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Home / New Zealand

Zespri chief in hot seat over kickbacks

5 Nov, 2006 10:00 AM8 mins to read

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KEY POINTS:

Tim Goodacre had not eaten many kiwifruit when he began heading Zespri at the end of 2002.

New Zealand kiwifruit growers didn't care: He was a big gun at the Australian Wheat Board, and scoring him was a coup.

And the Australian certainly didn't seem to mind downgrading from the wheat giant's 42,000 growers to the 2500-strong kiwifruit body. He even promised to give up supporting the Melbourne Storm and back the Warriors instead.

The new job looked even better as the wheat board's dealings with Saddam Hussein's regime in Iraq were revealed.

Now Mr Goodacre anxiously awaits the findings of a royal commission of inquiry due this month into the board's payment of $330 million in kickbacks in the oil-for-food scandal.

He has been named as one of 16 past or present wheat board figures who could face criminal charges if the commissioner accepts confidential recommendations put to him by his legal advisers.

Mr Goodacre held a top job at the wheat board for much of the time the kickbacks were allegedly paid between 1999 and 2003.

The board is said to have paid money disguised as trucking fees to help to secure wheat contracts under the UN's oil-for-food programme in Iraq.

The trucking fees, paid to a Jordanian company, are said to have gone into Saddam's coffers, breaching the UN sanctions designed to starve him of cash.

There was big money at stake. Some of the wheat board's Iraqi contacts would be dressed in full military garb. Others would die in supposed accidents where cars were found riddled with bullets.

Mr Goodacre's evidence given to the inquiry in February was more mundane. It referred mainly to company structure and responsibilities, whether he bothered to read his emails when he worked for the board in Melbourne.

The framework of the kickbacks was already in place when a restructuring in June 2000 bought him closer to the action.

He was appointed to the unfamiliar role as group general manager (trading), which had responsibility for the international marketing division that drove the Iraq wheat sales.

He gave evidence that he knew then about the trucking payments, but never knew they were kickbacks.

His evidence shows one of his first moves was to appoint a friend, Charles Stott, as general manager of international marketing and sales - a man described by the Australian media as an old Iraq hand who had been wheeling and dealing in oil and wheat for decades in the Middle East.

The wheat board man in the Middle East at the time, Mark Emons, felt passed over for the promotion and quickly resigned.

It was him who told the inquiry that knowledge of the kickbacks was widespread and said he and Mr Goodacre had negotiated an exit clause absolving him of responsibility for the payments.

Mr Goodacre said Mr Emons was "mistaken".

They had not talked about the trucking payments in the few days they worked together before the resignation took effect.

Another strand allegedly tying Mr Goodacre to knowledge of the kickbacks was a report he and Mr Stott commissioned from accounting firm Arthur Andersen in late 2000.

He gave evidence this was not motivated by concerns over the Iraq contracts but to check if anyone in the international marketing group was engaged in illegal or unethical behaviour.

The firm interviewed staff, checked computer files, emails and mobile phone records. They reported back in February 2001, and Mr Goodacre's evidence shows he was told of a risk that the money paid to the Jordanian trucking firm "may have been diverted to other purposes" and some "may have been being diverted back to Iraq". He also learned that certain arrangements had been set up by the previous international market and management team.

Under examination, Mr Goodacre said he knew this would have been in breach of the UN sanctions.

His evidence shows he left Mr Stott to follow up the matter. He said Mr Stott later told him the payments were legitimate after consultations that included the Australian Department of Foreign Affairs and Trade and he left the issue there.

As for emails that may have referred to the trucking payments, his explanation was simple: With emails flying about a big organisation in which he had around 300 people reporting to him, he did not read them all.

In January 2002, Mr Goodacre was moved out of the trading group after 18 months and into a role as general manager (corporate) with different responsibilities.

He resigned in November, and headed straight to Zespri.

The storm about the kickbacks is said to have started to break in June 2003, but did not truly go public until a UN report in October 2005.

The royal commission followed in November, and Mr Goodacre's name first really surfaced in February this year.

Australian journalists who have followed and analysed the evidence given to the inquiry have told the Herald that Mr Goodacre was not portrayed as a major figure, and if charges were brought against him it would be because he was found to be one of a group that "knew and did nothing".

Mr Goodacre has denied any wrongdoing, any knowledge that the board was breaching UN sanctions by making payments to Iraq, and that he condoned or participated in such breaches.

However, when the scandal broke it would at the very least not have come as a surprise to him, given his knowledge of Arthur Andersen's concerns dating back to the February 2001 report.

And, as the Herald has learned, it would have come as no surprise to Zespri either, given that the report had been raised during the hiring process as a positive example of the way he had dealt with "proprietary" issues.

Mr Goodacre resigned in July, five months after giving evidence to the inquiry, saying he wanted to pursue other aspirations. He is to leave in March.

The Zespri board, which has backed him all the way, says the resignation has absolutely nothing to do with the inquiry. The board admits engaging a lawyer to independently monitor Mr Goodacre's evidence and any concerning him.

Mr Goodacre, 52, could not discuss the leaked recommendations because of a confidentiality agreement, but told the Herald the allegations had been stressful.

He had attended the inquiry voluntarily and spent only a couple of hours there.

"No one likes your integrity to be questioned, and I, particularly, live on the basis that I have integrity and that's my reputation.

"No one likes their reputation to be smeared - certainly unfairly - and hearsay and allegation are easy things to make and difficult to push back."

Mr Goodacre said he was grateful for the support of the Zespri board and the wider kiwifruit industry.

He believed they were supportive because of the way he operated.

"I'm straight. I don't bend rules and I don't hide things."


How it happened

* e scandal stemmed from the United Nations oil-for-food programme, set up in 1996 so Iraq could buy food and medicine for its people through the sale of its oil while still starving Saddam Hussein of cash until he gave up his weapons of mass destruction. It ceased after the United States invasion in 2003.

* It was policed by the UN but dogged by allegations of bribery and corruption, including claims that oil contracts were awarded to companies that routed a percentage of profits back to Saddam's regime.

* Chief among these was the Australian Wheat Board. A UN report in October 2005 found the board was the biggest single source of kickbacks, allegedly paying out a total of $330 million.

* The wheat board allegedly beat tough international competition for the Iraq market by paying so-called trucking charges to a company that was diverting the money to Saddam's regime.

* The Australian Government set up a royal commission of inquiry to further investigate.

* Present Zespri chief executive Tim Goodacre was a senior manager at the wheat board for much of the time the kickbacks were allegedly paid. He gave evidence to the inquiry and denies knowing the trucking payments were actually kickbacks.

* It has been revealed that the commissioner's legal adviser has recommended that Goodacre be one of a group charged with offences relating to dishonesty and deception.

* The commissioner's findings are due on November 24. The final decision on charges, if any, will then be made by the Australian Director of Public Prosecutions.

* A 2005 investigation by the New Zealand Ministry of Foreign Affairs and Trade cleared dairy giant Fonterra, JB Sales and Ecroyd Beekeeping Supplies of breaches under the programme.

* UN Secretary-General Kofi Annan was implicated over an oil deal involving his son. Annan was eventually cleared, although his son's integrity was questioned.

- Additional Reporting Stephen Ward

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