July 19, 2025 • 11 mins
Guest: Richard Baker
Original air date: September 6, 2024
Original description: Almost 20 years ago, Australian Wheat Board Limited hit the headlines over a $300 million kickback scandal involving wheat, weapons and Iraqi dictator Saddam Hussein.
Journalist Richard Baker talks to Sean Aylmer about his new podcast Baghdad Nights, which explores exactly what happened in Australia's biggest ever corruption scandal.
Find out more: https://fearandgreed.com.au
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Fearing Greed Sunday feature. I'm Sean Aylmer. Almost
twenty years ago Australian Wheat Board Limited hit the headlines
over a three hundred million dollar kickback scandal involving wheat
weapons and Iraqi dictated Saddam Hussein. Journalist Richard Baker spoke
to me about his podcast Bag Dag Nights, which explores
(00:21):
exactly what happened in Australia's biggest ever corruption scandal. We
spoke twelve months ago and it's as relevant as ever,
particularly in these difficult geopolitical times. I hope you enjoy it.
Welcome to the Fearing Greed business Interview. I'm sure, Alma,
(00:41):
many listeners would remember the Australian Wheat Board affair which
came to light almost twenty years ago. After all, it
was Australia's biggest ever corruption scandal, where wheat exporter AWB
Limited paid three hundred million dollars in kickbacks to Saddam
Hussein's regime in Iraq. It made international headline and forever
changed Australia's monopoly wheat exports system, and at its center
(01:06):
was a small group of wheat sales executives who became
the face of this massive corruption scandal. Now a new
podcast explores exactly how it unfolded by talking to the
executives who found themselves in the eye of the storm.
It's called Bag Dad Knights and it's the third season
of the Secrets We Keep podcasts. The host is journalist
Richard Baker, who covered the story twenty years ago and
(01:28):
is now seeing a different side of it all together. Richard,
Welcome to Fear and Greed.
Speaker 2 (01:32):
Thanks very much, Sean, great to be with you.
Speaker 1 (01:35):
I remember when this story was done. You worked for
a long time on it. Is it one of the
highlights of your journalism career?
Speaker 2 (01:44):
Yeah, I think that's certainly one of the most interesting
stories I've worked on, just because there are a million
rabbit holes you could go down, and it's got a
bit of everything. It's got obviously the trade and business
dynamic between Australia and a and the United Nations overlay
through this World for Food program, but also then the
(02:06):
wildcard of the United States in there, who were our
battlefield ally in Saddamu Sains Iraq, but our bitter trade
enemy when it came to selling wheat to that same market.
So it's just got all these angles and personalities and
then and then it blew up into this massive media
and political storm in Australia that kind of gave rise
(02:29):
to Kevin Rudd. It was the you know, the platform
that he surfed to prominence on. So yeah, definitely one
of the best stories I've worked on.
Speaker 1 (02:38):
So that's not familiar with the story, just run us
through the thumbnail sketch of what happened and how the
kickbacks worked.
Speaker 2 (02:45):
So in the in the late nineties, the Australian Wheat
Board was still a government owned corporation and it was
the only way Australian wheat farmers could sell and market
their wheat overseas. It'd had the monopoly on Australian weed exports,
and Iraq was increasingly one of its strongest markets. And
(03:09):
Iraq couldn't grow enough wheat, and its economy was being
crushed by economic sanctions designed to rein in sad Amhusan's
sort of warmongering tendencies. And we found ourselves, AWB found
themselves in an increasingly good market whereby Iraq was paying
(03:30):
great prices for Aussie wheat, buying millions of tons. It
was generating a lot of wealth in rural Australia and
keeping the National Party happy, which they were a junior
member of John Howard's coalition government back then. And it
was all done under the auspice of the United Nations
which had set up this thing called the Oil for
Food program. And basically what that was was a way
(03:53):
for a RAQ to sell its oil on the world market,
but the money would be stored in an account is
seen by the UN, so Saddam couldn't buy plutonium or
weapons of mass destruction and they could then order food
and medicine through that and AWB became the biggest supplier
of humanitarian goods through that program over four years between
(04:15):
nine ninety nine and two thousand and three billions of dollars. Now,
the catch was that Saddam Hussein's regime had the wheat
board over a bit of a barrel when Australia was
joining with the United States and the UK in making
aldamatums on him to give up his weapons of mass
(04:37):
destruction and then ultimately leading to the two thousand and
three invasion. And what happened was he basically said to AWB,
you want to keep selling to me I'm going to
get a bit more money out of this. I'm going
to whack on fifteen to twenty percent to these wheak contracts,
say that they're trucking fees or transport costs, and I'm
(04:57):
going to pocket about three hundred million out of this
that I shouldn't have.
