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Speaker 1: Welcome to Fearing Greed Sunday feature. I'm Sean Aylmer. Almost

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Speaker 1: twenty years ago Australian Wheat Board Limited hit the headlines

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Speaker 1: over a three hundred million dollar kickback scandal involving wheat

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Speaker 1: weapons and Iraqi dictated Saddam Hussein. Journalist Richard Baker spoke

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Speaker 1: to me about his podcast Bag Dag Nights, which explores

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Speaker 1: exactly what happened in Australia's biggest ever corruption scandal. We

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Speaker 1: spoke twelve months ago and it's as relevant as ever,

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Speaker 1: particularly in these difficult geopolitical times. I hope you enjoy it.

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Speaker 1: Welcome to the Fearing Greed business Interview. I'm sure, Alma,

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Speaker 1: many listeners would remember the Australian Wheat Board affair which

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Speaker 1: came to light almost twenty years ago. After all, it

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Speaker 1: was Australia's biggest ever corruption scandal, where wheat exporter AWB

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Speaker 1: Limited paid three hundred million dollars in kickbacks to Saddam

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Speaker 1: Hussein's regime in Iraq. It made international headline and forever

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Speaker 1: changed Australia's monopoly wheat exports system, and at its center

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Speaker 1: was a small group of wheat sales executives who became

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Speaker 1: the face of this massive corruption scandal. Now a new

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Speaker 1: podcast explores exactly how it unfolded by talking to the

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Speaker 1: executives who found themselves in the eye of the storm.

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Speaker 1: It's called Bag Dad Knights and it's the third season

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Speaker 1: of the Secrets We Keep podcasts. The host is journalist

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Speaker 1: Richard Baker, who covered the story twenty years ago and

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Speaker 1: is now seeing a different side of it all together. Richard,

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Speaker 1: Welcome to Fear and Greed.

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Speaker 2: Thanks very much, Sean, great to be with you.

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Speaker 1: I remember when this story was done. You worked for

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Speaker 1: a long time on it. Is it one of the

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Speaker 1: highlights of your journalism career?

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Speaker 2: Yeah, I think that's certainly one of the most interesting

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Speaker 2: stories I've worked on, just because there are a million

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Speaker 2: rabbit holes you could go down, and it's got a

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Speaker 2: bit of everything. It's got obviously the trade and business

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Speaker 2: dynamic between Australia and a and the United Nations overlay

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Speaker 2: through this World for Food program, but also then the

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Speaker 2: wildcard of the United States in there, who were our

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Speaker 2: battlefield ally in Saddamu Sains Iraq, but our bitter trade

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Speaker 2: enemy when it came to selling wheat to that same market.

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Speaker 2: So it's just got all these angles and personalities and

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Speaker 2: then and then it blew up into this massive media

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Speaker 2: and political storm in Australia that kind of gave rise

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Speaker 2: to Kevin Rudd. It was the you know, the platform

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Speaker 2: that he surfed to prominence on. So yeah, definitely one

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Speaker 2: of the best stories I've worked on.

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Speaker 1: So that's not familiar with the story, just run us

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Speaker 1: through the thumbnail sketch of what happened and how the

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Speaker 1: kickbacks worked.

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Speaker 2: So in the in the late nineties, the Australian Wheat

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Speaker 2: Board was still a government owned corporation and it was

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Speaker 2: the only way Australian wheat farmers could sell and market

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Speaker 2: their wheat overseas. It'd had the monopoly on Australian weed exports,

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Speaker 2: and Iraq was increasingly one of its strongest markets. And

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Speaker 2: Iraq couldn't grow enough wheat, and its economy was being

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Speaker 2: crushed by economic sanctions designed to rein in sad Amhusan's

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Speaker 2: sort of warmongering tendencies. And we found ourselves, AWB found

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Speaker 2: themselves in an increasingly good market whereby Iraq was paying

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Speaker 2: great prices for Aussie wheat, buying millions of tons. It

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Speaker 2: was generating a lot of wealth in rural Australia and

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Speaker 2: keeping the National Party happy, which they were a junior

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Speaker 2: member of John Howard's coalition government back then. And it

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Speaker 2: was all done under the auspice of the United Nations

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Speaker 2: which had set up this thing called the Oil for

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Speaker 2: Food program. And basically what that was was a way

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Speaker 2: for a RAQ to sell its oil on the world market,

