You don’t know what you don’t know

It’s taken a long time, but the report of the Royal Commission has been tabled into the scandal of bribes being paid to Saddam’s Iraqi regime to secure Australian wheat exports. I did a series of posts on this back in February this year. Things appear much the same now as they appeared back then.

It is quite possible that the internal Coalition wrangling over the future of wheat exports, and the financial harm that’s been done to some wheat growers, will cause the government greater pain than the issues of bribes to Saddam, breaching UN sanctions, dishonest or poor public administration and the like.

There will be three main issues flowing out the report:

  • Firstly, the political consequences to the government (and possibly to its opponents for failing to get a ‘scalp’).
  • Secondly, the further investigations and possible charges and trials of various former executives of AWB (which may impact on the political consequences)
  • Thirdly, the future of Australia’s wheat export markets and what happens to the current ‘single-desk’ system, where all exports have to go through a single body and can be vetoed by AWB.

I’ll leave others to argue about the political winners and losers. Leaving aside all of the other factors, the things that distresses me most is what it shows about how badly public administration has deteriorated – a sure sign of a government that’s been in power a long time and believes this is the natural order of things.

One example of this is Alexander Downer once again using the excuse that “you don’t know what you don’t know” as a reason for why action wasn’t taken. This sort of self-evident, closed-loop logic is being used to excuse virtually everything these days – whether it’s the mistakes over weapons of mass destruction or the failure to recognise the civil war which Iraq has descended into.

The real question is what people in such positions should know. The regular practice is to avoid knowing things that might make life more difficult – particularly if it involves one’s mates. Put all the stuff about who’s a liar and who’s corrupt to one side. Heaps of Foreign Affairs staff all around the world sending cables to Canberra about all sorts of matters, yet the Minister doesn’t read them. It’s just really really poor administration. For a variety of reasons, this one came to light in a spectacular way, but it is happening everyday in so many areas. Bad laws, badly administered, with short-term self-interest reigning supreme.

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  1. I doubt that it is ‘poor’ administration, I believe that it is purposeful, deliberate administration.

    Part of any senior public servant’s job nowadays is protecting the Minister from things that s/he would be better off not knowing.

    I expect that Ministers did not in fact know exactly what was going on, but also were quite happy for a ‘whatever it takes’ culture to exist in AWB, and quite happy to not look closely.

    I don’t see how the scandal will shift many votes. Unless surprise evidence takes out a senior minister and thus creates instability, the Government will ride this one out.

  2. It seems to me the obvious response to the ‘you don’t know what you don’t know’ line is – you are the Foreign Minister/Trade Minister/Prime Minister – you get paid considerable amounts of taxpayers money to oversee the administration and governance of this country , why do you think saying you didn’t know is an acceptable excuse or does anything other than demonstrate your incompetence?

    What troubles me though is that faced with yet another piece of undeniable evidence of at the very least, incompetence on the part of senior Government Ministers, the average Australian doesn’t seem to be too concerned. I’m wondering what on earth it will take to wake them up.

  3. Why dont we ask our Senate and Lower House reps what they knew, and when they knew it?

    Im sure that way we could get to the bottom of it; after all, they must know because they are the ultimate authority (arent they?).

    Perhaps they were just happy that Iraqis had bread on the table, and we should leave it at that.

  4. I don’t think the AWB Royal Commission had the power to investigate the Government. So the Government’s argument that they are off the hook because of the findings of the Cole Commission is not a truthful statement. Of course, this Government doesn’t know about truth. It doesn’t know, what it doesn’t want to know.

    The Government should not be let off the hook until they are investigated by a Royal Commission as to their role in the AWB scandal.

    Obviously that would not happen because there is a chance that the Commonwealth Government could be found to have been at some sort of fault for not stopping illegal transactions between the AWB and the Iraqi regime.

    There clearly needs to be an inquiry into the Government’s role and no, the ALP should not apologise for saying that the Government has been negligent until we know the full truth from a broad inquiry into the matter, not just and inquiry into 3 Australian companies implicated in a UN report of the Oil for Food scandal.

