The Foreign Minister did not resile – much to the anger and consternation of the AWB.

The
opposition then got in on the act, with Kevin Rudd criticising Downer.
The Foreign Minister continued to refuse to back down – in public – but
media reports from the time indicate that in private the Government was
frantically encouraging the AWB to send a delegation to Iraq to mend
fences.

This, of course, lead to the August 2002 emergency
mission which stitched up some sort of compromise – which, it appears
from the evidence tendered to Cole, involved major, illegal kickbacks
to Saddam’s regime. Apology money. Apology money designed to protect
the markets threatened by Downer’s statements.

If this is the
case, corruption at this stage arose solely from the Wheat Board’s
efforts – supported by the Government – to repair damage to the
economic interests of a key conservative constituency caused by
Downer’s comments. Hundreds of millions of dollars were at stake if we
could not deliver wheat to Iraq.

Foreign Affairs must have
been involved in brokering a solution, given its trade and security
policy roles. No wonder the AWB is trying to spread the blame.

Here’s some background reading on the matter for the truly keen:

  • Downer transcript from 23 July 2002 – Lex digs a hole for himself
  • AWB Outcome on Iraqi Wheat Exports Positive – a Mark Vaile media release from 18 August 2002
  • A transcript of the Prime Minister on the same day where he is fulsome in his praise of the AWB – and talks about how trade and politics must be kept separate
  • Wheat deals secured but Iraq sets conditions, 21 August report from Infarmation – with previous reports linked
  • A response to a Question on Notice from Tasmanian Senator Kerry O’Brien from October 2002 that underlines the importance of Iraqi wheat exports.

Was the war just debt recovery – with extreme prejudice?

PS: Why isn’t Philip Ruddock getting more questions over the way he downplayed
an OECD report recommending the Government increase fines for companies
that bribe foreign officials earlier in the week? His remarks were
regrettable enough, let alone the timing.