Australian corruption investigation

A Reserve Bank currency firm was
willing to supply prostitutes and pay bribes to win contracts, according to a
federal police witness at the centre of Australia’s most serious corruption investigation.

The revelation is one of many made
by a key witness in the federal police inquiry into the Reserve Bank company,
Securency International, which makes polymer banknotes.

The witness has told an
investigation by The Age and ABC TV’s Four Corners that a middleman hired by
Securency to win contracts from foreign governments told him that he intended
to bribe a central bank governor from an Asian country.

The witness, who was a Securency
employee, has given the Australian Federal Police his diary in which he
recorded the middleman telling him in 2007 that the ”governor would be very
happy if the commission [payment] was increased”.

The witness has said that one of
the most senior Securency managers told him to arrange an Asian prostitute for
a visiting deputy governor of a foreign central bank.

”Next time that this official was
in town, [I was told] that I was to procure him a bodyguard, and with raised
eyebrows and a wink … a particular type of bodyguard being an Asian woman. He
was suggesting I might like to procure a prostitute for one of the central bank
officials on his visit to Melbourne,” said the police witness in an interview
with Four Corners. The witness said he did not act on the request although he
believed other employees had arranged prostitutes.

In a 2008 diary entry, the witness
recorded that a consultant employed in Asia by Australia’s overseas trade
agency Austrade told him that to win contracts Securency needed to hire someone
to bribe officials or ”to pass white envelopes for you”.

Austrade this week confirmed the
Securency employee-turned-police-witness did report the comment to an
Australian ambassador in the Asian country where it was made in 2008, but said
that it had never been brought specifically to Austrade’s attention.

Austrade also stressed it had never
endorsed bribery

Securency is a Melbourne-based
polymer banknote company half-owned and supervised by the Reserve Bank. It has
employed a network of global agents to help it convince foreign central banks
and governments to buy its banknotes.

A federal police taskforce is
investigating Securency for allegedly bribing government officials in countries
including Nigeria, Malaysia and Vietnam.

International figures, including
former Malaysian deputy prime minister, now opposition leader Anwar Ibrahim and
Nigerian central bank governor Lamido Sanusi, have urged the Australian
government to reveal how far the RBA’s bribery scandal reaches. ”How could
Securency allow … huge bribes in the name of commissions?” Mr Ibrahim told
Four Corners.

”It’s something very difficult for
me to comprehend, how is it a system [in Australia], with such a strong
institution and respect for good government … could allow this,” he said.

Labor and Coalition senators have
voted against a motion by Greens leader Bob Brown for a parliamentary inquiry
into Securency’s overseas dealings.

In a 2008 diary excerpt by the
police witness, a Securency employee is recorded as telling him the RBA firm
paid very high commissions to middlemen to secure a contract in Nigeria because
so many people were ”feeding off it”. ”A range of senior government ministry
officials and central bank officials would’ve been getting a slice of that 20,
25 per cent commission,” the witness said.

In March, the Securency board released
a scathing audit of the company’s dealings with its agents, who have received
almost $50 million in commission payments since 2003. After the audit’s
release, the board, chaired by RBA assistant governor Bob Rankin, announced the
departure of the two top executives, Myles Curtis and John Ellery.

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