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Speaker 2: but the money would be stored in an account is

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Speaker 2: seen by the UN, so Saddam couldn't buy plutonium or

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Speaker 2: weapons of mass destruction and they could then order food

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Speaker 2: and medicine through that and AWB became the biggest supplier

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Speaker 2: of humanitarian goods through that program over four years between

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Speaker 2: nine ninety nine and two thousand and three billions of dollars. Now,

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Speaker 2: the catch was that Saddam Hussein's regime had the wheat

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Speaker 2: board over a bit of a barrel when Australia was

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Speaker 2: joining with the United States and the UK in making

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Speaker 2: aldamatums on him to give up his weapons of mass

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Speaker 2: destruction and then ultimately leading to the two thousand and

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Speaker 2: three invasion. And what happened was he basically said to AWB,

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Speaker 2: you want to keep selling to me I'm going to

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Speaker 2: get a bit more money out of this. I'm going

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Speaker 2: to whack on fifteen to twenty percent to these wheak contracts,

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Speaker 2: say that they're trucking fees or transport costs, and I'm

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Speaker 2: going to pocket about three hundred million out of this

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Speaker 2: that I shouldn't have.

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Speaker 1: Stay with me, Richard will be back in a minute.

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Speaker 1: I'm speaking to Richard Baker, journalist and host of the

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Speaker 1: podcast bag Dad Knights. There were some pretty I mean

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Speaker 1: we talked about the political ramifications, but just the individuals involved.

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Speaker 1: There were some pretty colorful characters, including one who a

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Speaker 1: fantastic photo which I still remember so well, a big

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Speaker 1: man with a bit of a beer gut and a gun,

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Speaker 1: no shirt on. Tell me about those guys.

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Speaker 2: So that's Trevor Flugi you're referring to there, who was

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Speaker 2: the man at the Australian Wheat Board while all this

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Speaker 2: was happening. He was the chairman of the board and

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Speaker 2: very hands on chairman, so often flying around the world,

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Speaker 2: including into Iraq to deal directly with ministers and officials

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Speaker 2: to sell heaps of ossie wheat. And that photo of

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Speaker 2: Trevor actually got that as a young reporter at the

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Speaker 2: age when this scandal was red hot in about two

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Speaker 2: thousand and six, and it's the only time I've ever

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Speaker 2: paid for I guess a story or in this case

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Speaker 2: a photo in twenty five years in journalism, and a

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Speaker 2: young woman came in and basically handed me at disc

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Speaker 2: and said, I think there's some things on here you'll

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Speaker 2: be interested in. Oh wow, And I took them upstairs

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Speaker 2: and I saw that photo with the gun and the

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Speaker 2: shirt off and the sweet face, and I thought, yeah,

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Speaker 2: I got to have this, and it went down and

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Speaker 2: soon I can get you about eight hundred bucks. Take it.

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Speaker 2: Let's do a deal. So yeah, even in a story

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Speaker 2: about bagman and middleman, I was kind of acting like

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Speaker 2: one and we put it on the front page and

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Speaker 2: it went off because it kind of it helped us

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Speaker 2: steal what we thought the story was at the time,

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Speaker 2: that these guys were just cavalier cowboys who do anything

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Speaker 2: for a deal.

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Speaker 1: Did you get to speak to any of these guys

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Speaker 1: for your podcast?

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Speaker 2: I did, so. Yeah. Trevor Flugi is pretty much the

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Speaker 2: main character in the podcast and why he's of interest.

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Speaker 2: He was chairman right throughout this period of time when

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Speaker 2: these controversial deals were done. But that photo was taken

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Speaker 2: when he was actually in Iraq as one of the

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Speaker 2: most senior Australian government representatives in the American led authority

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Speaker 2: that was governing Iraq after Saddamasin had been gotten rid of.

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Speaker 2: So Trevor was there on a one million dollar taxpayer

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Speaker 2: funded contract representing the Australian government, and so he was

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Speaker 2: incredibly politically connected as well, and the organization was, which

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Speaker 2: is why I think it's interesting because I've always found

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Speaker 2: it hard to believe that the government would have so

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Speaker 2: much care to use its kind of leverage with the

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Speaker 2: Americans to embed Trevor and two other of my main

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Speaker 2: characters in the podcast, Michael Long who was one of

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Speaker 2: AWB's gun salesmen, and Daryl Hockey, who was there like

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Speaker 2: political advisor. They were also sent into a rack in

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Speaker 2: senior officials by the government, and so if the government

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Speaker 2: cared that much about maintaining AWB's presence over there, I

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Speaker 2: find it hard to then understand how didn't know kind

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Speaker 2: of how it was doing its business.

