MITCHELL:
Mr Howard good morning.
PRIME MINISTER:
Good morning
MITCHELL:
Thank you for your time under difficult circumstances, I appreciate it. Prime Minister June 10th 2003, a member, a person, an AWB person who was in fact seconded to your Government has told the Department of Foreign Affairs and Trade that the people running Iraq are concerned about kickbacks being paid to Saddam Hussein, that have been paid. What did we do? What did the Department do? Who asked any questions?
PRIME MINISTER:
Well that email which is the basis of what you quite rightly say he did, did not make any reference to AWB.
MITCHELL:
No but did anybody ask any questions?
PRIME MINISTER:
Well questions had been asked of AWB before that.
MITCHELL:
Did anybody act on this memo?
PRIME MINISTER:
Yes, there was a request for comment sent to AWB. As to all of the details of the particular response on that occasion well I'd have to get advice from Foreign Affairs about that because I'm responding to events in the commission yesterday. But I make two points. Firstly, the email itself did not refer to AWB, although one would get the impression from the headlines this morning that that email named AWB and contained an allegation about AWB. It did not.
MITCHELL:
Yes but AWB was the largest supplier from Australia, it's reasonable to ask whether they were implicated.
PRIME MINISTER:
Well there were a lot of other companies involved in the oil-for-food programme.
MITCHELL:
But this was the biggest Australian company wasn't it?
PRIME MINISTER:
Well of course it was the biggest Australian company, but I make the additional point that prior to this, on, I think, two occasions, there had been, and this has come out in evidence, it's not a new revelation, on at least two occasions complaints had been made about alleged misbehaviour; the alleged possible payment of bribes, I think I can put it that way, by AWB. Those allegations had emanated from what were really commercial rivals of AWB, one in Canada and the other in the United States, and they were investigated so I'm told by DFAT, and in one case not only did DFAT get involved, but also the United Nations got involved. The United Nations asked for details of the standard conditions applying to contracts involving AWB and the Iraqi Grains Board.
MITCHELL:
But doesn't that make it worse, doesn't it make it worse that we've got these allegations coming, alright from commercial opponents and now we've got the people who run Iraq saying we're worried about kickbacks. Why did that not ring massive alarm bells within Government?
PRIME MINISTER:
Well I don't think it makes it worse.
MITCHELL:
Alright, well why didn't it ring alarm bells?
PRIME MINISTER:
Well the complaints that were made on the earlier occasions, the American and the Canadian complaints, they were invested. And in one case the investigations involved the United Nations and the United Nations expressed satisfaction and I think it used the language that the misperception had been removed. Now all along, let me make this clear and this really does put the thing in context, all along the Government, through DFAT, believed that AWB Limited was a company of complete integrity. I have to say that when the evidence first started coming out in the inquiry I was surprised. I don't make a judgement because the inquiry is still going on, and AWB's entitled to its full day in court. Much in all as there's been an emphasis on the evidence against AWB, we have to wait until the inquiry is completed before we make a judgement about AWB Limited.
MITCHELL:
But you believe the Government's been misled?
PRIME MINISTER:
Oh yes.
MITCHELL:
Okay. Was the Government naive? Was the Government not naive?
PRIME MINISTER:
No, I don't accept the Government was naive.
MITCHELL:
We've got all this information coming from all different sources saying there are kickbacks and nobody is properly investigating?
PRIME MINISTER:
Well I don't accept that.
MITCHELL:
Okay, what was the investigation?
PRIME MINISTER:
Well in the first two cases they involved inquires of AWB and they also involved AWB dealing directly with the United Nations.
MITCHELL:
Okay, what about when this June 10 memo turned up?
PRIME MINISTER:
Well the precise action taken by DFAT in follow-up to that, I will have to get more advice because I only learnt about it last night.
MITCHELL:
Have you seen the email?
PRIME MINISTER:
I have seen the email, yes.
MITCHELL:
And it doesn't name AWB?
PRIME MINISTER:
No.
MITCHELL:
Did the Minister see it at the time?
PRIME MINISTER:
I have no idea. I certainly didn't see it.
MITCHELL:
Should the Minister have seen it at the time?
PRIME MINISTER:
Not necessarily. I mean Neil, now come on, let's get a sense of perspective. In any Government department there are hundreds of thousands of emails...
MITCHELL:
But this isn't a minor matter Prime Minister....
PRIME MINISTER:
Well we now see it in the context of this inquiry. At the time to suggest that it should automatically have gone to the Minister, I don't know whether it did or it didn't, you'd have to ask Mr Downer.
MITCHELL:
Well are you going to find out whether he saw it?
PRIME MINISTER:
Look of course I will make further investigations.
MITCHELL:
Would you agree if he saw it, he should have acted?
PRIME MINISTER:
No, look, I'm not going to hypothesise, I'm not falling into that trap.
MITCHELL:
Okay. So we do not know yet what inquiries were made after this memo arrived?
