A former AWB manager was accused by one of his colleagues of collecting $US16 million ($A21.3 million) in kickbacks from wheat shipments to Saddam Hussein's regime, the Cole inquiry has been told.

Mark Rowland made the accusation during an interview with AWB's in-house lawyer, Rosemary Peavey, and external legal consultant, Chris Quennell, in April, 2004, during an internal investigation into AWB's wheat contracts with Iraq.

The lawyers interviewed several AWB employees who had raised concerns about apparent bribery, corruption, questionable trucking fees and suspicious and inflated wheat contracts.

Mr Rowland told the lawyers he believed AWB's chartering division manager, Michael Watson, received kickbacks from Michael Kudelka, an employee of the chartering company, Atlantic & Orient Shipping, which transported AWB's wheat to Iraq.

Mr Rowland said Mr Watson had used Mr Kudelka at Atlantic & Orient exclusively and this was causing a lot of problems.

Mark was of the view that Michael Watson received 50 cents per tonne paid to a London account from Brave (facilitation fee to agency), according to notes of the interview taken by the lawyers at the time and tendered to the Cole inquiry.

He also received $US1 from Kudelka for every tonne shipped from Australia.

This totals approximately $US16 million offshore over a four-year period.

Mark was of the view that there was a lot of corruption within AWB around that time.

Mr Rowland told the lawyers he had tried to resign from AWB when Mr Watson was difficult and stressed.

He said AWB's chief financial officer, Paul Ingleby, also had concerns that AWB's arrangement with Mr Kudelka was not above board.

Mr Watson resigned on November 1, 2000.

Mr Rowland said that, once Mr Watson left AWB, Mr Kudelka no longer received chartering work from the Australian wheat exporter due to poor performance in the past.

Iraq Australia