The Cole Inquiry - credibility on the line
AWB scandal - - Posted on April, 28 at 6:38 pm by Tim
Okay, so where were we? Vaile testified…Downer testified…Howard testified…don’t remember anything, wasn’t told, the dog ate my homework…
Oh, wait:
The Prime Minister, Foreign Minister Alexander Downer and Trade Minister Mark Vaile have been forced to provide additional statements to the Cole inquiry into the wheat scandal after it unearthed a diplomatic cable dated March 9, 2001.
The recently unearthed document is a loo-loo too-too:
The four-page cable written by Bronte Moules, first secretary at Australia’s UN mission, detailed discussions behind closed doors in the Security Council about Iraq’s exploitation of the UN oil-for-food program. AWB was the biggest single supplier under the program and was to pay almost $300 million in kickbacks to Saddam Hussein’s regime.
Ms Moules reported:
* “The UK said Iraq needed to … stop blackmailing companies by demanding surcharges.”
* “Iraq has, according to UN officials, begun demanding kickbacks and illegal commissions on contracts for humanitarian supplies.”
* Norway said “everybody knows about the kickbacks” but the lack of evidence in contracts seen by UN made it “difficult to address the issue directly”.
Think about that in relation to what we’ve heard so far. Think about it in relation to Bronte Moules testimony. (More on this later.)
But perhaps even more concerning is some other new evidence that showed up at the Inquiry yesterday:
Other evidence to emerge before the inquiry yesterday included an admission from the Australian Transaction Reports and Analysis Centre that it had identified “aberrant” payments by AWB to the Jordanian trucking firm Alia as early as July 2001.
According to the statutory declaration of Johann Visser, the acting deputy director of the centre, no approaches were made to AWB to explain the payments. Nor does it appear that the payments were referred to the Australian Federal Police.
You see, part of the story so far has been that there was no way of knowing that AWB was making irregular payments, that the kickbacks were hidden within the paperwork and without such evidence, the government could make no demands of AWB for a full accounting. Mr Howard said after his testimony:
I mean you had an absence of hard evidence and you had a situation where AWB had a very high standing.
The Australian Transaction Reports and Analysis Centre (Austrac) is a government authority and it is:
…Australia’s anti-money laundering regulator and specialist financial intelligence unit. In our regulatory role, we oversee compliance with the reporting requirements of the Financial Transaction Reports Act 1988 by a wide range of financial services providers, the gambling industry and others.
In our intelligence role, we provide financial transaction reports information to State, Territory and Australian law enforcement and revenue agencies.
So despite constant claims of no “hard evidence” of irregularities in the AWB accounts, Austrac had, in fact, identified just such irregularities. And it did so in 2001.
What hasn’t emerged at this stage is why we are just hearing about this now and whether Austrac had reported any concerns to other government departments. It will be very interesting to see how the Cole Inquiry handles this new information.
Posted in AWB scandal |
April 28th, 2006 at 9:55 pm
So what?
AUSTRAC turns up possibly irregular payments scores of times a day. That is what they DO. If it is not illegal, or does not indicate illegal behaviour as defined by a financial criminal-activities analyst, or is not part of an active investigation into known or suspected illegal activites, then nothing is (or can be) done with the data.
Civil libertarians would have the director of the agency on toast for breaches of the Privacy Act if they did - and rightly so.
Hello mountain, this is molehill.
MarkL
Canberra
April 28th, 2006 at 10:03 pm
So what?
Well nothing, I guess, except for the $300 million in bribes paid to the Saddam regime while we were sending troops to fight him.
April 29th, 2006 at 8:00 am
MEMORANDUM
FROM: Aussie Bob
TO: All Department Heads
SUBJECT: Un-Read Cables
SUMMARY: THE GAME IS UP FELLAS
MESSAGE FOLLOWS: In order to reverse the disturbing practice of Ministers not reading cables addressed directly to them, henceforth all such communications will be cc’d to Mum Kovco (Briagolong, Vic.) for her assessment.
It shall be Mrs. Kovco’s responsibility to assess the importance of each cable and upon her determination that the cable is sufficiently weighty to bring to the said Minister’s attention, she shall thereupon ring said Minister at any time of the day or night and give him a “good old fashioned Aussie earful” regarding the import of the cable.
There shall be no excuse for the Minister not reading his cables.
Specifically:
* Being in his jarmies reading a bed-time story;
* Attending the opening of an envelope in a marginal electorate;
* Being a trusting old mate of the subject of the cable;
* Doing the Herald Cryptic Crossword on a secret DFAT flight to Baghdad;
* Personally escorting the bodies of dead Australian soldiers home to their loved ones;
* Not wishing to be told bad news;
shall NOT be an excuse for refusing a call from Mum Kovco. This decision is final.
SIGNED:
per
Aussie Bob,
Dept. Of Surfdom,
Deakin,
CANBERRA.
