Howard demands 'bribes' apology

John Howard said there was no evidence to back the charges

Australian Prime Minister John Howard has demanded an apology from a US senator who suggested his government was complicit in alleged bribe taking.

Mr Howard has said there was no truth in claims that his government knew anything of bribes made by a major Australian wheat exporter, AWB Limited.

The firm is alleged to have paid more than $200m to Saddam Hussein's regime under the UN oil-for-food programme.

The allegations have provoked an uproar in Australia.

Over the past week it has emerged that two days before Australian federal elections in 2004, the then Australian ambassador to Washington, Michael Thawley, asked a US committee investigating the oil-for-food programme to drop its inquiry into AWB's Iraqi dealings.

Sen Norm Coleman, who led the US investigation, has said he was assured by Ambassador Thawley at the time that Mr Howard's government was not aware of the alleged bribes.

In letters this week to both Mr Thawley and the current ambassador, Dennis Richardson, Sen Coleman said he was troubled by new evidence that Australian officials were "aware of and complicit in" the alleged payments.

Key letter

Sen Coleman was referring to a letter given to a new Australian inquiry into the alleged scandal, written by Mr Howard in 2002, which recommended AWB keep in "close contact" with the Australian government over its Iraq contract.

AWB is now a private company but was the government wheat board at the time.

Mr Howard sent the letter to AWB managing director Andrew Lindberg following a threat by Iraq to cut in half wheat imports from Australia because of its support for the US.

According to documents seen by the inquiry, AWB deliberately inflated the price of wheat it sold to Iraq.

Mr Howard acknowledged the letter but said officials "were in no way involved with the payment of bribes".

AWB was the largest single supplier of humanitarian goods under the UN-sponsored oil-for-food programme in Iraq between 1996 and 2003, which allowed the Iraqis to sell oil and import food and medicine under sanctions.