PRIME MINISTER:
I don't know what was the full extent of the inquiries, no I don't.
MITCHELL:
Is the Minister, even if he didn't see, is the Minister still not responsible for this?
PRIME MINISTER:
Well it depends on whether he was involved in any way in a policy of cover-up or benign or malign indifference, whichever word you want to use, towards what was going on. Clearly that is no. I mean Mr Downer based on the discussion and it's really Mr Vaile as much as Mr Downer, based on my discussions with them, both of them were just as horrified as I was when evidence began to be given of the involvement of AWB. We have from the very beginning, and I want to make this very clear, told AWB Limited in no uncertain terms that it should cooperate fully with the Volker Inquiry and it goes without saying it has to cooperate fully with the Cole inquiry. But any suggestion that the Government, as Mr Rudd is alleging was involved in a cover-up is wrong and it's a complete distortion of the Government's behaviour.
MITCHELL:
Well aren't you pre-empting the inquiry a little in that sense, we don't know yet Prime Minister.
PRIME MINISTER:
Hang on, hang on, I can speak of my own knowledge, of my own conduct.
MITCHELL:
And what about your Foreign Affairs Minister?
PRIME MINISTER:
Well I do not believe that either Mr Vaile or Mr Downer were involved because I've talked to them about it. I plainly cannot make a judgement about the conclusions of Mr Cole in the inquiry according to his terms of reference.
MITCHELL:
But is ignorance a defence here for Mr Vaile and Mr Downer, if they were ignorant, they should've known, they should've acted.
PRIME MINISTER:
You're asking me to hypothesise.
MITCHELL:
No but you said they assure you they knew nothing, is that a defence? Don't they carry responsibility?
PRIME MINISTER:
I think the question of direct knowledge of something goes to the question of whether people have behaved wrongly.
MITCHELL:
So when does a Minister....
PRIME MINISTER:
Hang on Neil. The allegations that are being made against the Government by our political opponents and by some in the media, I stress some, the allegations being made are that we were complicit, that we covered up, in other words we deliberately behaved with dishonesty and with essentially fraudulent intent; now that's the allegation that's being made. Now I'm not going to have that allegation made about me or about my ministerial colleagues and I, incidentally, on the information I've been given, and on the briefing I've received, and the advice I've received, I don't believe that officers in the Department of Foreign Affairs and Trade have been guilty of that either.
MITCHELL:
Okay well you reject dishonesty. Will you accept incompetence?
PRIME MINISTER:
No I don't accept that for a moment. I don't accept that.
MITCHELL:
From anybody in the Department?
PRIME MINISTER:
No, I think it is (inaudible) to certain departmental officials that are going to be called and those departmental officials will give evidence. Now let's wait and see what they give and what evidence they give but I'm not saying I'm accepting that. I can speak with authority in relation to my own conduct because I'm aware of it. I can speak with authority in relation to the conduct of two very close ministerial colleagues. I believe them and I know enough of their behaviour as Ministers to know that they're not the sort of people that would knowingly of in any way condoned this kind of conduct. I know that from the nature and the character of them. I also know this Neil, that when this thing came onto my radar I made it very clear, in other words in relation to the Volker Inquiry, I gave very clear instructions that there should be full cooperation with the Volker Inquiry, there should be total transparency and a willingness to disclose everything and I am advised that all of the documents directly relevant to the matters under investigation by the Inquiry, within the Department of Foreign Affairs and Trade, and I believe within my own Department, are in the hands of the commission. You can't be more cooperative than that. That is not the behaviour...
MITCHELL:
This after the event though Prime Minister. I mean the question is if it wasn't covered up, why wasn't it dealt with?
PRIME MINISTER:
Hang on. It goes, though, to the allegation of a cover-up. If I were engaged in some kind of cover-up or my colleagues were, we wouldn't be handing over all our files.
MITCHELL:
But aren't these the only options? It's either a cover-up or a stuff up?
PRIME MINISTER:
Well I don't accept that. But there has certainly been no cover up, there has been no stuff up by Ministers. I do not believe, on the basis of the information I have received, that people in the department have been in any way complicit in what's happened.
MITCHELL:
The 300, you now accept that $300 million kickbacks were paid through the AWB?
PRIME MINISTER:
Well that is the allegation made by Volker, I have to in fairness to the process that I established, I mean I wonder how many other countries have established inquiries like the Cole inquiry. We have been very upfront, we have been very open and the fact that all of this material is coming out is a direct result of an inquiry that my Government established.
MITCHELL:
But we're also the worst in the world if the allegations are right, we paid $300 million.
PRIME MINISTER:
Let us wait until the inquiry has brought down its findings. I am in a difficult position, I am not going to remain silent and to allow my reputation and that of my Government to be constantly traduced by the Labor Party and others each day with these wild allegations of dishonesty. This absurd allegation of Mr Rudd's that I personally sent the ambassador, the former ambassador to the United States to talk to an American committee chairman in order to cover something up in the last election campaign, I can assure Mr Rudd that the last thing that was on my mind in the last election campaign was AWB Limited.
