Australia's ambassador to the US, Dennis Richardson, met with US Senator Norm Coleman in Washington DC overnight to smooth out US concerns over the AWB controversy.
The meeting was called after Senator Coleman said last week he was "deeply troubled" by the representations made to him by the then Australian ambassador in Washington DC, Michael Thawley, at an October 2004 meeting.
At that meeting Mr Coleman said Mr Thawley "unequivocally dismissed" claims Australian wheat exporter, AWB, was making illicit payments to Saddam Hussein's regime in Iraq.
Evidence has since emerged the AWB paid $300 million in kickbacks to Saddam's government, which has raised questions about whether the Australian government knew about the bribes.
Senator Coleman said on Tuesday he accepted Australia's assurances that there was no intention to mislead, and believed the Cole commission inquiry investigating the matter would be thorough.
"I believe that the Cole inquiry will sort all this out. Everything that I have and seen tells me that the inquiry is a very substantive one, is an independent one and will sort that out," Mr Coleman told ABC radio.
Mr Richardson said he defended Mr Thawley in his meeting with the US senator, describing the former ambassador as "honourable".
"I said I could assure him that the representations made by
ambassador Thawley were in good faith; that the AWB was considered by the Australian government and by others to be an organisation of integrity and repute and that if I had of been in Ambassador Thawley's position I believe I would have felt confident in providing the same assurances in terms of information available to the Australian government at that time," Mr Richardson said.
The meeting appeared to have eased tensions between the Australian government and Senator Coleman, a Republican from Minnesota who is also the head of a US Senate inquiry into illegal payments made to the former regime in Iraq.
Alia claim dismissed
Australian Foreign Minister Alexander Downer on Tuesday denied misleading parliament over when the government first knew about wheat exporter AWB's kickbacks to Iraq.
Charles Stott, AWB's rural services chief, on Tuesday told the Cole Commission investigating the affair that the Department of Foreign Affairs and Trade (DFAT) knew in late 2000 that the wheat exporter was paying "trucking fees" as part of its Iraq deals.
The links between AWB and Jordanian trucking company Alia first became public after the release of a report by UN chief investigator Paul Volcker in October 2005.
The government maintains its first knowledge of AWB's payments to Alia was from the report of a UN investigation into the affair in October 2005.
On October 31, 2005, Mr Downer said: "As far as the government is aware, the first knowledge of Alia and concerns relating to AWB's use of the company, was in the context of the Volcker inquiry."
Mr Downer late on Tuesday denied suggestions his October comment was misleading.
"I did not mislead the parliament, that (statement) is absolutely true," he told ABC TV.
Asked if the government had never heard of Alia before the Volcker inquiry, Mr Downer said: "That's right."
"When I talk about the government too ... I don't just mean the prime minister, the trade minister and myself as the ministers but also the Department of Foreign Affairs and Trade - officials within the department - that's the advice they've given me.
"Nothing that has happened in the subsequent period (since October) has led us, has led the department to revise that advice."
DFAT also released a statement rejecting Mr Stott's claims.
Mr Downer said all the department had been asked in the past was whether it would fit with the UN sanctions for AWB to use a Jordanian trucking company.
"The department's advice was that a Jordanian trucking company would be consistent with the UN sanctions but there was no mention of Alia," he said.
Mr Stott's statement to the Cole inquiry relates to correspondence between AWB and DFAT in October and November 2000 in which the department granted Mr Stott's request to approach "Jordan-based trucking companies" to speed up the delivery of AWB's wheat in Iraq.
Alia, a company in which the Iraqi government retains a 49 percent stake, was used by AWB to pay close to $300 million in kickbacks disguised as "trucking fees" that were demanded by Saddam's government under the UN's oil-for-food program.
In a statement to the inquiry Mr Stott said that during a conversation with a former DFAT officer five years ago, the officer said the department had already looked into Alia.
"The department through all of its examination of these issues has not a scintilla of evidence to support the proposition that Mr Stott at any time mentioned Alia and certainly that the department at no time conducted due diligence," he said.
Deputy PM mentioned
An email tendered to the inquiry recorded a meeting between Australia’s Deputy Prime Minister Mark Vaile and two executives linked to the kickbacks on September 14, 2000 to discuss the recovery of an illicit debt in Iraq.
Mr Vaile has denied that he attended the meeting.
"I have never met with BHP, Tigris Petroleum or AWB to discuss
the Tigris deal. Until the establishment of the Cole inquiry I had no knowledge of this issue,” he said.