Ex-AWB head Flugge finally before court

12 Oct, 2015 04:05 AM
Trevor Flugge. File photo.
The trial promises to engulf former ministers and senior public officials
Trevor Flugge. File photo.

ALMOST two decades after Trevor Flugge visited Saddam Hussein's regime for the first time and the Iraqi kickbacks scandal unfolded, the former chairman of the Australian Wheat Board faces his day in court.

Mr Flugge faces four allegations of breaching his director's duties, while former general manager for trading Peter Geary faces 13 allegations of breaching his executive duties. Each breach carries a maximum fine of $200,000.

Mr Flugge, whose photo was splashed across the front pages of the country's newspapers bare-chested and gun-toting during a tour of Iraq, faces fines of up to $800,000 and being banned as a director.

The 10-week civil trial begins today in the Supreme Court of Victoria before Judge Ross Robson and is being brought by the Australian Securities and Investments Commission against Mr Flugge.

"Flugge headed AWB delegations to Iraq in 1996, 1998, 1999 and 2001," ASIC's third further amended statement of claim, filed for Monday's trial, states.

Despite the extraordinary passage of time, the trial promises to engulf former ministers and senior public officials who are named in court documents and face being called as witnesses to recall the decade-old events, set in the lead-up to the US-led invasion of Iraq in 2003, which ultimately toppled Saddam Hussein and led to his execution in December 2006.

"On 2 April, 1998, Flugge wrote to Tim Fischer, the then deputy prime minister and minister for trade advising of a meeting scheduled with the Iraq minister for trade later that month," the court documents state.

"In response to Australia's decision to place troops in the Gulf region, Iraq intended to cut Australian wheat imports and...be replaced by imports from one of AWB's major competitors, France. Flugge requested that the deputy prime minister provide AWB with a message to pass on to the Iraq minister for trade indicating, among other things, the importance that is attached to the wheat trade between Australia and Iraq," the documents say.

In 2005, the Cole Inquiry, headed by former NSW Supreme Court judge Terence Cole, heard that between 1999 and 2004, the Australian Wheat Board systematically paid more than $US225 million in illicit fees and commissions to Hussein's Iraqi regime, in pursuit of wheat sale contracts, knowingly in contravention of UN sanctions.

ASIC put the civil cases against Mr Flugge and five other former Australian Wheat Board executives on hold in November 2008 to wait for possible criminal charges but in a shock decision in mid-2010, it was revealed the criminal aspects of the investigation had been abandoned.

ASIC re-ignited the civil penalty cases against the six men, which had been initiated in late 2007, over the payment of hundreds of millions of dollars in "transport", "discharge" and "sales service fees" to Jordanian-based trucking company Alia, revealed later to be a front for the Iraqi government.

In a pyrrhic victory, ASIC won two of the civil cases in 2013 against former managing director Andrew Lindberg, who paid a penalty of $100,000, and against former chief financial officer Paul Ingleby, who paid a penalty of $40,000. Cases against former directors Michael Long and Charles Stott were dismissed.

A search of the public records revealed the regulator had spent an estimated $15 million on the AWB prosecutions at that time.

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12/10/2015 9:36:58 AM

I can't believe it has taken this long for this to come to court... unbelievable
12/10/2015 10:53:20 AM

Has Mr Flugge been stripped of his AO or even his Farrer Memorial Medal.
muck jockro
12/10/2015 11:16:36 AM

Where is Jock defending AWB and his long held wish to return to the single desk.
12/10/2015 11:37:13 AM

Do Australians have no idea how business is done in countries such as Iraq? It is extraordinary to think people expect the same standards to apply. In so many countries, if you don't play by their rules you'll get no sale. It is no different realy from the way we accept low standards for imports of agricultural produce from the rest of the world but then we shackle our farmers with impossible standards - and wonder why we can't compete. Stupid, stupid Australia.
12/10/2015 1:13:33 PM

This was not a typical third world regime kickback story. Flugge and AWB were trading when there was a trade embargo agreed upon by the UN Security Council against the Iraq regime. It was strictly enforced and followed by our wheat trade competitors. It wasn't just about kickbacks. This trial will make a lot of retired Coalition politicians very uncomfortable.
John Carpenter
12/10/2015 2:22:15 PM

Australia's equivalent to Donald Rumsfeld.Governments always have to find some one to blame for their own mistakes.
Pain de Campagne
12/10/2015 2:59:08 PM

Why would Trevor be stripped of his awards. He has not been found guilty of anything. He holds his head high and will be vindicated when ASIC's case fails miserably.
12/10/2015 6:29:45 PM

Dont worry Muck, Jock will have his say soon and it will make sense.Lot of information to come out yet. AWB just doing business as it is done in the middle east Real grain growers not victims in this case.
Jock Munro
13/10/2015 4:49:40 AM

AWB Ltd paid Jordanian transport and stevedore company Alia to transport our wheat from Um Qasr Southern Iraq port. Alia also handled corn,beans,rice etc from other interests and obviously global middlemen would have been involved. Fonterra NZ came under pressure through the Volker report but their PM Helen Clark stood up for New Zealand's interests unlike Kevin Rudd and John Howard in Australia.
13/10/2015 10:48:26 AM

Yes Pain de Campagne you are right Mr Flugge has not been found guilty and he does come across as a nice bloke. He is obviously unlike the ones with very bad memories that have fronted up recently to the ICAC here in NSW proudly wearing their Australia Day honours lapel badges.
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