April 29th, 2006 at 12:29 pm
If it is not illegal, or does not indicate illegal behaviour as defined by a financial criminal-activities analyst, etc etc
I must have missed something. I thought the Cole Commission was set up because it was illegal to pay $300 million in bribes to Saddam.
April 29th, 2006 at 1:09 pm
That’s a fine straw you’re clutching MarkL. So very fine it’s almost not there. Your gene for objectivity appears recessive, at least in the face of the dominant one for partisan solidarity.
Good to see you back Mark, we seem to have lost wronwright and several other wingnut eminences.
April 29th, 2006 at 4:23 pm
No, stop being deliberately obtuse, Tim. Your point here is invalid. This argument of yours that AUSTRAC showed a hit on a financial irregularity involving AWB is meaningless without its context: who asked for the AUSTRAC check, or whether it was something located in checking something else. We use AUSTRAC material. You are ascribing a species of ‘gotcha’ value to it that does not exist on the info you have provided.
There will be hundreds of such irregularities in all agencies dealing with large cash flows. Nearly all of them will be minor, irrelevant, or just processing errors.
Hence the ’so what?’ comment. The AUSTRAC hit could range from something petty like a garble in the account number up to proof that the head of AWB authorised a fund transfer from AWB’s account to Saddam’s personal slush fund.
Just saying ‘oh, there was an AUSTRAC hit, that proves X’ is meaningless. It is like saying ‘Tim has seen a car, so therefore he is a car thief’ - the fact is unconnected to the assessment.
You may recall, Tim, that I have already stated an opinion that any criminal activities which AWB may have been involved in should be prosecuted to the full extent of the law.
MarkL
Canberra
April 29th, 2006 at 4:54 pm
So according to this report, “aberrant” payments were identified by Austrac. According to my dictionary, “aberrant” is defined as “Deviating from the proper or expected course or Deviating from what is normal; untrue to type”.
I don’t think that it is unreasonable to expect that if a body that is established to monitor and investigate dodgy financial transactions, and if they discover any “aberrant” payments, that they actually either investigate and determine whether these payments are legit or refer them to an agency who can.
Also on this point, there is an interesting para in the Don’t ask, don’t tell, didn’t know
Volcker’s investigators shocked Canberra with their demands. They wanted full access to people, to documents and even to records of financial transactions held by AUSTRAC, the agency responsible for tracking suspicious currency movements in and out of Australia.
Downer and his department baulked. After considering the request for a little more than a week, the minister decided he would severely limit Volcker investigators. They would not be allowed to interview his officers, they could only put questions in writing and they would get no access to classified cables or to AUSTRAC.
April 29th, 2006 at 4:59 pm
sorry - still trying to work out links
the “Don’t ask, don’t tell, didn’t know” article was in the AGE at
April 29th, 2006 at 6:29 pm
This argument of yours that AUSTRAC showed a hit on a financial irregularity involving AWB is meaningless without its context
The context is pretty obvious, as Peter G suggests, though maybe the details aren’t. The broader context is blindlingly obvious: AWB paid $300 mil in kickbacks to the regime of Saddam Hussein. Pity Austrac didn’t follow up on their finding of abberant payments to Alia. Whether they reported it to anyone isn’t clear either, but it’d be good to know, don’t you think.
April 29th, 2006 at 10:00 pm
Tim, sorry, no, that is just not how AUSTRAC works. Under Australian law, a broad ‘fishing expedition’ such as being decribed would require a formal request to AUSTRAC from a government authority able to make such a request (there are several). That request would have to be based on evidence sufficient to meet the regulations and for the request to stand up in a court and be approved (I believe the financial irregularity regulations which are themselves based on a superior Act, but I can’t remember which one, are the appropriate authority - I am not a financial crime analyst). It would not be legal otherwise. I am not at all surprised that the Government balked, a request of that magnitude would require the approval of AGs - and probably the AG himself. Based on my limited knowledge of Commonwealth financial investigation powers I can’t see how it could be legal to accede to a request of that nature.
AG would take the advice of his legal staff on that matter. The UN can ask for the moon (and appear to have done so here), but that is not necessarily legal under Australian law.
The broader context is just that, too broad to be useful in relating to what records AUSTRAC uncovered and under what authority they did so. If a dodgy financial transaction was uncovered, it may not have been legally useable, and it may not necessarily be sufficient to trigger a wider request. THAT is the context we need to know. And we don’t.
Rest assured that AG’s lawyers would go over that little puppy with a fine tooth comb!
Under the Privacy Act (something I am a bloody strong supporter of thank you very much) nebulous but broad-based fishing expeditions in the financial records of persons, authorities and companies is illegal, repeat ILLEGAL. I sure as hell do not want any government agency able to conduct such activities on a whim - and NEITHER DO YOU or anyone else. I am also sure that they are illegal under the various finance acts and finance regulations.
