Banknote bribes scandal deepens

AUSTRALIA’S first foreign bribery prosecution will accuse two Reserve Bank currency firms and six of their former senior managers of funnelling multi million-dollar bribes to high-ranking government officials in Indonesia, Malaysia and Vietnam to win bank-note deals.

Police in Australia, Asia and Europe expect to lay further criminal charges and expose corrupt foreign politicians after yesterday charging with bribery Securency and Note Printing Australia, plastic-banknote design and printing firms that are respectively half and fully owned and overseen by the Reserve.

An international corruption taskforce led by the federal police is still working to uncover up to $25 million more in suspected bribes paid by the Reserve firms in Asia and Africa since 1999 and as recently as 18 months ago. The federal police inquiry began after a report in the Herald in May 2009 revealed Securency’s multimillion-dollar payments to shady middlemen.

The Greens leader, Bob Brown, has called for the corporate watchdog to examine the conduct of the former boards of both companies – including former Reserve bosses and several corporate heavyweights – and Austrade, the federal trade agency, is likely to come under scrutiny over its involvement.

Those charged yesterday with bribery offences that carry penalties of up to 10 years’ jail include the former Securency chief executive Myles Curtis, and the former Note Printing Australia chief executive John Leckenby.

The charges relate to up to $10 million in bribes allegedly paid between 1999 and 2005. The alleged kickback recipients include the former Indonesian central bank currency chief Herman Joseph Susmanto and the former Vietnam State Bank governor Le Duc Thuy, whom Securency allegedly bribed in 2003 by paying for his son’s fees at Durham University in Britain.

A former assistant governor of the Malaysian central bank, Mohamed Daud Dol Moin, faces up to 20 years’ jail after he was charged for taking kickbacks in late 2004 and early 2005. The federal police commander, Chris McDevitt, warned of more arrests.

Curtis, Securency’s chief executive between 1996 and 2010, faces three conspiracy-to-bribe charges in relation to deals in Indonesia, Vietnam and Malaysia. Leckenby faces two charges in relation to alleged kickbacks in Indonesia and Malaysia. A former chief financial officer at Securency, Mitchell Anderson, faces two counts of bribery. Those facing a single charge are the former chief financial officer of Note Printing Peter Hutchinson, a former Securency Asian sales chief, Ron Marchant, and a former NPA sales manager, Barry Brady.

Those named as co-conspirators but not yet charged are a former NPA sales executive, Christian Boillot, Securency’s international marketing boss, Hugh Brown and its Asian middlemen Radius Christanto and Abdul Kayum.

Commander McDevitt said the charging of the companies was based on allegations the firm’s ”mind and will” was directed towards bribery and that the firms corruptly obtained contracts.

Between 1999 and 2005, both Reserve firms were chaired by the former deputy governor of the Reserve Graeme Thompson, who is also a former chief of the corporate watchdog Australian Prudential Regulation Authority.

Commander McDevitt said there was no evidence to suggest individual board members were aware of or involved in the alleged bribes. He would not be drawn on whether the directors of Securency and NPA had appropriately fulfilled their duties to supervise the companies.

The directors beneath Thompson on the NPA board in this time were the former Reserve assistant governor Leslie Austin, the corporate heavyweight and federal government adviser Dick Warburton, who is also a former Reserve board member, and a former Liberal Party treasurer, Mark Bethwaite.

Thompson, Austin – who resigned from the board last month – and the British businessperson Bill Lowther are among the directors who oversaw Securency during the period of the alleged offences.

The Reserve governor, Glenn Stevens, yesterday said the operations of both accused firms had been reformed and expressed regret at the central bank’s failure to detect the allegedly corrupt practices.

”The Reserve Bank deeply regrets that the governance arrangements and processes in the companies at that time were not able to prevent or detect the alleged behaviour that has led to today’s charges,” he said.

http://www.smh.com.au/national/bank-bribes-more-arrests-imminent-20110701-1gv6q.html