Speaker 1 (05:02):
Stay with me, Richard will be back in a minute.
I'm speaking to Richard Baker, journalist and host of the
podcast bag Dad Knights. There were some pretty I mean
we talked about the political ramifications, but just the individuals involved.
(05:22):
There were some pretty colorful characters, including one who a
fantastic photo which I still remember so well, a big
man with a bit of a beer gut and a gun,
no shirt on. Tell me about those guys.
Speaker 2 (05:34):
So that's Trevor Flugi you're referring to there, who was
the man at the Australian Wheat Board while all this
was happening. He was the chairman of the board and
very hands on chairman, so often flying around the world,
including into Iraq to deal directly with ministers and officials
to sell heaps of ossie wheat. And that photo of
(05:57):
Trevor actually got that as a young reporter at the
age when this scandal was red hot in about two
thousand and six, and it's the only time I've ever
paid for I guess a story or in this case
a photo in twenty five years in journalism, and a
young woman came in and basically handed me at disc
and said, I think there's some things on here you'll
(06:20):
be interested in. Oh wow, And I took them upstairs
and I saw that photo with the gun and the
shirt off and the sweet face, and I thought, yeah,
I got to have this, and it went down and
soon I can get you about eight hundred bucks. Take it.
Let's do a deal. So yeah, even in a story
about bagman and middleman, I was kind of acting like
one and we put it on the front page and
it went off because it kind of it helped us
(06:41):
steal what we thought the story was at the time,
that these guys were just cavalier cowboys who do anything
for a deal.
Speaker 1 (06:48):
Did you get to speak to any of these guys
for your podcast?
Speaker 2 (06:52):
I did, so. Yeah. Trevor Flugi is pretty much the
main character in the podcast and why he's of interest.
He was chairman right throughout this period of time when
these controversial deals were done. But that photo was taken
when he was actually in Iraq as one of the
most senior Australian government representatives in the American led authority
(07:17):
that was governing Iraq after Saddamasin had been gotten rid of.
So Trevor was there on a one million dollar taxpayer
funded contract representing the Australian government, and so he was
incredibly politically connected as well, and the organization was, which
is why I think it's interesting because I've always found
(07:40):
it hard to believe that the government would have so
much care to use its kind of leverage with the
Americans to embed Trevor and two other of my main
characters in the podcast, Michael Long who was one of
AWB's gun salesmen, and Daryl Hockey, who was there like
political advisor. They were also sent into a rack in
(08:01):
senior officials by the government, and so if the government
cared that much about maintaining AWB's presence over there, I
find it hard to then understand how didn't know kind
of how it was doing its business.
Speaker 1 (08:16):
Yeah, it's pretty incredible. You talk about the political imifications,
and Kevin O seven just explain that.
Speaker 2 (08:23):
So this scandal broke really hard in late two thousand
and five, when the United Nations had done a very
extensive investigation into the corruption of its oil for food program.
It was being rauded left, right and center, well not
just by AWB, and when that report finally came out,
(08:47):
it was pretty big news and there was a lot
of pressure from overseas but also at home for John Howard,
who was the Prime Minister at the time, to get
to the bottom of it. Now, Kevin Rudd was Labor,
the Labor Oppositions Foreign Affairs spokesman at the time. He
didn't have a massive public profile. I think he just
started doing that Brecky shift on Sunrise with Joe Hockey. Yeah,
(09:12):
so this was like right up his alley, and he
was really clever at distilling the complexity, and he came
up with phrases like the wheat for weapons scandal and
basically was saying that the Howard government had gone into
this really controversial war in Iraq in two thousand and three,
(09:33):
which by two thousand and five was already turning out
to be a pretty bad thing, but we were secretly
paying the guy where we're going to war against three
hundred million bucks. He shouldn't have had and he was
just in the media day in day out hammering it,
and it really allowed him to raise his profile to
the extent that he could challenge Kim Beasley, who was
(09:54):
the opposition leader then, and then of course defeat Howard
at the next election.
