Tag Archives: securency

ASIC Begs The Question On RBA Scandal

3 Oct

ASIC is in full ‘fire control’ mode, as a result of its astonishing failure — begging the question of complicity — in the RBA corruption scandal.

But it seems many just aren’t buying their lines:

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RBA “A Culture Of Systemic Lying And Greed”

1 Oct

Cross-posted from Macro Business:

It is one of the more weird characteristics of Australian economic commentary that the Reserve Bank of Australia enjoys an untouchable position. Bank economists and economic observers all hold the central bank in very high esteem, to the point where it is borderline criminal to question the monetary authority.

The reason for this is pretty straight forward. The world of employed economists in Australia is very small and you don’t want to be marked as a trouble maker if you intend, as many do, to move between public and private offices over your career.

Which brings me to last night’s Four Corners episode that recounts the allegedly corrupt histories of the RBA subsidiaries, Securency and Note Printing Australia, as well as at the bank itself.

If you missed the program I suggest you set aside 45 minutes to watch it in the near future. It is here. I’ve been aware of most of the allegations for years but to see the entire story told from beginning to end is really something else. It is shocking.

The program describes a culture of systemic lying and greed, of economics without ethics, of total failures of governance, of group think and entitlement throughout the elite levels of the RBA’s subsidiaries and perhaps at the bank as well. I have had my faith in the institution shattered and only a full and open inquiry has any hope of restoring it.

I have no idea if anything will come of the investigation. Probably not. But the stain upon the Reserve Bank of Australia will thus be all the more indelible.

Good.

It is this blogger’s fervent hope that this scandal will prompt many more people to begin to ask questions about the RBA.

Leading, most importantly, to the question of why we permit it to exist at all.

Crooked As A Dog’s Hind Leg

30 Sep

Whether this particular accusation proves true or not, any additional scrutiny placed on the (many, secretive) actions of the central bank is very, very good news.

From the Australian:

Probe Reserve Bank ‘dirty deals’ with Saddam Hussein, Greens urge

THE Greens are escalating calls for a full judicial inquiry with the powers of a Royal Commission to probe allegations of dirty deals at the Reserve Bank and its subsidiaries.

The Reserve Bank is facing allegations it used a front man to liaise with the brother-in-law of Iraqi dictator Suddam Hussein in a bid to sell plastic banknotes to the country at the height of the United Nations-imposed sanctions.

Deputy Greens leader Adam Bandt today called on the Abbott government to establish an inquiry that has the same powers to investigate the allegations as the probe into the Australian Wheat Board scandal.

“Most Australians would be shocked to know their central bank has been using their money to line up dirty deals with Suddam Hussein,” Mr Bandt said.

“The stench surrounding the Reserve Bank and its subsidiaries is now so strong that only a full independent judicial inquiry will clear the air.”

A joint Fairfax/ABC investigation into the Reserve Bank and its two polymer banknote firms, Note Printing Australia and Securency, has also alleged the Australian Securities and Investment Commission failed to investigate allegations of corruption, and reported claims by whistle-blower and former NPA executive Brian Hood that publicly challenge RBA governor Glenn Stevens’ parliamentary testimony about the scandal.

“The claim that RBA officials misled Parliament is disturbing,” Mr Bandt said.

“When Parliament resumes, the Greens will move to have RBA officials appear before a parliamentary committee to answer these serious allegations.”

Mr Bandt said the failure of the corporate watchdog to investigate claims of sustained wrongdoing at the Reserve Bank was appalling.

“It seems ASIC, our corporate regulator, was asleep at the wheel.”

“ASIC throws the book at a lone global warming activist who sends out a press release, yet turns a blind eye to repeated claims of sustained corporate corruption in the Reserve Bank.”

“Asleep” at the wheel?

Sure.

Try again.

How about, “happily along for the ride”.

UPDATE:

Yep. Crooked as a dog’s hind leg.

