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U.S. wheat farmers file suit in AWB Iraqi scandal
American wheat farmers filed a class action lawsuit April 16 in federal district court in New York City against AWB Limited (AWB), the private entity charged with exporting Australian wheat to foreign markets, and its U.S. subsidiary, AWB (U.S.A.) Limited. The U.S. wheat farmers that filed the suit are John Boyd, Baskerville, Va.; Veryl Switzer, Manhattan, Kan.; Gillan Alexander, Nicodemus, Kan.; Rod Bradshaw, Oakley, Kan.; Wilburt Howard, Oakley, Kan.; and Pat Daily, Chester, Mont. From 1999 until 2003, AWB allegedly paid bribes and kickbacks to the Saddam Hussein regime in exchange for exclusive contracts for wheat sales under the United Nations' "Oil for Food Program" and to keep its competition, American-grown wheat, out of the Iraqi market. As a result, U.S. farmers were stuck with an oversupply of wheat during that period which depressed the prices at which they could sell their wheat. The complaint focuses on farmers who produced hard red winter wheat during the relevant period. HRW wheat accounts for about 40 percent of total U.S. production and is grown by more than 100,000 farmers primarily in the Great Plains, including Texas, Oklahoma, Kansas, Nebraska, Colorado, Wyoming, South Dakota and Montana. The lawsuit invokes the federal antitrust and civil RICO laws to force AWB and its U.S. subsidiary to compensate American farmers for the damages they suffered. Damages to American farmers could be well over $100 million. The lawsuit is based largely on the findings of two independent investigations into AWB's conduct during the Oil for Food Program. The United Nations completed an eighteen-month investigation in October of 2005, finding that AWB was the single largest source of kickbacks in one of the largest financial scandals in modern history--the manipulation of the $60 billion Oil for Food Program. The findings of the UN investigation were verified and further detailed by an Australian government investigation completed in November of 2006. "The U.S. wheat industry has long been opposed to state trading enterprises like AWB, and will continue to work to end their distorting influence on world wheat trade," said Leonard Schock, chairman, U.S. wheat Associates. "The class action suit just filed focuses on the actions of corporate AWB, not any individual Australian wheat producers who, by trusting AWB, are themselves victims of its heavy-handed tactics. In fact, we welcome competition with our Australian counterparts in an open, fair and transparent market place." Schock said that the U.S. wheat Associates has been monitoring the situation for more than a year, but they are not a part of the suit and did not initiate the action. The National Association of wheat Growers CEO Darren Coppock said his organization of wheat growers also recognizes the AWB but is not involved in the suit. "The U.S. wheat industry, including NAWG, has a long track record of opposition to monopoly state trading enterprises. AWB's activities have resulted in scrutiny by the Australian government, Australian producers and others into what was clearly a corrupt business enterprise. This case is the latest entry in the dossier." According to Benjamin Brown, a partner at Cohen, Milstein, Hausfeld & Toll, PLLC (Washington, DC) who is representing the plaintiff farmers, "Wheat is a commodity market where price effects are globally-related. AWB knew that, by paying these bribes, it would profit at the direct expense of American farmers--its only real competition in the Iraqi market. "Unfortunately, AWB achieved its monopoly in the Iraqi market not through fair competition, but by deceiving the United Nations into unwittingly funding Hussein's corrupt regime. There has been a great deal of talk on Capitol Hill, and in the wheat farming community, about the damage inflicted on U.S. farmers by AWB's conduct. Today's filing is the first concrete step toward recovery." The complaint is available at www.cmht.com. Date: 4/19/07
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