Wheat contracts to Iraq were Howard government’s top priority as key role of WA farmer is laid bare

Cabinet documents reveal ministers made protecting Australia’s $500 million in grain exports to Iraq a top priority during the mid-2004 transition from western forces to local authorities after the invasion. They also lay bare the key role of adviser Trevor Flugge — a Katanning farmer who headed the Australian Wheat Board from 1995 until 2002 — who is mentioned multiple times in minutes from cabinet meetings in 2004, released on Wednesday by the National Archives after a 20-year embargo. As the initial military action wound down from the March 2003 invasion, the Australian government’s thoughts turned to how the nation could aid but also benefit from Iraq’s recovery. A cabinet memo from May 7 noted Australians might have “greater difficulty influencing key decision-makers” during the handover from coalition forces to an independent Iraqi government. This meant it was important to keep Australian advisers in the Iraqi agricultural ministry, it said. “Led by Trevor Flugge, Australia’s agricultural advisory team has played a key role in re-establishing agricultural services (in Iraq),” officials wrote. They said elsewhere: “Periodic visits to Iraq by our senior adviser, Trevor Flugge, who finished his formal assignment in Baghdad at the end of 2003, will complement deployment to the CPA (Coalition Provisional Authority) of a further team of technical experts in February.” In May, ministers noted there was an independent study underway into a proposal from Mr Flugge for a government-funded integrated grains processing facility in Iraq. By August, $20 million had been committed to the proposal, although the Iraqis were yet to sign up. As efforts were in place to reduce the number of civilian advisers in Iraq and temper commercial expectations because of the growing security risks, ministers nominated agriculture as “the highest priority”. Mr Flugge was included among a select group of civilian advisers mentioned in a separate cabinet submission from foreign affairs minister Alexander Downer as remaining in Iraq. In 2006, photos emerged of a shirtless Mr Flugge holding a gun during one of his trips to Iraq. Claims had surfaced in 2003 that AWB had been paying kickbacks to Saddam Hussein’s government in contravention of international sanctions and Australian law. This sparked inquiries by UN, US and Iraqi authorities and Australian ministers were concerned the Americans would use the claims to muscle in on their lucrative stranglehold of the Iraqi wheat market. Ministers were keeping a close eye on the investigations, but Mr Downer told cabinet on May 6 that “AWB Limited have assured the Government that it acted with propriety at all times” while dealing with the oil-for-food program. Trade minister Mark Vaile described the investigations as “one issue to watch” in an August submission, noting US wheat producers had already used it “to criticise AWB Limited’s dealings with Iraq under Saddam”. “The Government’s vigorous and sustained lobbying and other efforts have helped AWB Limited maintain its dominant share of the Iraqi wheat market with sales of over AU$500 million since March 2003, but Australia can expect tougher international competition, especially from the United States of America but also Russia, Argentina and others,” he wrote. A royal commission into the scandal subsequently found AWB paid almost $300 million to Saddam’s regime via disguised transportation fees before the invasion. Court cases relating to the corporate regulator’s attempts to have Mr Flugge banned as a director dragged on for a decade. He was eventually found guilty of breaching his duties as a director for not inquiring into the payments after learning of them in 2000, but the judge found ASIC had not made its case that he had acted dishonestly.