Rumblings From Oz
Wednesday, May 26, 2010 at 7:08AM
Richard L. Cassin in Australia, Malaysia, Nigeria, Securency

A month ago we asked what's wrong in Australia. Despite multiple overseas bribery scandals, there's been no sign of enforcement activity by the Australian Securities & Investments Commission -- the chief anti-corruption agency -- or anyone else down under. That's now changing.

The Australian federal police are digging into allegations about Securency, the polymer banknote-maker half owned by the Reserve Bank of Australia. There have been persistent rumors that it paid bribes and offered favors to win contracts in Asia, Africa and Latin America. 

Now the federal police reportedly have a witness from the inside. According to a report in The Age:

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. 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."

We'd heard an unconfirmed report about a small group from the Australian federal police traveling recently to Washington to meet with the DOJ's FCPA team. Whether that visit, if it happened, and the recent developments in the Securency case are related, we don't know. It's also unclear whether the federal police investigation will spur the Australian Securities & Investments Commission into action. The police are also reported to be working directly with the Malaysian Anti-Corruption Commission on the Securency investigation.

In March, the Securency board released an audit showing agents had been paid almost $50 million in commissions since 2003. After the audit's release, according to The Age, two top executives left the company.

The press said former Malaysian deputy prime minister, now opposition leader Anwar Ibrahim, and Nigerian central bank governor Lamido Sanusi, have urged the Australian government to provide details about "how far the [Reserve Bank of Australia's] bribery scandal reaches. 'How could Securency allow . . . huge bribes in the name of commissions?' Mr Ibrahim said."

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