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Friday
Sep142012

Witnesses: Australia Reserve Bank bosses covered up bribery for years

There was explosive testimony this week during parliamentary hearings into bribery allegations against a unit of the Reserve Bank of Australia.

RBA subsidiary Securency allegedly paid bribes in Asia, Latin America, and Africa to win currency printing contracts, according to a former salesman for Securency and its sister company Note Printing Australia.

Mark Ingram told Australian parliamentary investigators that RBA’s top executives not only knew but kept quiet about bribe-giving by its subsidiaries. Early warnings about overseas graft were ignored, he said, and the whistleblowers fired from their jobs.

Ingram produced an e-mail he sent highlighting his concerns that bribes had been paid in Nigeria and India. He said he was fired and no investigation was ever launched.

Another witness, Brian Hood, told police he briefed top RBA officials about the bribery and they told him to never bring up the topic again. He was also later fired.

The parliamentary hearings are exposing a culture of bribery and shady dealings within RBA and its subsidiaries. The companies allegedly bankrolled Abdul Kayum, an arms dealer based in Malaysia, giving him oversized commissions in return for help securing contracts.

Kayum was allegedly paid even after the RBA companies fired him because of corruption concerns.

Despite RBA’s denials that it knew what was happening, correspondence to and from Kayum openly referred the bribe-giving.

Kayum and a former assistant governor of Malaysia’s central bank were arrested and charged with bribery in Malaysia last year.

RBA Governor Glenn Stevens is currently the focus of the parliamentary hearings in Australia.

In 2009, the Central Bank of Nigeria began investigating whether Securency bribed Nigerian officials in return for a banknote supply contract.

The Australian police last year charged several former executives from Securency with bribery in Malaysia, Indonesia, Vietnam, and Nepal.

A year ago, British police arrested a U.K. businessman who allegedly paid for the son of a Vietnamese state bank governor to attend Durham University in exchange for a banknote printing deal with Securency.

___________________

Melanie Lansakara is a researcher for the FCPA Blog members area.

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