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Speaker 1: Yeah, it's pretty incredible. You talk about the political imifications,

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Speaker 1: and Kevin O seven just explain that.

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Speaker 2: So this scandal broke really hard in late two thousand

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Speaker 2: and five, when the United Nations had done a very

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Speaker 2: extensive investigation into the corruption of its oil for food program.

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Speaker 2: It was being rauded left, right and center, well not

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Speaker 2: just by AWB, and when that report finally came out,

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Speaker 2: it was pretty big news and there was a lot

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Speaker 2: of pressure from overseas but also at home for John Howard,

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Speaker 2: who was the Prime Minister at the time, to get

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Speaker 2: to the bottom of it. Now, Kevin Rudd was Labor,

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Speaker 2: the Labor Oppositions Foreign Affairs spokesman at the time. He

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Speaker 2: didn't have a massive public profile. I think he just

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Speaker 2: started doing that Brecky shift on Sunrise with Joe Hockey. Yeah,

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Speaker 2: so this was like right up his alley, and he

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Speaker 2: was really clever at distilling the complexity, and he came

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Speaker 2: up with phrases like the wheat for weapons scandal and

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Speaker 2: basically was saying that the Howard government had gone into

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Speaker 2: this really controversial war in Iraq in two thousand and three,

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Speaker 2: which by two thousand and five was already turning out

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Speaker 2: to be a pretty bad thing, but we were secretly

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Speaker 2: paying the guy where we're going to war against three

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Speaker 2: hundred million bucks. He shouldn't have had and he was

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Speaker 2: just in the media day in day out hammering it,

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Speaker 2: and it really allowed him to raise his profile to

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Speaker 2: the extent that he could challenge Kim Beasley, who was

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Speaker 2: the opposition leader then, and then of course defeat Howard

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Speaker 2: at the next election.

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Speaker 1: Richard Baker, you've been doing You've been journalists for a

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Speaker 1: long time. Did you learn much during the podcast that

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Speaker 1: you didn't actually know before?

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Speaker 2: Yeah? I did, shown in all sorts of different ways.

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Speaker 2: So one of the things I didn't know to the

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Speaker 2: full extent that I do now having done this, was

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Speaker 2: that the process of how AWB got Trevor and the

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Speaker 2: other two blokes embedded into Iraq in two thousand and three,

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Speaker 2: that that kind of that was AWB's own idea. It

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Speaker 2: wasn't the government's idea. But they were able to get

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Speaker 2: meetings with John Howard and the Foreign Affairs Minister Alexander

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Speaker 2: Downer sort of in mid two thousand and two to say,

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Speaker 2: you know, we need to have these roles because we

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Speaker 2: need to be in a position to know what the

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Speaker 2: Americans are kind to try and do once they take control,

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Speaker 2: and be in a position to try and stop that. Now,

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Speaker 2: what's interesting about that is of course, the Australian public

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Speaker 2: hadn't been told that we were going to go to war,

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Speaker 2: because John Howard said he hadn't made his mind up

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Speaker 2: and only made his mind up weeks before we joined

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Speaker 2: the invasion in March two thousand and three. So that

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Speaker 2: intimacy between the wheat Board and the government, it doesn't

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Speaker 2: surprise me. But I didn't know that. Yeah, so I

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Speaker 2: found that really interesting.

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Speaker 1: So Bagdad Knights you can presumably on Spotify, Apple, anywhere

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Speaker 1: you get a decent podcast, is that right, Richard.

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Speaker 2: Yeah, at all the usual podcast outlets.

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Speaker 1: Fantastic. Thank you very much for talking to Fear and Greed.

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Speaker 2: Thank you, Sean.

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Speaker 1: That was Richard Baker, journalist and host of the podcast

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Speaker 1: bag Dad Knights. This is the Fear and Greed Business Interview.

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Speaker 1: Join us every morning for the full episode of Fear

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Speaker 1: and Greed daily business years for people who make their

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Speaker 1: own decisions. I'm Sean Elmer. Enjoy your day.