RR Phantom
Location : Wasted Space
Job/hobbies : Cayman Islands Actuary
 |  Subject: OZschwitz: RBA subsidiary in improper business dealings to win banknote printing contracts  Mon Jun 22, 2009 2:52 am | |
| THE Australian Federal Police is launching a full-scale investigation into allegations that a Reserve Bank of Australia subsidiary engaged in improper business dealings overseas to win banknote printing contracts.
The move by the AFP's economic and special operations division to begin a full inquiry comes after a three-week preliminary probe by a small team of federal agents.
The AFP was asked by the Reserve last month to assess revelations in the Herald that Securency Pty Ltd - a bank-note company half-owned by the RBA - had allegedly paid lucrative commissions to shady, well-connected overseas businessmen who helped it win contracts.
Some of these foreign agents have previously been implicated in official corruption inquiries in Africa and Asia, and some commission payments have been paid into tax haven accounts.
Senior police officials in Canberra approved a recommendation to begin a major inquiry with additional agents and resources, after agents in Melbourne finished assessing financial intelligence and conducting preliminary inquiries.
The AFP confirmed to the Herald that the Securency case had progressed from an assessment phase to an investigation, but declined to comment further. The AFP's decision to commit to a full-scale investigation will add to the growing pressure on the Reserve Bank to explain if it knew of, and approved, the activities of Securency, which makes polymer bank notes used in Australia, Nigeria, Vietnam and 23 other countries.
The investigation into Securency revealed that company insiders were concerned that the payment of commissions to overseas agents with questionable backgrounds increased the company's exposure to allegations of corrupt practices, such as kickbacks to foreign officials.
Securency paid $10 million in commissions to its agent in Vietnam, CFTD. The agent briefly employed the son of the Vietnam central bank governor who made the decision to use Securency's plastic notes.
Along with millions of dollars in commissions - including some paid to accounts in the Seychelles, Switzerland and the Bahamas - Securency officials have travelled to Sudan to discuss potential deals.
The US has banned dealings with Sudan because of its links to terrorism and human rights abuses. The AFP investigation is likely to include scrutiny of Securency's sister company, Note Printing Australia, which is fully owned by the Reserve Bank.
In contrast to Securency, Note Printing Australia (NPA) stopped making commission payments to its foreign agents in 2007 due to integrity concerns. NPA sent two employees to Iraq in 1998 to discuss its banknote products with the regime of Saddam Hussein, despite international sanctions banning financial dealings with the country.
Securency and NPA are both chaired by the Reserve Bank's assistant governor, Robert Rankin, and the RBA has a role in auditing both companies.
The Federal Government has referred all questions about Securency to the Reserve Bank.
The Greens leader, Bob Brown, and the anti-corruption NGO Transparency International have demanded the Reserve Bank answer questions about Securency's operations.
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