Prime Minister John Howard on Monday denied his government's involvement in paying bribes to Saddam Hussein to sell Australian wheat to Iraq during the oil-for-food programme.
Howard told local radio that officials in Canberra didn't know the Australian Wheat Board (AWB) was paying bribes to the former Iraqi president to make sales under the United Nations corruption-ridden programme.
"We were in no way involved with the payment of bribes. We didn't condone them, we didn't have knowledge of them, but we did work closely with AWB," he said.
The prime minister said letters exchanged between the government and Australia's monopoly wheat exporter didn't prove that the government was party to corrupt contracts.
"I had no reason to believe that AWB Ltd wasn't just going all-out to preserve Australia's wheat sales to Iraq," Howard said.
"I would have been failing in my job as prime minister if I hadn't done everything I could to maintain and protect the wheat market because it was one of our best."
Howard was responding to claims by the Labor Party's Kevin Rudd, the opposition's foreign affairs spokesman, that the government was in league with the board in deceiving the United Nations and funnelling money to the former Iraqi dictator.
"These letters demonstrate at the highest levels of the Howard government is that there was a pattern of systematic briefing, contact and engagement with ministers, their advisers and officials throughout this period," Rudd alleged.
{{/usCountry}}"These letters demonstrate at the highest levels of the Howard government is that there was a pattern of systematic briefing, contact and engagement with ministers, their advisers and officials throughout this period," Rudd alleged.
{{/usCountry}}The board's chief executive, Andrew Lindberg, has admitted to making illicit payments to a Jordanian front company that were channelled to Saddam.
The admission was made in evidence to a judicial inquiry set up by the Australian government to investigate almost 300 million Australian dollars ($222 million) in kickbacks paid to Saddam to protect the board's share of the Iraqi wheat market.
The inquiry has been told that in 2002 Lindberg and fellow board staff visited Iraq in company with Australian diplomats.
In Baghdad, Lindberg agreed to pay $2 million in bribes that were to be paid through an inflated wheat contract, the inquiry was told.
Investigators looking into the oil-for-food programme said the board was among more than 2,000 firms accused of paying about $1.8 billion in kickbacks to Saddam.
The oil-for-food programme was a $67-billion, UN-administered scheme from 1996 to 2003 that allowed Iraq to sell its oil, despite international sanctions, if it used the revenues to buy humanitarian goods for its people.