So we get back to the ’so what?’ AUSTRAC said they had something. We do not know what it was, when it was, how much it was for, if it was a technical issue or a more serious one, under what authority it was found, or if further use was even legal.
Therefore, you are still trying to make soup from damned thin stock.
Try to understand - an unknown AUSTRAC hit means nothing by itself. Visser may be supporting this - if AUSTRAC did not inform AFP or AWB, they may well NOT HAVE BEEN LEGALLY ABLE TO DO SO. But we do not know, do we? So using that as ‘proof’ of anyones complicity in a criminal act is a big no-no.
MarkL
Canberra
April 30th, 2006 at 10:55 am
The report that was quoted did not say that an agency requested AUSTRAC to do anything, but rather that it was AUSTRAC itself that “ had identified “aberrant” payments by AWB to the Jordanian trucking firm Alia as early as July 2001.
So it seems that there is no “fishing expedition” by other agencies. Now if AUSTRAC discovers an “aberrant” payment, it would be nice to know what they can then do to discover whether the payment is, in fact, legit or not.(it has to be done legally of course, and in compliance with privacy laws).
According to AUSTRAC’s web-site (@ http://www.austrac.gov.au/about/index.htm)
Under the FTR Act, we collect, retain, compile, analyse and disseminate the information we collect, called FTR Information.
AUSTRAC provides the ATO and specified law enforcement, security and revenue agencies with both general and specific access to the FTR information we collect. The general access, governed by memoranda of understanding, is by way of controlled on-line access to the data and, where appropriate, by extracts of parts of the data holdings. This allows our partner agencies to add the financial intelligence we hold on particular matters to their intelligence pictures, so giving them a better understanding of the activities being examined.
So it still seems that AUSTRAC identified “aberrant” payments by AWB, but nothing further happened, either internally or by another agency.
April 30th, 2006 at 11:27 am
Peter, you posted this, and I read this as a request from a foreign entity for Australian financial data (in spades and with bells on):
‘Volcker’s investigators shocked Canberra with their demands. They wanted full access to people, to documents and even to records of financial transactions held by AUSTRAC, the agency responsible for tracking suspicious currency movements in and out of Australia.’
Such data cannot be provided without breaching the Privacy Act AFAIK. Certainly the ‘full access to people’ for a legal proceeding would require authorisation. I know that if I was asked to attend such an inquiry and provide this sort of information, I’d say ‘no way’ without a warrant, summons or subpeona, and I’d have a lawyer with me. I suspect that Tim and yourself would take the same line.
You’ve picqued my interest on this one. I’ll have to talk to my friendly local financial crime analyst tomorrow and see what is said.
I think that you are under the misapprehension that AUSTRAC is an analytical agency. In the criminal sense it is not (although it does have financial analytical duties). It is a data collection agency. Separating those two functions is essential, lest you wind up with one agency being investigator and adjudicator combined. That is NEVER a good thing (unless one is a Sharia court Mullah).
MarkL
Canberra
April 30th, 2006 at 12:00 pm
MarkL, you wrote Peter, you posted this, and I read this as a request from a foreign entity for Australian financial data (in spades and with bells on)” You go on to say “Such data cannot be provided without breaching the Privacy Act AFAIK. Certainly the ‘full access to people’ for a legal proceeding would require authorisation”.
While I understand the need to comply with various legislation, I fail to see that a request from an international body is a problem if AUSTRAC’s legislation allows for it.
Under its web-site (@http://www.austrac.gov.au/aml/austrac_backgrounder.html) , it states in part: AUSTRAC collects financial transaction reports information from a range of cash dealers including the financial services and gaming sectors, as well as solicitors and members of the public. This information is stored, analysed and disseminated as financial intelligence to domestic law enforcement, revenue, national security and social justice agencies, as well as international FIU counterparts to assist them with their investigations and prosecutions of, amongst other things, criminal and terrorist enterprises in Australia and overseas. AUSTRAC works both bilaterally and multilaterally to facilitate the exchange of financial information and to build an international environment hostile to money laundering, major crime, revenue evasion and the financing of terrorism.
. It goes on to say that “The agency’s bilateral relationships include information exchange, underpinned by exchange instruments between AUSTRAC and foreign financial intelligence units”.
As far as I can see, the only question is whether the Volcker inquiry is recognised under AUSTRAC’s legislation as a foreign financial intelligence unit .
April 30th, 2006 at 6:29 pm
Those are bilateral, and each MOU is AFAIK unique to account for the respective national legislation. I have personal knowledge of the existance of some of these MOU, I have not heard of one with the UN. I know of no UN FIU.
As I said, you’ve picqued my interest, and I will contact someone during the week.
MarkL
Canberra
May 8th, 2006 at 1:39 pm
you guys need to get a life LOLOLOLOL