Speaker 1 (10:01):
Richard Baker, you've been doing You've been journalists for a
long time. Did you learn much during the podcast that
you didn't actually know before?
Speaker 2 (10:10):
Yeah? I did, shown in all sorts of different ways.
So one of the things I didn't know to the
full extent that I do now having done this, was
that the process of how AWB got Trevor and the
other two blokes embedded into Iraq in two thousand and three,
(10:31):
that that kind of that was AWB's own idea. It
wasn't the government's idea. But they were able to get
meetings with John Howard and the Foreign Affairs Minister Alexander
Downer sort of in mid two thousand and two to say,
you know, we need to have these roles because we
need to be in a position to know what the
(10:51):
Americans are kind to try and do once they take control,
and be in a position to try and stop that. Now,
what's interesting about that is of course, the Australian public
hadn't been told that we were going to go to war,
because John Howard said he hadn't made his mind up
and only made his mind up weeks before we joined
the invasion in March two thousand and three. So that
(11:13):
intimacy between the wheat Board and the government, it doesn't
surprise me. But I didn't know that. Yeah, so I
found that really interesting.
Speaker 1 (11:22):
So Bagdad Knights you can presumably on Spotify, Apple, anywhere
you get a decent podcast, is that right, Richard.
Speaker 2 (11:28):
Yeah, at all the usual podcast outlets.
Speaker 1 (11:31):
Fantastic. Thank you very much for talking to Fear and Greed.
Speaker 2 (11:34):
Thank you, Sean.
Speaker 1 (11:35):
That was Richard Baker, journalist and host of the podcast
bag Dad Knights. This is the Fear and Greed Business Interview.
Join us every morning for the full episode of Fear
and Greed daily business years for people who make their
own decisions. I'm Sean Elmer. Enjoy your day.
Welcome to Fearing Greed Sunday feature. I'm Sean Aylmer. Almost
twenty years ago Australian Wheat Board Limited hit the headlines
over a three hundred million dollar kickback scandal involving wheat
weapons and Iraqi dictated Saddam Hussein. Journalist Richard Baker spoke
to me about his podcast Bag Dag Nights, which explores
(00:21):
exactly what happened in Australia's biggest ever corruption scandal. We
spoke twelve months ago and it's as relevant as ever,
particularly in these difficult geopolitical times. I hope you enjoy it.
Welcome to the Fearing Greed business Interview. I'm sure, Alma,
(00:41):
many listeners would remember the Australian Wheat Board affair which
came to light almost twenty years ago. After all, it
was Australia's biggest ever corruption scandal, where wheat exporter AWB
Limited paid three hundred million dollars in kickbacks to Saddam
Hussein's regime in Iraq. It made international headline and forever
changed Australia's monopoly wheat exports system, and at its center
(01:06):
was a small group of wheat sales executives who became
the face of this massive corruption scandal. Now a new
podcast explores exactly how it unfolded by talking to the
executives who found themselves in the eye of the storm.
It's called Bag Dad Knights and it's the third season
of the Secrets We Keep podcasts. The host is journalist
Richard Baker, who covered the story twenty years ago and
(01:28):
is now seeing a different side of it all together. Richard,
Welcome to Fear and Greed.
Speaker 2 (01:32):
Thanks very much, Sean, great to be with you.
Speaker 1 (01:35):
I remember when this story was done. You worked for
a long time on it. Is it one of the
highlights of your journalism career?