MITCHELL:
The Americans certainly deserve an apology from us though don't they?
PRIME MINISTER:
Well let's wait and see. I would like an apology from the American Senator alleging that evidence had been given implicating government officials in the alleged scandal. No such evidence has been given. There is no evidence before the commission implicating, I mean the word implication means that we were part of or involved in, no such evidence has been given but I really do have to legitimately ask that until the inquiry is completed, it's not reasonable of me to make a judgement. It's not for me to make a judgement about AWB's culpability, that's the role of the inquiry.
MITCHELL:
Would you agree to a widening of the terms of reference?
PRIME MINISTER:
Well what I've said is that if I'm asked I will consider the request on its merits.
MITCHELL:
Have you been asked, I understand Mr Cole's making a statement?
PRIME MINISTER:
No. He's making a statement, I don't know what he is going to say, I have no idea.
MITCHELL:
Are you happy for Mr Downer to give evidence at the inquiry?
PRIME MINISTER:
Yes. I said two weeks ago, ten days ago that if any DFAT or other officials are called they should go and give evidence and tell the truth. If I am called I'll go, I'll happily go, if Mr Downer is called he will go, if Mr Vaile or anybody else is called, they will go, of course.
MITCHELL:
Prime Minister how can we have two people representing Australia wandering around Iraq posing with guns, pointing them at cameras?
PRIME MINISTER:
Well they weren't in a strict sense representing Australia in a diplomatic sense.
MITCHELL:
No, no but they were seconded.
PRIME MINISTER:
Well I mean Neil I know that looks bad, I know that. I know that looks silly and it's very unhelpful but did I know about it, would everybody who's ever been overseas on behalf of Australia or an Australian company agree to every photograph of them being published?
MITCHELL:
That says something about the quality of the people that you appointed.
PRIME MINISTER:
Well because they are before the inquiry it's not fair of me to try and offer comment on that. I did appoint them at the time. Mr Flugge who was then the Chairman of the AWB Limited, I think he is still the Chairman, he had a very good reputation in the wheat industry. He was regarded as a strong participant in the industry, I acknowledge that he was appointed by the Government and I supported his appointment and I accept responsibility for his appointment. I had no reason to believe at that time that he was other than a very strong, powerful advocate for the Australian wheat industry and what I was concerned about at that time and what should be seen as the context of so much of what the Government did at that time was I was concerned to protect the interests of Australian wheat growers. I didn't want the Iraqi wheat market stolen by the Americans.
MITCHELL:
Prime Minister there's been evidence that kickbacks were common knowledge in 1999 amongst the industry, when did you first hear of kickbacks?
PRIME MINISTER:
Well I couldn't locate the precise date, but I'd have to go back over all of my files but I certainly alleged in 2003 on the eve of the military operation, that Saddam Hussein had rorted the oil-for-food programme. I guess I predominantly had in mind then that he had used some of the money that should have gone for food and medicines for his people, he used that for weapons. Given the generally poor view that most people had of Saddam Hussein at that time and earlier, it is probable that it would have been generalised claims about corruption in the Saddam Hussein regime around about then or before then but exactly when, I couldn't pinpoint that.
MITCHELL:
And you never had the slightest suspicion that Australia could be implicated?
PRIME MINISTER:
It never entered my head that AWB would be involved in illegal behaviour.
MITCHELL:
You trusted them?
PRIME MINISTER:
Well I had no reason not to and when it first really came onto my radar screen in the context of the Volker Inquiry, that there might be a problem with AWB, my immediate reaction was to say well gee, I don't know whether this is right or wrong, I still found it hard to believe, but there has got to be total cooperation by the Government and there's got to be total cooperation by AWB with that inquiry and I made that very, very clear in unmistakable terms to everybody involved.
MITCHELL:
Prime Minister, final question do you accept that this $300 million has been used effectively to fire bullets at Australians?
PRIME MINISTER:
Well no I don't accept that, I mean that is...
MITCHELL:
Reward suicide policy ...
PRIME MINISTER:
That is the rhetoric, I mean obviously that is the easy-to-make, easy-to-indulge in rhetoric of the Australian Labor Party. Look I, if the ultimate conclusion is that bribes were paid by AWB Limited well that will be something wholly to be condemned but I can't, in fairness to the process that I established, I am not going to make that judgement yet, I just can't because the inquiry was established to do that, the man conducting the inquiry is a first-class lawyer who is widely respected, he's acting very independently and I have to place on record my strong rejection of allegations made by some American congressmen, including I think Senator Coleman, that the inquiry is not independent of the Government, that is offensive to Mr Cole and it's offensive to the Government, I mean for example I don't, you ask me what is he going to say at 10 o'clock, I don't know.
MITCHELL:
Prime Minister thank you for your time, I appreciate it.
PRIME MINISTER:
You're welcome.
[ends]