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Speaker 1: Welcome to the Fear and Greed Business Interview. I'm sure

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Speaker 1: Ailma many listeners would remember the Australian wheat board affair,

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

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

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

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Speaker 1: Saddam Hussein's regime in Iraq. It made international headlines and

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Speaker 1: forever changed Australia's monopoly wheat export system, and at its

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

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

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

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

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Speaker 1: It's called bag Dad Nights and it's the third season

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Speaker 1: of the Secrets We Keep podcast. 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 it'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 Iraq 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 it blew up into this massive media and political

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Speaker 2: storm in Australia that kind of gave rise to Kevin Rudd.

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Speaker 2: It was the platform that he he surfed to prominence on.

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Speaker 2: So yeah, definitely one 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 late nineties, the Australian Wheat Board was

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Speaker 2: still a government owned corporation and it was the only

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Speaker 2: way Australian wheat farmers could sell and market their wheat overseas.

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Speaker 2: It had the monopoly on Australian wheat exports, and Iraq

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Speaker 2: was increasingly one of its strongest markets. And Iraq couldn't

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Speaker 2: grow enough wheat, and its economy was being crushed by

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Speaker 2: economic sanctions designed to rain in sad Amhussan's sort of

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Speaker 2: warmongering tendencies. And we found ourselves, AWB found themselves in

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Speaker 2: an increasingly good market whereby Iraq was paying great prices

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Speaker 2: for Aussie wheat, buying millions of tons. It was generating

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Speaker 2: a lot of wealth in rural Australia and keeping the

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Speaker 2: National Party happy, which they were a junior member of

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Speaker 2: John Howard's coalition government back then. And it was all

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Speaker 2: done under the auspice of the United Nations, which had

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Speaker 2: set up this thing called the Oil for Food Program,

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Speaker 2: And basically what that was was a way for a

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Speaker 2: Raq to sell its oil on the world market, but

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Speaker 2: the money would be stored in an account overseen by

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Speaker 2: the UN, so Saddam couldn't buy plutonium or weapons of

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Speaker 2: mass destruction, and they could then order food and medicine

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Speaker 2: through that, and AWB became the biggest supplier of humanitarian

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Speaker 2: goods through that program over four years between nine nine

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Speaker 2: 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: older main items on him to give up his weapons

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Speaker 2: of mass destruction and then ultimately leading to the two

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Speaker 2: thousand and three invasion. And what happened was he basically

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Speaker 2: said to AWB you want to keep selling to me,

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

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Speaker 2: I'm going to whack on fifteen to twenty percent to

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Speaker 2: these week contracts, say that they're trucking fees or transport costs,

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Speaker 2: and I'm going to pocket about three hundred million out

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Speaker 2: of this 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 gup and a gun,

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Speaker 1: no shirt. Took 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 Ozzie 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.

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Speaker 1: Oh wow.

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Speaker 2: And I took him upstairs and I saw that photo

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Speaker 2: with the gun and the shirt off and the sweet face,

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Speaker 2: and I thought, yeah, I got to have this, and

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Speaker 2: it went down and soon I can get you about

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Speaker 2: eight hundred bucks take it. That's do a deal. So yeah,

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Speaker 2: even in a story about bagman and middleman. I was

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Speaker 2: kind of acting like one, and we put it on

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Speaker 2: the front page and it went off because it kind

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Speaker 2: of it helped us steal what we thought the story

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Speaker 2: was at the time, that these guys were just cavalier

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Speaker 2: cowboys who do anything 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. Obviously,

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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 Iraq in senior

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Speaker 2: officials by the government, And so if the government cared

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

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

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Speaker 2: how it was doing its business.

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Speaker 1: Yeah, I mean it's pretty incredible. You talk about the

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Speaker 1: political imifications, 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 opposition's 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 right up his alley, and he was

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

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

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

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Speaker 2: really controversial war in a 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, and then of course defeat Howard at

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Speaker 2: the next federal 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 a RAQ in two thousand

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Speaker 2: and three that that kind of that was AWB's own idea,

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

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

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Speaker 2: Alexander Downer sort of in mid two thousand and two

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

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Speaker 2: because we need to be in a position to know

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Speaker 2: what the Americans are kind to try and do once

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Speaker 2: they take control, and be in a position to try

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Speaker 2: and stop that. Now, what's interesting about that is, of

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Speaker 2: course the Australian public hadn't been told that we were

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Speaker 2: going to go to war, because John Howard said he

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Speaker 2: hadn't made his mind up and only made his mind

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Speaker 2: up weeks before we joined the invasion in March two

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Speaker 2: thousand and three. So that intimacy between the Wheatboard and

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Speaker 2: the government, it doesn't surprise me. But I didn't know that,

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Speaker 2: so I found that really interesting.

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Speaker 1: So Bag Dag Nights you can presumably on Spotify, Apple,

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Speaker 1: anywhere 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: As Richard Baker, journalist and host of the podcast bag

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Speaker 1: Dad Nights. 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.