Speaker 2 (01:44):
Yeah, I think that's certainly one of the most interesting
stories I've worked on, just because there are a million
rabbit holes you could go down, and it's got a
bit of everything. It's got obviously the trade and business
dynamic between Australia and a and the United Nations overlay
through this World for Food program, but also then the
(02:06):
wildcard of the United States in there, who were our
battlefield ally in Saddamu Sains Iraq, but our bitter trade
enemy when it came to selling wheat to that same market.
So it's just got all these angles and personalities and
then and then it blew up into this massive media
and political storm in Australia that kind of gave rise
(02:29):
to Kevin Rudd. It was the you know, the platform
that he surfed to prominence on. So yeah, definitely one
of the best stories I've worked on.
Speaker 1 (02:38):
So that's not familiar with the story, just run us
through the thumbnail sketch of what happened and how the
kickbacks worked.
Speaker 2 (02:45):
So in the in the late nineties, the Australian Wheat
Board was still a government owned corporation and it was
the only way Australian wheat farmers could sell and market
their wheat overseas. It'd had the monopoly on Australian weed exports,
and Iraq was increasingly one of its strongest markets. And
(03:09):
Iraq couldn't grow enough wheat, and its economy was being
crushed by economic sanctions designed to rein in sad Amhusan's
sort of warmongering tendencies. And we found ourselves, AWB found
themselves in an increasingly good market whereby Iraq was paying
(03:30):
great prices for Aussie wheat, buying millions of tons. It
was generating a lot of wealth in rural Australia and
keeping the National Party happy, which they were a junior
member of John Howard's coalition government back then. And it
was all done under the auspice of the United Nations
which had set up this thing called the Oil for
Food program. And basically what that was was a way
(03:53):
for a RAQ to sell its oil on the world market,
but the money would be stored in an account is
seen by the UN, so Saddam couldn't buy plutonium or
weapons of mass destruction and they could then order food
and medicine through that and AWB became the biggest supplier
of humanitarian goods through that program over four years between
(04:15):
nine ninety nine and two thousand and three billions of dollars. Now,
the catch was that Saddam Hussein's regime had the wheat
board over a bit of a barrel when Australia was
joining with the United States and the UK in making
aldamatums on him to give up his weapons of mass
(04:37):
destruction and then ultimately leading to the two thousand and
three invasion. And what happened was he basically said to AWB,
you want to keep selling to me I'm going to
get a bit more money out of this. I'm going
to whack on fifteen to twenty percent to these wheak contracts,
say that they're trucking fees or transport costs, and I'm
(04:57):
going to pocket about three hundred million out of this
that I shouldn't have.
Speaker 1 (05:02):
Stay with me, Richard will be back in a minute.
I'm speaking to Richard Baker, journalist and host of the
podcast bag Dad Knights. There were some pretty I mean
we talked about the political ramifications, but just the individuals involved.
(05:22):
There were some pretty colorful characters, including one who a
fantastic photo which I still remember so well, a big
man with a bit of a beer gut and a gun,
no shirt on. Tell me about those guys.
Speaker 2 (05:34):
So that's Trevor Flugi you're referring to there, who was
the man at the Australian Wheat Board while all this
was happening. He was the chairman of the board and
very hands on chairman, so often flying around the world,
including into Iraq to deal directly with ministers and officials
to sell heaps of ossie wheat. And that photo of
(05:57):
Trevor actually got that as a young reporter at the
age when this scandal was red hot in about two
thousand and six, and it's the only time I've ever
paid for I guess a story or in this case
a photo in twenty five years in journalism, and a
young woman came in and basically handed me at disc
and said, I think there's some things on here you'll
(06:20):
be interested in. Oh wow, And I took them upstairs
and I saw that photo with the gun and the
shirt off and the sweet face, and I thought, yeah,
I got to have this, and it went down and
soon I can get you about eight hundred bucks. Take it.
Let's do a deal. So yeah, even in a story
about bagman and middleman, I was kind of acting like
one and we put it on the front page and
it went off because it kind of it helped us
(06:41):
steal what we thought the story was at the time,
that these guys were just cavalier cowboys who do anything
for a deal.
Speaker 1 (06:48):
Did you get to speak to any of these guys
for your podcast?
