U.S. farmers sue wheat exporter / LJWorld.com

Archive for Friday, April 20, 2007

By Roxana Hegeman - Associated Press Writer

April 20, 2007

AP File Photo

Wade Hampton cuts wheat at his family's farm in northwest Ford County, Kan., in this summer 2004 photo. U.S. wheat farmers have filed a lawsuit against an Australian wheat exporter, which they claimed paid bribes to Saddam Hussein's regime and cost American growers millions of dollars.

Wichita — U.S. wheat farmers have filed a class-action lawsuit against Australian wheat exporter AWB Ltd., alleging it paid bribes and kickbacks to the Saddam Hussein regime that cost wheat growers in America millions in lost sales.

The lawsuit, filed Monday in federal district court in New York City, contends AWB and its subsidiary AWB (U.S.A.) Ltd. were involved in a bribery and money laundering conspiracy that included various agencies of the Iraqi government, a Jordanian trucking company and international shipping companies. It also alleges violations of U.S. antitrust laws.

The complaint contends the companies illegally funneled money from the United Nations' oil-for-food program through bank accounts in the United States.

The suit, which seeks more than $100 million in damages, alleges violations of the Racketeering Influenced Corrupt Organizations Act, or RICO.

Benjamin Brown, a New York lawyer involved in the lawsuit, said AWB participated in the scheme in exchange for the Iraqis excluding its American competitors, which depressed prices for American farmers.

"AWB knew by participating in this scheme they would be profiting really at the expense of American farmers," Brown said.

AWB, the exclusive marketeer of bulk wheat exports from Australia, did not immediately return a call for comment. But a news release posted on its Web site noted that the complaint had not been served, adding that, if it is, AWB will vigorously defend the claim.

The lawsuit filed on behalf of six named plaintiffs seeks class-action status, which if granted would bring in about 100,000 U.S. growers of hard red winter wheat.

It is based on findings of an investigation by the United Nations in October 2005 that found AWB was the largest source of kickbacks, Brown said. Those findings were verified by an investigation by the Australian government that was completed in November.

A similar lawsuit filed last year was withdrawn because lawyers wanted to wait until the Australian investigation was completed, and they wanted to re-evaluate the complaint, Brown said.

Iraq once was a top buyer of U.S.-grown hard red winter wheat. During the 1980s, U.S. wheat accounted for 29 percent of the Iraqi market - second only to Australia with a 38 percent share.

But that was lost because of U.S. sanctions on Iraq between 1990 and 1997, a period in which Australia gained a monopoly with 73 percent of that market.

In 1997, U.S. wheat was allowed under the UN oil-for-food program. By 1998, U.S. wheat had regained a 6 percent market share in Iraq.

Named plaintiffs in the case are John Boyd, Bakersville, Va.; Veryl Switzer, Manhattan, Kan.; Gillan Alexander, Nicodemus, Kan.; Rod Bradshaw, Oakley, Kan.; Wilburt Howard, Oakley, Kan.; and Pat Dailey, Chester, Mont.

"The people expressing interest early on were from Kansas, and it isn't surprising when talking about the American breadbasket," Brown said.