At the height of its dealings with the government of Suddam Hussein, AWB controlled of more than 80 per cent of Iraq's wheat market. It conducted its business through a United Nations escrow account under the guise of the UN's oil-for-food humanitarian program. But the lucrative deals came undone after coalition forces including Australia invaded Iraq in 2003.
Soon after, the UN launched an inquiry into the oil-for-food program and in 2005 found almost half the companies operating under the program - including AWB - paid kickbacks to secure Iraqi business. In Australia, this prompted the Cole Inquiry, headed by former NSW Supreme Court judge Terence Cole.
The investigation heard that between 1999 and 2004, AWB had systematically funnelled around 300 million dollars in illicit fees to Saddam Hussein's regime to secure lucrative wheat contracts.
The Cole Inquiry found AWB's bribes were transferred to Baghdad through a Jordanian front company, Alia, disguised as trucking fees and were paid out of inflated prices claimed for the wheat from UN-held accounts. It heard these payments and commissions were in contravention of UN Security Council sanctions against Iraq, imposed after its 1991 invasion of Kuwait.
At the time, the Labor Party leapt on the scandal, seeing in it the potential to attack what it saw at least as poor government oversight and accountability, and at worst, possible connivance in pursuing Australian trade advantage at any cost. Labor suggested that because government departments and ministers regulate and supervise wheat exports, the government must have known of the payments before they were revealed by the United Nations.
Others agreed, including a former senior Australian Secret Intelligence Service officer, Warren Reed, who described it as unthinkable that reports about possible bribes were not passed on to ministers.
"This is a major export, wheat, particularly to that country at that time." Mr Reed said in 2006. "This is not just any company operating overseas. And in that total environment, and particularly with oil-for-food under a humanitarian banner, it is inconceivable that a micro-managing prime minister (John Howard) and his other ministers would not be carefully attuned to everything that was happening there."
Terence Cole's report would find possible criminal and corporations law breaches by eleven former AWB executives and one other businessman.
It also found that AWB deceived the UN and the Australian government to protect its lucrative wheat contracts under the oil-for-food program.
But Mr Cole cleared government ministers and public servants of any knowledge of the payments and to this day no one has been held criminally responsible for the scandal.
Then Prime Minister John Howard welcomed what he called Mr Cole's exoneration of his government: "What happened here if you read the report is that from the very beginning according to the commissioner, AWB set out to deliberately mislead and deceive. There was an elaborate pattern of deception," Mr Howard had said.
AWB Chairman Brendan Stewart said the company accepted responsibility:
"The board deeply regrets the damage done to the company. The board accepts accountability for the actions of management, and the culture at AWB during the Oil-for-Food program," Mr Stewart said at the time. "At the end of the day, the board ultimately accepts responsibility for what happened, and is committed to making significant changes to ensure it never happens again."
ASIC won two civil cases in 2013 against former AWB managing director Andrew Lindberg, who paid a penalty of 100-thousand dollars, and former chief financial officer Paul Ingleby, who paid a penalty of 40-thousand dollars.
Former AWB chairman Trevor Flugge and former group general manager trading Peter Anthony Geary are now facing civil trial on charges of dereliction of duty in the kickbacks scandal.
Mr Flugge has denied helping negotiate the kickbacks to the Iraqi government and has welcomed the chance to clear his name.
The corporate regulator Australian Security and Investment Commission (ASIC) began a civil case against Mr Flugge in 2007, but froze the case while it pursued criminal charges.
These were then discontinued in 2010, but now ASIC wants to prove Mr Flugge was aware - or at least should have been aware - that AWB was violating UN Security Council resolutions.
Meanwhile, ASIC alleges Mr Geary personally authorised six payments to Jordanian front company, Alia totalling around 31 million dollars between March 2002 and February 2003.
The civil trial and Mr Flugge and Mr Geary is expected to last 10 weeks.