Speaker 2 (06:52):
I did, so. Yeah. Trevor Flugi is pretty much the
main character in the podcast and why he's of interest.
He was chairman right throughout this period of time when
these controversial deals were done. But that photo was taken
when he was actually in Iraq as one of the
most senior Australian government representatives in the American led authority
(07:17):
that was governing Iraq after Saddamasin had been gotten rid of.
So Trevor was there on a one million dollar taxpayer
funded contract representing the Australian government, and so he was
incredibly politically connected as well, and the organization was, which
is why I think it's interesting because I've always found
(07:40):
it hard to believe that the government would have so
much care to use its kind of leverage with the
Americans to embed Trevor and two other of my main
characters in the podcast, Michael Long who was one of
AWB's gun salesmen, and Daryl Hockey, who was there like
political advisor. They were also sent into a rack in
(08:01):
senior officials by the government, and so if the government
cared that much about maintaining AWB's presence over there, I
find it hard to then understand how didn't know kind
of how it was doing its business.
Speaker 1 (08:16):
Yeah, it's pretty incredible. You talk about the political imifications,
and Kevin O seven just explain that.
Speaker 2 (08:23):
So this scandal broke really hard in late two thousand
and five, when the United Nations had done a very
extensive investigation into the corruption of its oil for food program.
It was being rauded left, right and center, well not
just by AWB, and when that report finally came out,
(08:47):
it was pretty big news and there was a lot
of pressure from overseas but also at home for John Howard,
who was the Prime Minister at the time, to get
to the bottom of it. Now, Kevin Rudd was Labor,
the Labor Oppositions Foreign Affairs spokesman at the time. He
didn't have a massive public profile. I think he just
started doing that Brecky shift on Sunrise with Joe Hockey. Yeah,
(09:12):
so this was like right up his alley, and he
was really clever at distilling the complexity, and he came
up with phrases like the wheat for weapons scandal and
basically was saying that the Howard government had gone into
this really controversial war in Iraq in two thousand and three,
(09:33):
which by two thousand and five was already turning out
to be a pretty bad thing, but we were secretly
paying the guy where we're going to war against three
hundred million bucks. He shouldn't have had and he was
just in the media day in day out hammering it,
and it really allowed him to raise his profile to
the extent that he could challenge Kim Beasley, who was
(09:54):
the opposition leader then, and then of course defeat Howard
at the next election.
Speaker 1 (10:01):
Richard Baker, you've been doing You've been journalists for a
long time. Did you learn much during the podcast that
you didn't actually know before?
Speaker 2 (10:10):
Yeah? I did, shown in all sorts of different ways.
So one of the things I didn't know to the
full extent that I do now having done this, was
that the process of how AWB got Trevor and the
other two blokes embedded into Iraq in two thousand and three,
(10:31):
that that kind of that was AWB's own idea. It
wasn't the government's idea. But they were able to get
meetings with John Howard and the Foreign Affairs Minister Alexander
Downer sort of in mid two thousand and two to say,
you know, we need to have these roles because we
need to be in a position to know what the
(10:51):
Americans are kind to try and do once they take control,
and be in a position to try and stop that. Now,
what's interesting about that is of course, the Australian public
hadn't been told that we were going to go to war,
because John Howard said he hadn't made his mind up
and only made his mind up weeks before we joined
the invasion in March two thousand and three. So that
(11:13):
intimacy between the wheat Board and the government, it doesn't
surprise me. But I didn't know that. Yeah, so I
found that really interesting.
Speaker 1 (11:22):
So Bagdad Knights you can presumably on Spotify, Apple, anywhere
you get a decent podcast, is that right, Richard.
Speaker 2 (11:28):
Yeah, at all the usual podcast outlets.
Speaker 1 (11:31):
Fantastic. Thank you very much for talking to Fear and Greed.
Speaker 2 (11:34):
Thank you, Sean.
Speaker 1 (11:35):
That was Richard Baker, journalist and host of the podcast
bag Dad Knights. This is the Fear and Greed Business Interview.
Join us every morning for the full episode of Fear
and Greed daily business years for people who make their
own decisions. I'm Sean Elmer. Enjoy your day.
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