Search

Editors

Richard L. Cassin Publisher and Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Elizabeth K. Spahn Editor Emeritus

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

Aarti Maharaj Contributing Editor


FCPA Blog Daily News

« These FCPA lists are really hot | Main | Civilian Navy manager jailed 8 years for taking bribes »
Wednesday
Jul302014

Australia clamps ‘embarrassing’ gag order on global banknote bribe case

Wikileaks Tuesday released what it said is "an unprecedented Australian censorship order concerning a multi-million dollar corruption case explicitly naming the current and past heads of state of Indonesia, Malaysia and Vietnam, their relatives and other senior officials."

The gag order follows the secret indictment on June 19, 2014 of seven senior executives from subsidiaries of Australia's central bank, the Reserve Bank of Australia (RBA), Wikileaks said.

The "super-injunction" issued by the Supreme Court of Victoria in Melbourne invokes national security grounds to prevent reporting about the case, by anyone, in order to “prevent damage to Australia's international relations.”

RBA subsidiaries Securency and Note Printing Australia allegedly paid massive bribes to government officials in Malaysia, Indonesia, Vietnam and other countries to win contracts to supply polymer bank notes to those countries.

An affidavit to support the suppression order was filed by Gillian Elizabeth Bird on June 12 this year, according to the order posted by Wikileaks (pdf). Bird was Australia's representative to ASEAN (Association of Southeast Asian Nations) and is now Australia's Permanent Representative to the United Nations.

The gag order prohibits reporting about any person involved in the RBS case who "received or attempted to receive a bribe or improper payment, acquiesced in or was wilfully blind as to any person receiving or attempting to receive a bribe or improper payment, or was the intended or proposed recipient of a bribe or improper payment."

The court ordered Bird's affidavit "to be sealed in an envelope marked 'Not to be opened without an order of the court,' and not be opened without order of the court."

The suppression bans reporting about 17 individuals, including

"any current or former Prime Minister of Malaysia"

“Truong Tan San, currently President of Vietnam"

"Susilo Bambang Yudhoyono (also known as SBY), currently President of Indonesia (since 2004)"

"Megawati Sukarnoputri (also known as Mega), a former President of Indonesia (2001–2004) and current leader of the PDI-P political party"

and 14 other senior officials and relatives from those countries, who specifically may not be named in connection with the corruption investigation.

*     *     *

Wikileaks said Tuesday in a release that "the last known blanket suppression order of this nature was granted in 1995 and concerned the joint U.S.-Australian intelligence spying operation against the Chinese Embassy in Canberra."

WikiLeaks' publisher Julian Assange said the gag order is "the worst in living memory."

He said "the Australian government is not just gagging the Australian press, it is blindfolding the Australian public."

Assange, who's Australian, called the gag order "embarrassing."

This is not simply a question of the Australian government failing to give this international corruption case the public scrutiny it is due. Foreign Minister Julie Bishop must explain why she is threatening every Australian with imprisonment in an attempt to cover up an embarrassing corruption scandal involving the Australian government.

Assange has been living in Ecuador's embassy in London for two years. He's wanted in Sweden for questioning about an alleged sexual assault. He says the charges are politically motivated.

*     *     *

Two years ago, a witness from inside the Reserve Bank of Australia testified to parliamentary investigators that RBA's top executives knew about bribe paying by its banknote subsidiaries and covered it up.

Mark Ingram said early warnings about the overseas graft were ignored and the whistleblowers were fired from their jobs.

He reportedly produced internal emails he had 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, reportedly told police he briefed top RBA officials about the bribery and they told him to never bring up the topic again. He said he was also later fired.

The RBA 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.

Kayum and a former assistant governor of Malaysia’s central bank were arrested and charged with bribery in Malaysia in 2011.

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

The Australian police in 2011 charged several former executives from Securency with bribery in Malaysia, Indonesia, Vietnam, and Nepal.

And British police in 2011 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.

In November 2009, Securency's board reportedly fired or suspended the managing director and the company secretary, and ended marketing activities involving agents.

An audit showed that Securency's agents were paid almost $50 million in commissions between 2003 and 2009.

*     *     *    

In October 2013, the UK Serious Fraud Office charged a specialty printing company and four individuals, including the firm's former chairman, with paying more than £400,000 ($677,000) in bribes in Africa.

Smith & Ouzman Limited, two of its directors, an employee, and an agent were named in the case.

The SFO's investigation of Smith &  Ouzman began in 2010, close to the time the UK launched its investigation of Securency. 

The SFO didn't say if the two cases were connected.

*     *     *

An older U.S. case involved another currency printer -- American Bank Note Holographics.

In 2001, Joshua Cantor, the company's president, pleaded guilty to a four-count federal criminal information. It charged him with conspiracy to defraud the U.S., a books-and-records violation, making false statements to auditors, and conspiracy to violate the Foreign Corrupt Practices Act. The charges arose from bribes in Saudi Arabia.

Cantor has never been sentenced.

*     *     *

In February this year, the former deputy governor of Austria's central bank and eight other defendants went on trial. They're accused of using the banknote-printing subsidiary of the central bank, the Oesterreichischen Nationalbank (OeBS), to pay bribes totalling $19 million to win banknote supply contracts with Syria and Azerbaijan.

___________

Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Reader Comments (3)

Brave writing Richard, a total breach of the order though! Shows how pointless these are. None of us journos in Oz can write anything and you can write this.

Great stuff -- just don't take your holidays in Oz any time soon. This matter goes all the way up the food chain, as the suppression order indicates.
July 30, 2014 | Unregistered CommenterBlogosphere Bill
I have recently been asked to write an academic article on public policy and corruption. Your latest post identifies clearly that anti corruption effectiveness is directly related to public policy in its broader sense, including geopolitical considerations.

The risk any corruption related gagging order creates is to communicate consistently to the public that:

Anti corruption public policy is mandated for most of us but those at the top can ignore it with impunity as long as they can claim "national interest" "security" and other catch all reasons for ignoring or breaking them. BAE comes to mind, in addition to this case;

Laws and regulations are therefore not equally applied to all, hence equity and fairness, the basic principle of law, is a lie;

Corruption expands beyond any specific case to infest other institutions that the public trusts, including academic; A similar case to the one mentioned here is the son of Bo Xi Lai who found similar assistance to some of the UK's best known schools.

Your article also highlights that very little can be gagged anymore in this day and age, which empowers us in ways we didn't imagine. This will hopefully address the problem where policy makers set policies applicable to others but not themselves.

Not sure how I am going to tackle the article on public policy effectiveness and anti corruption efforts, since such academic treatises tend to delve deep into details and ignore one of the principles of governance which is:

Fish rots from the head.

This proverb has been around very long.

I sincerely hope you may therefore continue to expose corruption issues for a very long time, in order for us to achieve some semblance of equity and fairness during our life time. We live in hope.
July 31, 2014 | Unregistered Commenterfbalfour
Hello Richard,

Great article on the odious 'Super-Injunctions' and the inevitable collision of those bizarre Court Orders with the reality of the new information Age. It seems that the Technology will inevitably affect people's mentality, that is the new reality.

Keep on keepin on, Richard!

I do wonder if the Courts in various countries would even disclose just how many 'Super-Injunctions' they grant in a year? It would be an interesting question to ask.

Regards

Afra Raymond
July 31, 2014 | Unregistered CommenterAfra Raymond
Comments for this entry have been disabled. Additional comments may not be added to this entry at this time.