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Briefs (left)

Australia’s Prime Minister Denies Knowing of Iraq Kickbacks

By Raymond Bonner

In a brief appearance before a commission investigating accusations that an iconic Australian wheat company paid millions of dollars to the government of Saddam Hussein, Prime Minister John Howard said he had never seen any of the cables over a six-year period that raised suspicions about the payments.

“I believe I did not read or receive any of the relevant cables at any time during the relevant period,” Howard said Thursday.

The focus of the investigation is on AWB Ltd., which Howard noted was a respected wheat exporting company that had represented Australian growers since the 1930s. The company is accused of paying more than $200 million to Saddam’s government under the United Nations’ oil for food program, which allowed Iraq to sell some of its oil and use the proceeds to buy food despite penalties imposed after Iraq invaded Kuwait in 1990.

It was the first time in two decades that an Australian prime minister had been summoned before a judicial inquiry, but it was relatively easy going for Howard. The commission’s counsel questioned him for only 45 minutes, and the chairman of the commission, Terence Cole, did not allow cross-examination by a lawyer representing AWB executives.

U.S. Seeks to End What It
Considers Tax Scheme

By David Cay Johnston

The Justice Department is seeking a court order to block a Michigan couple from promoting what the government says is the No. 1 tax scheme in the country and to force them to return more than $20,000 in tax refunds. The government also sued seven people it said used the couple’s advice, in a move to recover the refunds they obtained.

The main action was against Peter Eric Hendrickson, 50, of Commerce Township, Mich., and his wife, Doreen, 51, who maintain that only a narrow slice of income is subject to tax. Hendrickson’s self-published book, “Cracking the Code,” shows people how to exploit what he considers loopholes in the IRS system for processing refunds.

On his Web site, Hendrickson claims that his clients have pocketed more than $896,000 in refunds with no adverse reaction from the government.

According to the Justice Department complaint, filed Wednesday in U.S. District Court in Detroit, “Hendrickson’s bogus zero-income scheme fraudulently asserts that the payment of taxes is voluntary and that his customers are legally entitled to refunds of all taxes withheld from their paychecks.”

Treasury Note Yield Passes
Five Percent Mark

By Vikas Bajaj

The era of cheap money may finally be nearing its end.

Investors pushed up the yield on the U.S. government’s benchmark note on Thursday to more than 5 percent, its highest point in nearly four years, signaling that many borrowers will soon be paying more on mortgages and home equity loans.

Driven by a stronger economy and a nearly two-year-long money tightening campaign by the Federal Reserve, the rising level of interest rates across the board is expected to have the biggest impact on people who took out home loans with low introductory interest rates that are set to adjust in line with market rates in the next few years.

The 10-year Treasury note, which crossed the 5 percent threshold on Thursday for the first time since June 2002, serves as a touchstone for a variety of borrowers, from consumers to corporations and governments. But it is most closely tied to mortgages and is likely to play a role in curbing the home-buying frenzy in many parts of the country and slowing price increases.