    I am also concerned that the Federal Government gagged public servants fromm giving evidence on the matter to Senate Estimates. The Government line was that it might prejudice the Cole Commission. Does that mean that the gag on public servants is now lifted Mr Minchin? Now that the Cole Royal Commission is over. Or are you going to now say that they are still gagged because of upcoming criminal proceedings against AWB executives?

    Either way, it looks like no one but the Government will ever know the truth.

  5. It’s true that the AWB Royal Commission did not have the power to investigate the Government, so you have to wonder why Cole found the government innocent (and if he didn’t actually find that per se, why did the media report it that way?).

    This is Australia’s version of the USA’s 9/11 Commission: a stitchup designed to hide the most embarrassing facts. Ultimately, it is not just costly to taxpayers but also contrary to their best interests.

  6. Good laws are badly administered as well.

    We live in an excuse-making society where people know they can get away with doing nearly anything.

  7. Gadget,
    the point is that almost $300 million from the Oil-For-Food programme that was earmarked for bread for the Iraqis’ tables, was instead diverted into Saddam’s pockets and those of his cronies.

    It’s not just corporate corruption that our government “accidentally overlooked” it was $300 million worth of aid taken from the mouths of starving people.

  8. It’s not just corporate corruption that our government “accidentally overlooked” it was $300 million worth of aid taken from the mouths of starving people.

    No it wasn’t. AWB were selling wheat, not giving it away.

    The bribes paid to the Sadaam regime, while utterly morally corrupt, did not in themselves reduce the amount of wheat that got to ordinary Iraqis.

  9. The Oil for Food programme was set up after the 1991 sanctions were put into place, to allow Iraq to trade oil revenues for food and other essential goods.

    The programme began in response to the growing evidence of suffering by the Iraqi people under the sanctions. Money from oil sales was held essentially in trust and apportioned out to cover ongoing operations in Iraq by the UN and others, war reparations, and for the Iraqi government to buy foodstuffs, medicines and other prescribed goods.

    You’re right that it was not technically aid, but it was emergency relief to starving people, and by giving $300 million of it to Saddam’s regime in bribes, it did reduce the amount of wheat, or other goods, that went to the Iraqi people under the Oil for Food programme.

  10. Actually, giving $300 million in cash to Saddam’s regine increased the amount of food that got to starving people. Without the bribes, the wheat wouldn’t have been sold, and the people wouldn’t have eaten it.

  11. I’m past caring about who are the political winners or losers out of this saga. However, what does really concern me is what is shows about how low our levels of public administration and governance have sunk.

    This finding from the Cole Inquiry (which I read in Crikey) pretty much sums it all up – and it’s not something I find uplifting at all.

    (from Voume 4, para 30.7)

    It is the actual knowledge of the Commonwealth that the information was false or misleading that is material in considering whether a benefit or advantage was conferred by the Commonwealth by reason of the provision of misleading information. It is immaterial that the Commonwealth may have had the means or ability to find out that the information was misleading, or that it ought reasonably to have known that the information was misleading. It is also immaterial that the Commonwealth, at the time it conferred the benefit or advantage, suspected but did not know that the information was misleading. The question is whether the alleged false or misleading statement operated on the mind of the person to whom it was directed — here, the Commonwealth. Accordingly, the question whether the Commonwealth may have had constructive knowledge (in the sense that it ought reasonably to have known the truth or that it had the means and ability to find out the truth) is immaterial. A false statement may still operate on the mind of a person who merely has constructive knowledge so as to result in the person being misled or deceived.

    (my emphasis)

  12. It’s interesting to see that Senator Andrew Bartlett is attempting to undermine the findings of the royal commission, which is quite surprising given that, as the Prime Minister has pointed out, the inquiry was conducted by an individual who is “regarded as a lawyer of great integrity, great repute and great forensic skills and as a completely and fearlessly independent man.”

    Some further excerpts from the findings of the Cole Inquiry that may be of interest to the discussion:

    There is no direct evidence that anyone at AWB ever told anyone at DFAT that AWB’s wheat prices incorporated inland transportation fees or other payments to be made to Iraqi entities.

