Australian Prime Minister John Howard has denied claims that letters he wrote to Australian Wheat Board (AWB) in 2002 demonstrate that his government was aware of alleged sweetener payments made by AWB to the regime of Saddam Hussein.

The inquiry into whether AWB contravened Australian law by paying the Iraqi regime hundreds of millions of dollars in kickbacks was sparked by a report on the UN’s oil-for-food program issued in October. In the report, former chairman of the US Federal Reserve Board, Paul Volcker, said AWB paid US$221.7m to Jordan-based Alia Transportation to transport wheat through Iraq but the funds were channelled to Saddam Hussein’s regime. The Australian government has constituted a commission of inquiry, which is holding hearings before issuing a report due on 31 March.

In interviews with Australian media over the weekend, John Howard confirmed that he wrote the letters, but said that apart from urging AWB to do all it could to retain Iraqi wheat contracts he had no knowledge of any illegal payment.

“In 2002 everybody, both sides of politics, and everybody in the wheat industry was concerned that Australia’s wheat sales to Iraq might be reduced, or might be lost and obviously the company which was the monopoly vendor of Australian wheat and still is, wanted the company to work very closely with the Government to make sure that that didn’t happen, and I certainly wrote that letter,” Howard told John Laws od Radio 2UE today (30 January). “We had no knowledge of any corrupt behaviour. Now the question of whether AWB Limited behaved corruptly is something for the commission to decide on, and I’m not going to pre-judge that,” the Prime Minister continued.

The release of the letters has renewed opposition calls that the scope of the inquiry be widened to examine how much the government knew about AWB’s actions.

“I will answer criticisms made of the Government by the Opposition or anybody else. I mean the particular criticism is that these letters which were entirely unexceptionable, normal letters you’d expect a Prime Minister write in the circumstances of that time, in someway implicate the Government in the alleged payment of bribes. Now that is not true and it’s a claim that I reject,” Howard concluded.