In the centre of San Antonio, Texas, stands the famous Alamo, where American soldiers were overrun by Mexican fighters in 1836. Today, just over the road, there's another skirmish, again involving foreigners.

ALAN TRACY, PRESIDENT, US WHEAT ASSOCIATION: I'm going to spend my time discussing some events that have really been quite astounding recently in Australia.

This is the annual general meeting of the US Wheat Association, the peak export body for American wheat growers. And their president, Alan Tracy, has the Australian Wheat Board squarely in his sights.

ALAN TRACY: Folks, this is really very serious stuff. We're talking about a wheat company that was the largest single source of kickbacks to the Saddam Hussein regime, under program that was designed for humanitarian purposes - kickbacks that NBC has reported could be funding the insurgent attacks against our soldiers yet today and against Australian soldiers.

Tracy is one of the most powerful players in US wheat circles and he's clearly been following events in the Cole Inquiry very closely. Each day his press secretary emails thousands of farmers around the US with the latest news from Sydney.

ALAN TRACY: The testimony, documents and admissions in those transcripts have been outstanding. They have, in fact, revealed a web of deceit that is far more devious than we had previously imagined.

Back in 2003, Tracy's organisation received copies of the AWB's inflated contracts and made its concerns known, but ran into a brick wall.

REPORTER: At the time, the Australian Trade Minister called your allegations 'insulting'. Do you feel vindicated now?

ALAN TRACY: Well, certainly things have tended to bear out what we had been suggesting might have been the case back in 2003. I think there was a campaign to discredit us coming from the Australian Wheat Board at that time, but I think, in the process, they've only further discredited themselves.

Tracy is also concerned about revelations that former Australian ambassador Michael Thawley may have misled a senior US senator in order to prevent an inquiry into the matter.

ALAN TRACY: I don't know whether Ambassador Thawley was in on the full story or not, the odds are that he probably wasn't. But the fact is, if he wasn't aware that what he was saying was not true, then he was duped, so there have been a lot of people lied to in this process of this whole sad series of events.

Tracy wouldn't venture an opinion on what the Australian Government may or may not have known about the AWB's behaviour but journalist Jerry Hagstrom is suspicious.

JERRY HAGSTROM, JOURNALIST: I was really surprised at how much the embassy in Washington took up the case. To me it was very unusual that an embassy would become so involved in the case of a private company, which AWB was supposed to be.

In late 2003, Hagstrom was the first journalist to break the story of the AWB's kickbacks to Saddam. At the time, Ambassador Thawley described Hagstrom as a "rogue journalist".

JERRY HAGSTROM: The funny thing is that I write for a very established establishment publication - the 'National Journal', and 'National Journal's Congress Daily' as well as other agricultural publications that farmers read, and I would say that we're not exactly a fly-by-night operation.
I wondered at the time, if Rupert Murdoch's companies got into trouble or if an Australian mining company got into trouble, would the Australian Embassy take up their cause with the same vigour?
And, you know, we don't know that but, you know, in the US we do wonder about the status of AWB because it used to be an Australia Government entity, as the Australian Wheat Board. They say it's private, we kind of don't quite believe that. We think it's an awfully close relationship. And to me, the role that the embassy played here is still very suspicious.

Hagstrom no longer gets invited to functions at the Australian Embassy.
Farmers here are angry at what's been dubbed the wheat-for-weapons scandal. Mark Edgar farms 5,000 acres of wheat in Arizona. He's appalled that the AWB may have indirectly funded weapons for Saddam's regime.

MARK EDGAR, FARMER: I would think the true irony in all this would be that if you had Australian wheat farmers whose sons went over there to fight and they were, in fact, either killed or injured in that conflict, that the Wheat Board - or AWB - had a part in that. That would be a sheer tragedy.

Now Alan Tracy wants to punish the AWB. He's calling for the Wheat Board to be all but banned from operating in the US, home to the world's largest wheat futures exchange.

ALAN TRACY: First, suspend the AWB monopoly from participating in the US futures markets. Second, bar the AWB from any further access to the US Government credit programs that they have used and abused. Third, prohibit AWB from using any US ex-im bank programs, particularly for wheat sales to Iraq.

If that wasn't enough, Tracy is also calling for something that will enrage most Australian wheat growers. He wants the AWB's "single desk" monopoly abolished. The AWB currently controls the export of all Australia's wheat, a system the Americans regard as anti-competitive.

ALAN TRACY: Dismantling the single desks has been an important part of our goals for a long period of time. This series of events may hasten that along. We hope that the Australians themselves are going to see that this monopoly is an archaic thing, which is not in the long-term benefit of Australian farmers.

FARMER: It could be at a more level playing field, that's for sure.

REPORTER: Why is that?

FARMER: Because they were selling from a single desk seller, you know, and then of course going against all the international rules and stuff, which is really bad, and trying to be a good friend of the world but then come in from the back door and pull something like that. That's just about unforgivable.

Every farmer here would like to see an end to the AWB monopoly, but why wouldn't they? They know that if Australia falters they're the ones who'll reap the rewards.

REPORTER: Are you looking forward to markets that might open up now as a result of the AWB scandal?

US FARMER: Oh, yes, definitely, we are anxious to get back into Iran, and Iraq was a wonderful market for us. So we're anxious to get back into that market too.

This scandal could possibly provide US farmers with some new markets. What do you think?

FARMER: Oh, certainly, absolutely. That's why I'm starting to think that the Australian Wheat Board is my best friend.

But American wheat exports are underpinned by massive government subsidies. Here in the United States, free trade can sometimes seem like a one-way street.

REPORTER: Does it really help American farmers, getting subsidies?

FARMER: Well, we have to have some kind of a safety net.

REPORTER: Would you guys be able to survive without subsidies?

FARMER: Well, without a safety net we wouldn't be able to survive very well, no.

A safety net that, over the last 10 years, has benefited US wheat farmers to the tune of US$20 billion. Alan Tracy is happy to talk about cracking down on anti-competitive behaviour, just as long as it's not here at home.

REPORTER: You say the Australian monopoly, the single operation system, that's what is unfair and against free trade, but aren't subsidies unfair?

ALAN TRACY: There are subsidies of various types in various nations. Our producers are pleased that our government provides some support but, let me tell you, it's a tough, competitive world out there and the Australians are as capable of competing in it as anybody in the world.