Australia Suit Over Wheat For Iraq

SYDNEY, Australia — Six Australian businessmen face the possibility of millions of dollars in fines in a new civil case connected with huge bribes paid to the government of Saddam Hussein.

The men could also face criminal proceedings, but because the statute of limitations expires earlier for civil suits than for criminal cases, the authorities moved first on the civil action.

The six men are all former senior managers of the Australian Wheat Board, which an independent inquiry last year found had paid some $250 million in bribes to the Iraqi government just as Australian troops were preparing to go to war.

The bribes, which the board paid to secure contracts to supply wheat under the United Nations oil-for-food program, were disguised as transport fees paid to a Jordanian trucking company partly owned by Mr. Hussein’s Ministry of Transport, the inquiry reported.

“The Australian Securities and Investments Commission alleges that the defendants contravened Section 180 of the Corporations Act, which requires company officers to act with care and diligence, and Section 181, which requires company officers to discharge their duties in good faith and for a proper purpose,” the commission said Wednesday.

The men, including a former board chairman, Trevor Flugge, face 7 to 17 counts, with each count carrying a potential fine of about $170,000.

The bribery scandal first came to light in 2005, when a United Nations investigation into the oil-for-food program uncovered evidence that the wheat board might have broken the law.

Until this year, the board had a government-sanctioned monopoly on the export of wheat, and when the news of the scandal broke, it caused a sensation in Australia. John Howard, then the prime minister, set up a royal commission under a retired appellate judge, Terence Cole, to investigate the allegations.

The judge’s report heavily criticized the board, saying as many as 11 former officers could face charges. It left unresolved questions about the role of the government.

The contracts in question were cleared by the Department of Foreign Affairs and Trade before being passed on to the United Nations.

The inquiry heard evidence that the government first heard rumors of the bribes as early as 2003, but when Judge Cole called on the foreign minister at that time, Alexander Downer, to testify, he said he had heard nothing.

The opposition Labor Party pursued the government relentlessly over the scandal, led by its spokesman on foreign affairs, Kevin Rudd. He was elevated to the leadership of the party late last year, and last month he led his party to a landslide election victory to become Australia’s 26th prime minister.

The wheat board said Thursday that it would be inappropriate to comment on the new cases against its former employees.

The board is also facing at least four class-action suits.

American grain farmers filed a $1 billion lawsuit last year. Under provisions of the Racketeer Influenced and Corrupt Organizations Act, they accused the board of using illegal methods to shut North American wheat growers out of lucrative markets in the Middle East and Asia.

Iraqi citizens have filed two suits against the board’s American subsidiary, accusing it of giving substantial assistance to Mr. Hussein’s government.

A number of the board’s Australian shareholders have also filed suit.

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