    No ‘direct evidence’ exists because:

    AWB submitted to DFAT the notification forms and contracts that omitted to disclose the arrangements relating to the payment of inland transportation fees and other payments to Iraqi entities.

    Further more:

    It is unsurprising that the evidence supports a finding that DFAT was not told by AWB or its officers that AWB was paying inland transport fees and after-sales-service fees to Alia for forwarding to Iraq.

    Meanwhile, the Victorian Democrats ‘lead candidate’ for the Legislative Council boasting “the Victorian Democrats have struck a deal which means we will get ALP preferences” was quite surprising.

    Sounds awfully familiar to the preference deal between the Democrats and Labor in the 2001 Federal Election. Except this time the deal unsurprisingly backfired and no Democrat candidates were elected to the state upper house.

  13. what are we a bunch of highly educated dills?
    think about this
    who is profiting most out of all this.
    the americans our so called allies.
    who our elustrious leader followed into this nasty little war because they asked him to.
    so mutch for allies.
    they couldent what for a chance to take our market from us.

  14. That’s some good Coalition style logic, Mr Unity – by directly quoting a finding by the Royal Commissioner, I am “attempting to undermine his findings” !!! It’s hard to argue with logic that twisted.

    Your extra comment is (a) totally off-topic, and (b) trolling, which breaches two rules of this site’s comments policy.

    To correct you:
    There’s no reason why it would be surprising to hear a Victorian Democrat candidate talk about a preference deal with the ALP. It’s called being transparent. Every party did a range of preference deals with a range of other parties -for example, the Liberals did a range of deals with other parties, including both Labor and the Greens in different Houses.

    It is also of course not even remotely close to what occured at the federal election in 2001, as you know because I’ve corrected your misinformation once before. Repeating deliberate falsehoods is trolling.

  15. coalition unity
    it dosent mater what the out come of the cole inquiry is
    the facts are that there are gowing to have to be some fancy footwork buy howard downer and co.
    to convince the ppl that they didnt know what the awb had spent 300mil on.
    and they didnt set up the inquiry to get a specific outcome.

  16. Cole is definitely worth his money!

    What would be wilful negligence from a board of directors is ‘immaterial’ from the Government.

    Do you think he’ll do me some pro-bono work the next time the dole shop tries to have a go?

  17. It might be more accuraet to refer to the lowliness as political administration ratehr than public administration. In my view, being someone who was a part of it at the State level, the practice of bringing in the filtering mechanism of the political advisor, cum second guesser, cum minder – initiated by the great man, consolidated by Hawke and Keating into the public sector itself and perfected by the Howard Governemnt is one of the reasons for this situation.

    There has always been advice (on where the bodies aer buried etc) between senior public officials and Ministers that is kept from the puiblic, the differnce pre spinner was the publci offical and Minister would decide on how to resolve and fix it, it would still be kept quiet – today the spinner keeps the Minister away from it and ignoers it.

  18. This story on the 7.30 Report provided some good insight into some of the wider issues.

    DR A J BROWN, LAW SCHOOL, GRIFFITH UNIVERSITY: The reality is that it is people’s jobs to know, in this case people in the Department of Foreign Affairs and Trade, the people of the wheat export authority, ultimately ministers, not only was it their job to know, but in fact there is plenty of evidence that they did know that all the warning signs were there. So we’ve got a clear situation where accountability obviously failed.

    GREG HOY: Dr A J Brown was a key witness at a recent Senate legal committee inquiry into the need to establish an Australian Commission for Law Enforcement Integrity, or ACLEI, with the power to build corruption resistance in government and government institutions and to identify corruption risks before they take hold. The good news is, the Federal Government agreed to establish the permanent commission. The bad news is, it will be staffed by less than 10 people with power over only a few out of Australia’s dozens of federal agencies and so ignoring recommendations from the likes of Australian Federal Police Commissioner Mick Keelty, who told the Senate committee in April “I for one, to be very honest, would like to see the committee look at that issue. If we are serious about this, and if it is not just a quick fix, then the AFP could benefit in its investigations if the ACLEI had a wider remit than what is proposed.” Commissioner Keelty’s appeal failed.

