Malaysian police grill RBA contact

securency scandal

(The Age) THE police inquiry into alleged bribery by Reserve Bank of Australia subsidiaries has had a major breakthrough, with an overseas witness providing details about alleged kickbacks to Malaysian officials.

The middleman was paid the money to help the RBA firms win currency supply and printing contracts from Malaysia’s central bank due to his claimed high-level connections in the country’s ruling UMNO political party.

A Malaysian businessman has been interviewed by anti-corruption authorities in Kuala Lumpur about his work as a middleman for RBA banknote firms Securency and Note Printing Australia between the late 1990s and 2007.

Intelligence from the interviews has been sent to the Australian Federal Police taskforce investigating whether executives of the two RBA subsidiaries breached anti-bribery laws due to their knowledge of payments made to foreign officials to help win banknote supply and printing contracts.

The RBA owns half of Securency and all of Note Printing Australia. RBA-appointed directors are responsible for supervising the firms, including during the period in which the alleged corruption occurred.

A source aware of the work of Malaysian anti-corruption authorities said the middleman provided details about the $4 million in commissions he received from Securency and Note Printing Australia.

The middleman was paid the money to help the RBA firms win currency supply and printing contracts from Malaysia’s central bank due to his claimed high-level connections in the country’s ruling UMNO political party.

He has also been a broker for a Pakistani government weapons-making factory.

It is believed that at least one person closely connected with a senior Malaysian government official received kickbacks from the commissions paid by the RBA firms.

The developments in Malaysia strengthen indications that the AFP probe could lead to Australia’s first prosecution for bribery of an overseas official under changes to the Commonwealth Criminal Code in 1999.

The Age reported last month that the Commonwealth Director of Public Prosecutions had been asked to consider whether the AFP had sufficient evidence to lay criminal charges in the case.

AFP Commissioner Tony Negus recently met a senior official from Malaysia’s anti-corruption commission and the pair are believed to have discussed the Securency investigation.

Senior Deputy Commissioner of the Malaysian anti-corruption commission, Han Chee Rull, said earlier this year that his agency would assist the federal police.

”If the Australian police should provide us with information that certain Malaysians are involved in corruption offences in Australia, the MACC can conduct an investigation, even though the offence has taken place in Australia,” he said.

”If the Australian authorities make a request to the Malaysian authorities to gather evidence or to assist in forfeiture of property, seizure of property in Malaysia, we can also assist.”

Securency has been under AFP investigation since May last year, after The Age revealed its large payments to foreign middlemen implicated in past corruption scandals.

The AFP is investigating Securency for allegedly bribing officials in countries including Nigeria, Malaysia and Vietnam, where it paid millions of dollars to well-connected middlemen after being awarded banknote supply contracts.

The payments were often made into secretive offshore tax havens such as the Seychelles and Switzerland.

Under Australian law, it is a criminal offence for companies or individuals to pay foreign officials in order to obtain a business advantage. The offence carries a maximum 10-year jail term and substantial fines.

An external audit by the RBA in March found Securency paid $47.5 million in commissions to its network of agents between January 2003 and January last year.

Securency’s long-serving managing director, Myles Curtis, and company secretary John Ellery left in March.

Both had their houses raided by the AFP last year.

They deny any wrongdoing.

Securency and NPA had been strongly supported by ministers in the Rudd and Howard governments.

Labor and the Coalition have repeatedly rejected motions by Greens and independent senators for a Senate inquiry into the scandal.