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Feds raid homes of Reserve Bank Execs
by Richard Baker and Nick McKenzie via finch - SMH Friday, Nov 20 2009, 6:35am
national / injustice/law / other press

Oz not immune to criminal Banksters

FEDERAL police have raided the homes of executives from a Reserve Bank of Australia company as part of an international bribery investigation.

Warrants were executed on Thursday to search the Mont Albert North home of Securency managing director Myles Curtis and the Roxburgh Park home of company secretary John Ellery. Australian Federal Police officers also executed a search warrant on the Melbourne headquarters of the RBA polymer banknote firm on Thursday.

An AFP spokeswoman last night said no charges had been laid as yet nor had anyone been questioned.

An emergency meeting of Securency's board, which is chaired by RBA assistant governor Bob Rankin, last night resolved to stand down Mr Curtis and Mr Ellery while the police inquiry continued.

The board has also ordered Securency to immediately suspend all overseas marketing activities involving foreign agents and has asked external auditor KPMG to conduct a case-by-base review of the company's agreements with agents.

The Age can also reveal that Britain's Serious Fraud Office has become involved in the investigation. Two of Securency's leading sales executives conduct much of their work from England.

Securency, which is half-owned and supervised by the RBA, makes polymer material used to print money in Australia and 28 other countries.

The AFP has been investigating the company since May for allegedly bribing foreign government officials to secure banknote supply contracts in countries such as Vietnam, Nigeria and Malaysia. The investigation has centred on a series of multimillion-dollar payments by Securency to politically connected middlemen or agents hired to help it win contracts.

In a statement released last night, the Securency board revealed KPMG auditors had discovered that concerns about the company's payments to middlemen were raised by a staff member in 2007.

The statement said Securency management investigated the claim and took no action.

Securency management did not disclose the complaint to the Securency board or the RBA. ''The [Securency] board's view is that such non-disclosure by company management is unacceptable,'' the statement said.

Under Australia's criminal code, it is an offence to pay a foreign government official in order to obtain a business advantage. Jail terms of up to 10 years and hefty fines apply to those convicted of foreign bribery offences.

If police charge Securency and its executives, it will be Australia's first prosecution for foreign bribery offences.

The RBA called in the federal police after The Age in May revealed Securency's payment of commissions to middlemen. Many of these men had been implicated in previous corruption scandals and one was a convicted white collar criminal.

In an apparent breach of RBA policy, Securency paid millions of dollars into tax haven bank accounts linked to the foreign middlemen.

In 2007, the RBA ordered its sister company, Note Printing Australia, to sack its network of foreign agents after an audit confirmed integrity fears. However, the RBA allowed Securency to continue paying millions of dollars to middlemen to help win contracts.

Securency's biggest contracts have come from Vietnam and Nigeria.

The RBA last night released a statement endorsing the actions of the Securency board.

© 2009 Fairfax Digital

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COMMENTS

Executives stood down over banknote scandal
by Alison Caldwell via reed - ABC (Oz) Friday, Nov 20 2009, 6:29pm

The board of the Reserve Bank subsidiary Securency International has stood down its managing director and company secretary amid federal police investigations into alleged corruption.

The board says marketing activities involving the company's agents will be suspended.

Australian Federal Police raided offices and homes of Securency's Melbourne-based executives yesterday as part of its investigations into allegations the company breached federal bribery laws.

Police seized computers and files in the raids.

The Reserve Bank says it endorses the actions taken by the Securency board.

In a statement released last night, Securency chairman and Reserve Bank assistant governor Robert Rankin says an internal investigation into similar allegations was conducted in 2007 and came to nothing.

"An internal investigation by company management at the time concluded that no actions were required," Mr Rankin said.

"None of this information was communicated to Securency's board, nor was it made available to the Reserve Bank of Australia's auditors.

"The board's view is that such non-disclosure by company management is unacceptable."

Britain's Serious Fraud Office, meanwhile, is also investigating corruption allegations involving Securency.

Its investigation is focusing on the company's British executives, including its global sales director.

The developments follow the news of the Melbourne Securency police raids.

Greens Senator Bob Brown has been pressing for a Senate inquiry into the allegations.

"The fact that the federal police are making raids of senior offices from Securency must trouble the body politic," he said.

"I think it's high time the Government and the Opposition were more active, because the case has the potential to bring Australia, and by inference, people in senior positions in the Reserve Bank into international disrepute, and that's damaging."

Plastic banknote deal

Half-owned by Australia's central bank, Securency makes plastic banknotes, and it has been a lucrative export business opportunity for the Reserve Bank.

The patented polymer material, which is used in Australian banknotes, is used in 27 other countries including Malaysia, Vietnam and Brazil.

The concern surrounds exactly what Securency's agents did to convince foreign governments to switch from paper notes to the revolutionary plastic banknotes.

It is alleged Securency paid foreign businessmen, often government officials, millions of dollars in commissions in its drive to win banknote printing deals.

In one case it is claimed Securency paid a Vietnamese official $12 million, some of which was wired to offshore bank accounts in Switzerland.

It is illegal for Australian companies to pay foreign officials or government-controlled entities to gain a business advantage.

If it can be proven that Securency executives knew or should have known they were dealing with businessmen working on behalf of foreign governments, they may face criminal charges that carry a 10-year jail sentence.

© 2009 ABC

http://www.abc.net.au/news/stories/2009/11/21/2749558.htm