IRAQ: BHP's '$US100m Loan' for Saddam

BHP executives planned a $US100 million loan to Saddam Hussein's regime in a bid to curry favour and gain rights to explore a massive Iraqi oil field, the Cole inquiry was told.

The e inquiry into the wheat board scandal yesterday heard that BHP spent more than six months in 1997 preparing an offer for the Iraqi government.

The commission was told last week that BHP paid for a $US5 million wheat shipment to Iraq in 1996 - in part to build influence with Baghdad and give the company the inside running to develop the huge Halfaya oil field if UN sanctions were lifted.

The $US100 million proposal surfaced in a February 1997 email presented to the inquiry yesterday in which BHP executive Peter Worthington outlined the idea to colleague Charles Stott, saying: "Whilst our earlier loan (the $US5 million shipment) will stand us in good stead, we cannot be assured it will underwrite a project capture."

In October 1997 - just a fortnight before the UN Security Council passed a resolution demanding that Iraq co-operate with weapons inspectors - BHP executive Jill Roseman wrote to colleague Tom Harley suggesting that BHP energy chief Phil Aiken be consulted about the plan.

Ms Roseman said more work was needed before the idea could be sent for the approval of chairman John Prescott and the board. "It would need more explanation on the co-operation of the Australian government," she wrote. "In the current circumstances it would be asking a lot of the board to commit to a $US100 million loan."

The email and other BHP evidence s tendered yesterday also referred to the $US5 million shipment of wheat in 1996 as a loan, despite AWB claims it was a humanitarian donation.

Other documents presented to the commission yesterday detailed top-secret projects and the revelation of another "humanitarian" wheat shipment organised by AWB and paid for by Korean car maker Hyundai.

Asked by lead counsel for the inquiry John Agius, SC, if there had been any other AWB shipments - such as the BHP "donation" - paid for by third parties, Mr Stott revealed that Hyundai had financed a similar $US5 million wheat donation to Iraq in April 1995, nine months before the BHP deal. Mr Stott claimed that officials from the Department of Foreign Affairs and Trade consented to the Hyundai arrangement.

But documents tendered to the commission showed DFAT director Malcolm Skelly wrote to Mr Stott in late 1995 and early 1996 discouraging him from a similar arrangement with BHP and warning that the UN would not accept "transactions involving the payment for humanitarian goods by third parties".

The commission also heard of a plan, codenamed project Hunta, for AWB to muscle into the trucking industry in Iraq, shortly after coalition troops bombed Baghdad and spilled across the border in May 2003.

Mr Stott said he did not know the details of project Hunta, despite records from a meeting of the AWB executives that showed he was the project "sponsor".

Pressed further, he said AWB executives had planned to buy trucks to set up a rival freight business to compete with Alia, an Iraqi government-owned company. "The idea of buying trucks and transporting throughout a war zone ... I thought it was bizarre," Mr Stott said.

The inquiry also heard that as the US prepared to invade Iraq, AWB executives lobbied federal politicians and the Australian ambassador to the US to try to protect contracts in Iraq.

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