From the Australian Financial Review:

A Reserve Bank of Australia subsidiary used a frontman to liaise with Saddam ­Hussein’s brother-in-law in an illegal effort to supply plastic bank notes to the Iraqi government while it was subject to United Nations sanctions, according to confidential RBA files.

Two whistle-blowers who became police witnesses in the Reserve Bank-note bribery scandal have also broken their silence about the failure of the Australian Securities and Investments Commission to investigate the directors of two allegedly corrupt RBA ­companies, Note Printing Australia and Securency.

In 2011, Securency and Note Printing were charged by the federal police with bribery offences related to alleged payments to overseas officials. Court orders prevent recent developments regarding the charges against the companies from being reported.

The companies’ former directors, who were appointed by the Reserve Bank, have never been investigated for allowing corruption-prone business practices to flourish for 10 years.

A whistle-blower and former top NPA executive, Brian Hood, also challenged Reserve Bank governor Glenn Stevens’s parliamentary testimony about the scandal from 2010 to 2012, which he said “wasn’t the truth”.

Mr Hood claimed the long-standing chairman and ex-RBA deputy governor, Graeme Thompson, and other directors, including former NPA director Mark Bethwaite and former RBA board member Dick Warburton, agreed to conceal from Nepali authorities secret commissions NPA paid to an agent in Nepal for help winning polymer bank-note contracts.

Confidential bank documents reveal that in May 1998, NPA launched a secret project code-named Delta to secure $80 million that Iraqi President Hussein had “already allocated” to buy Australian plastic note technology.

Reserve Bank officials working for NPA said the funds could potentially be accessed by funnelling the money through a Jordanian bank “with the green light of SH [Saddam Hussein]”.

A frontman was used by Reserve Bank officials to cover up NPA’s decision to use a notoriously corrupt middleman, Saddam’s brother-in-law and bodyguard, Arshad Yassin, as a facilitator to sell notes to the Iraqi regime.

A legal expert and Sydney University associate professor, David Chaikin, who reviewed the Project Delta files for Fairfax Media, said they showed a “very strong prima facie” case that RBA officials involved in the Iraq trip breached UN sanction 661, which banned ­Australians from engaging in any business dealings “which promote or are calculated to promote” the sale or supply of any goods to Iraq.

When Project Delta was launched, the Reserve Bank was responsible for upholding the sanctions. The project was known to top RBA bank-note officials, including Mr Bethwaite.

A Project Delta file faxed to Mr Bethwaite in 1998 states that Arshad Yassin’s involvement in the secret deal was “critical as all decisions on this project will be taken by SH [Saddam Hussein].”

Project Delta was stopped in ­September 1998, after a senior Australian diplomat, John Hines, from the Department of Foreign Affairs Middle East branch, learned of it and wrote a furious letter to NPA warning that its “informal meeting with Saddam Hussein’s brother-in-law may have already breached Australia’s obligations in international law”. He complained NPA had ignored repeated requests to provide details to the government about its plans in Iraq.

The fact that an RBA representative travelled to Iraq using “an Australian Official Passport . . . only adds to the potential for embarrassment to the government,” Mr Hines wrote.

Project Delta was never made public because Mr Bethwaite and other NPA directors kept it secret in 1998 and, again, in 2009, when the corruption allegations involving NPA and Securency were first aired in the media.

Rather than stopping all high-risk business practices when Project Delta was wound down in 1998, NPA and Securency directors embraced bribery-prone activities, including paying ­foreign agents huge sums for convincing overseas officials to give contracts to the RBA’s banknote companies.

ASIC and the Australian Federal Police have never investigated the former directors of the two firms for overseeing the high-risk practices.

Under Australian corporate law, directors must act with care and diligence to ensure the firm they oversee does not engage in corruption.

ASIC, which decided in 2012 not to conduct a formal inquiry, has not interviewed a single witness or suspect.

ASIC made the decision after reviewing documents gathered by the Federal Police probe even though the AFP bribery inquiry never investigated directors for alleged corporate offences.

