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Diary notes place AWB back in spotlight -

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Diary notes place AWB back in spotlight

Reporter: Nick Grimm

KERRY O'BRIEN: Heather Ewart with that report. After months of, at times, sensational headlines,
the Cole inquiry into illegal kickbacks by Australia's monopoly wheat exporter AWB Limited, has
been experiencing something of a media hiatus pending the outcome of argument in the Federal Court
over whether some AWB documents are admissible. But the spotlight was back on this morning with a
headline in The Australian newspaper: "New Notes Blow Lid Off AWB". It referred to hand-written
diary notes from a senior Foreign Affairs Department official referring to two meetings with senior
public servants back in July, 2004, where an Australian Army colonel just back from Iraq, briefed
them on AWB's involvement in the kickback scandal. The diary notes were actually tendered to the
Cole inquiry last April, but had received scant attention until today. The Labor Opposition has
leapt on the story as conclusive evidence of a Government cover-up. The Government has dismissed
the diary notes as old news that prove nothing. This report from Nick Grimm.

NICK GRIMM: Like the men and women of the Australian defence forces who enforce the trade sanctions
against Saddam Hussein's regime, the Cole inquiry and those following it, have often found
themselves navigating an endless ocean of evidence. While it might seem like the AWB's boatload of
excuses was well and truly sunk a long time ago, every so often another document bubbles back up to
the surface. So it was today when The Australian newspaper seized on one such piece of evidence
which had previously gone almost unnoticed.

JOHN HOWARD, PRIME MINISTER: That is all old news.

ALEXANDER DOWNER, FOREIGN AFFAIRS MINISTER, ON RADIO: It's neither here nor there because I had
been informed in March of 2004 in the context of the establishment of the Volcker Inquiry about the
possibility of AWB being embroiled in the rorting of the Oil-for-Food Program.

DR BEN SAUL, LAW FACULTY, UNSW: These latest revelations are further evidence that the Government
knew in 2004 that AWB was implicated in serious breaches of the international sanctions regime on

NICK GRIMM: Among the thousands of pages of evidence tendered to the inquiry, these hand written
notes had been all but buried among the thousands more pages of media reports on the inquiry. They
were scribbled by one of Foreign Minister Alexander Downer's top bureaucrats, the former head of
the Government's Iraq task force, John Quinn. Their significance have become clearer because they
appear to corroborate evidence from Australian Army officer Colonel Mike Kelly whom the 7:30 Report
revealed back in May had tried to blow the whistle on AWB's kickback. The fact that his warning
seemed to fall on deaf ears had angered many in defence circles.

NEIL JAMES, AUSTRALIA DEFENCE ASSOCIATION: These are ludicrous, absolutely ludicrous excuses for
not listening to people who are well placed to provide tip-offs of something that was not only
illegal but immoral and not in our national interest.

ALLAN BEHM, FORMER SENIOR PUBLIC SERVANT: I do think it's a fundamental failure of the public
service to fulfil its duties.

NICK GRIMM: A military lawyer Mike Kelly was seconded to the Coalition Provisional Authority in
Iraq in 2004. He was appointed by US administrator Paul Bremer to help establish investigations
into the rorting of the United Nations Oil-for-Food Program. Mike Kelly says he repeatedly tried to
warn the Department of Foreign Affairs and Trade that it looked like the jig was up for AWB.

COLONEL MICHAEL KELLY (TRANSCRIPT): All Australian wheat were subject to the same illegal
practices, which involved dealing with a Jordanian trucking company, Alia, and charging 10 per cent
onto the contract - AWB Limited, as the largest supplier of food under the OFFP, was almost
certainly directly and knowingly involved in the making of these payments.

NICK GRIMM: Colonel Kelly has said he first passed on that warning to the deputy head of DFAT's
Australian mission in Iraq, Heidi Venamore, seen here in Baghdad receiving the Public Service Medal
from the Prime Minister. She, however, has denied being told any such thing.

HEIDI VENAMORE, DFAT (TRANSCRIPT): I would have considered any information that an Australian
company had been acting improperly under the OFF program to be substance. Such information was not
provided to me.

NICK GRIMM: But these notes now cast a new light on Heidi Venamore's evidence. Their author, John
Quinn, is seen here at a Senate estimates hearing in 2004 which was inquiring into Australia's
response to allegations of prison abuse at Iraq's notorious Abu Ghraib prison. It's an
extraordinary coincidence, perhaps that the same officer who was ignored when he tried to blow the
whistle on Abu Ghraib was none other than Colonel Mike Kelly. When the officer returned to
Australia, John Quinn debriefed him about the progress of investigations into that other Iraq
scandal, the Oil-for-Food Program. Now, the evidence at the AWB Inquiry can be pretty impenetrable
at the best of times, but fortunately John Quinn has also provided a translation of his scrawled
notes of what the army officer told him.

It begins: JOHN QUINN, DFAT OFFICIAL, NOTES MADE IN 2004: AWB Limited...Problems...Jordan...
Redelivery...Extra charges. Exposure...Service fee across the board...10-30 per cent.

NICK GRIMM: In a subsequent statutory declaration to the inquiry, Mr Quinn acknowledged parts of
Mike Kelly's version of events, but said he could not recall any specific allegations relating to
AWB. But the diary notes also contain this possible reference to Mike Kelly's conversations with
Heidi Venamore back in Baghdad. JOHN QUINN NOTES MADE IN 2004: AWB Limited... Early warning...

NICK GRIMM: In March that year, Heidi Venamore has said she regarded Mike Kelly's opinions about
AWB as not worth reporting. But in July, John Quinn was prompted to arrange for Mike Kelly to
attend a further briefing with DFAT's lawyers, as well as officials from the Prime Minister's and
the Federal Attorney-General's departments. But despite Mike Kelly's warning AWB was suspected of
helping Saddam Hussein rort the Oil-for-Food Program to buy weapons, John Quinn's plans for further
action appear to be reflected in the words: JOHN QUINN, NOTES FROM 2004: Cabinet... too
early...offering co-op...letter Downer to PM...

NICK GRIMM: That letter seemed to be some time getting sent. John Howard has previously said he
only became aware of AWB's culpability in the following year in 2005.

JOHN HOWARD: They don't conclusively prove anything. They represent the record taken of a
conversation between Mr Quinn and Colonel Kelly and they record the views expressed allegedly by
Colonel Kelly to Mr Quinn. He's provided a declaration. He's appended the notes to the declaration.
It really is up to Mr Cole to decide their relevance.

DR BEN SAUL: Well, it seems that Minister Downer seems to be continually denying his responsibility
in all of this. There is serious and credible evidence that he or his officials may have breached
their responsibilities under Australian and international law.

NICK GRIMM: International law expert Dr Ben Saul was the author of a letter signed by 22 top
lawyers and academics calling on the Federal Government to expand Terence Cole's terms of reference
to include the Government itself. Dr Saul believes ministers, their advisers and bureaucrats simply
aren't receiving enough scrutiny.

DR BEN SAUL: Well, we simply don't know because the Cole Commission hasn't called all of the
relevant witnesses. It hasn't called the Department of Foreign Affairs legal advisers to give their
legal advice - it hasn't called Colonel Kelly or John Quinn and questioned them at any length. So
we just don't know how much is still to be exposed in this saga.

JOHN HOWARD: Let us wait. Let Mr Cole, an eminent lawyer of great skill and integrity, let him
reach the conclusion that he will according to the facts and not the breathless commentary of
either side of politics.