    FRANK COSTIGAN: Unfortunately, the integrity commission is again itself too narrow to monitor corruption generally.

    A J BROWN: The Australian Government now in a domestic situation, the national government, the Federal Government stands out as being pretty much alone in not having any of those kinds of systems in place.

  19. So we’ve got a clear situation where accountability obviously failed.

    Well, no. We’ve got a clear situation where accountability deliberately wasn’t set up in the first place. You don’t fail if you don’t try.

    I think Ken’s view is more realistic.

    Imagine the uproar inside the Coalition if Australia had lost its wheat contract with Iraq before the 2003 war.

    AWB did exactly what it’s masters meant it to do, both in keeping sales up and protecting Ministers from “officially” knowing what was going on.

  20. Mr Cole made perfectly clear that he would demand the requisite extension of powers to investigate ministers and officials of the Crown if that became necessary. He had all the authority he needed. Suggestions to the contrary derive from those excitable pathologies of contorted logic conventionally associated with conspiracy theories.

  21. C.L., your comment is utterly beside the point. Commissioner Cole in effect said, as Senator Bartlett quoted above, that the Government had no duty whatsoever to find out the truth.

    He decided he had no need to investigate Minsters, even though there is ample evidence to suggest that the Government was informally informed about what was going on.

    Questioning that highly dodgy decision of his does not, as you assert, merely spring from mental pathology. Your irrevant attack suggests that your motive is to protect the Government at all costs.

    Or do you feel that we should accept Cole’s assertion that a Minister has no duty to find out the truth, no matter how suspicious something looks?


    “The Inquiry has been a fix from the word go. First with narrow terms of reference. Second with the choice of commissioner.

    Cole has form as the government’s go-to guy. As head of the building industry royal commission he was hired to stitch-up the CFMEU and uncover a nest of Norm Gallaghers.

    Although he didn’t succeed on the proto-Gallagher front, his inquiry was a farce nonetheless. He consistently rejected evidence that showed massive corruption by employers, and placed anything remotely damaging to the union under klieg lights.

    The script was written well before the first day of hearings, and I suspect Cole had a clear idea of his role.”

    Cole could, as Howard said, ask for extended terms of reference, but he never did or would. That would destroy the carefully constructed veneer of a proper inquiry.

  23. There is another set of consequenses that Crikey just mentioned…apparently US wheat exporters are looking very hard at the Cole Report to see if there is any way that AWB or employees can be charged or sued in the USA.

    Apparently some money passed through US banks which may be enough to do so.

    A US media/legal firestorm will be very different to answering nice, understanding Mr Cole’s questions, and could actually stir some anger in the Coalition, especially if it gives US wheat farmers access to ‘our’ markets.

  24. In todays’s Washington Post

    “AWB is also under pressure from U.S. wheat farmers who are planning to sue the company in the U.S. Federal Court under the broad Racketeer Influence and Corrupt Organizations Act.”

    “Stewart described the suit as ill-conceived and vowed that AWB was prepared to fight it.

    The U.S. government has also responded to the Cole report by announcing Tuesday it would move to ban AWB’s American subsidiary AWB (USA) Ltd. from participating in U.S.-run export credit programs.”

  25. CoalitionUnity:
    After the government’s sabotage of the Costigan Royal Commission and fulsome praise heaped by the government on the incredible Evatt Royal Commission, exactly how much trust do you think the general public has these days in Inquiries and Royal Commissions?

    And now when the general public hears words like “eminemt”, “distinguished”, “outstanding”, “probity”, “integrity”, etcetra ad nauseum used to describe anyone even remotely connected with any such “festival for lawyers”, the B.S. protectors on. Can you blame them?

    How does that cynical saying go? “Never hold a Royal Commission unless you can guarantee the result”.

    The judiciary brought this on themselves and it is the judiciary themselves who must work very hard if they want to restore the trust of the general public. Nobody else can do it for them.

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