A Fairfax Media-Four Corners investigation has found allegedly corrupt practices spread, with the knowledge of some directors, many years before Mr Hood and a second whistleblower, James Shelton, raised concerns that led to police charging the two Reserve Bank companies with bribery in 2011.

In his first public interview, Mr Hood, a former NPA company secretary, said some former directors allowed highly risky business practices to occur and covered up suspected corruption.

One example cited by Mr Hood involved Mr Thompson ordering NPA to wire $400,000 in 2007 to a Malaysian arms dealer who was helping the firm to win bank note contracts and who had already been paid more than $2.5 million.

The money was sent despite Mr Hood’s pleas not to pay the suspected arms dealer because he was suspected of being corrupt.

Mr Hood said that he was “gobsmacked” by Mr Thompson’s conduct because it so clearly exposed the Reserve Bank firm to possible bribery.

Even after this arms dealer was sacked, Mr Thompson and other directors approved further payments to him in return for his lobbying of Malaysian officials.

In 2011, Malaysian authorities charged the arms dealer with using NPA funds to allegedly pay bribes.

Mr Hood said: “The inaction by ASIC has been astounding. The parent organisation [the Reserve Bank] and the boards of directors have all got their responsibilities. Clearly there has been failings . . . and they should be investigated,” said Mr Hood, who was the NPA’s company secretary between 2004 and 2008.

Mr Shelton, who was a sales manager at Securency in 2007 and 2008, said: “The board is responsible for corporate governance and is ultimately responsible for the company. They [directors] would have known there were very large deals being done in very corrupt places. They put in an anti-corruption program that was fundamentally flawed by any assessment.”

ASIC has defended its refusal to ­conduct a formal probe or interview a single witness or suspect, saying that it decided not to do so after assessing a large number of documents gathered by the Federal Police.

Mr Hood attacked Mr Stevens for testifying before Parliament that the first the RBA knew of corruption allegations involving Securency was when they were aired in 2009.

Mr Hood said that he told the RBA in writing and in a verbal briefing in 2007 that Securency and NPA were exposed to alleged corruption.

The Reserve Bank owns all of Note Printing Australia. It sold its half share in Securency this year. The RBA, Mr Thompson, Mr Bethwaite and Mr Warburton declined to answer questions.

More Proof That RBA Governor Stevens Is A Liar

6 Oct

RBA Governor Glenn Stevens is a frequent target for criticism here:

Stevens’ Nonchalance ‘Stunning’

Stevens: ‘Risk Of Serious Contraction’ Passed

Stevens’ Australia’s Most Useless?

And the RBA more generally is also a favourite target:

RBA Officials Have A Vested Interest In The Fate Of Aussie Real Estate

Our Banking System Operates With Zero Reserves

RBA Says Our Banks Are Stuffed … In Other Words

In our most recent flame on the RBA Governor ( “Final Proof That RBA Governor Glenn Stevens Is Either A Liar, Or A Blithering Idiot” ), we saw how Stevens lied about economists failing to predict the GFC. In a speech at a fancy dinner, at the peak of the GFC. While celebrating his $234,000 p.a. pay rise.

Now, we learn that Stevens lied about RBA officials’ knowledge of corruption in their own ranks.

From The Age:

Some of the Reserve Bank of Australia’s most senior officials were involved in covering up extensive evidence of corruption inside the central bank’s subsidiaries, Note Printing Australia and Securency.

An investigation by The Age has found top RBA officials suppressed damaging information in 2007 and 2008 about the payment of secret commissions to middlemen hired by the RBA firms to win banknote contracts in Nepal and Malaysia.

Among the officials who knew of the serious corruption concerns are deputy governor Ric Battellino, former deputy governor Graeme Thompson and former Note Printing Australia boss Chris Ogilvy…

The evidence of the cover-ups is contained in internal documents from the RBA and the banknote firms, including many seized by the federal police after executing search warrants.

The documents challenge RBA governor Glenn Stevens’s statement to a federal parliamentary committee in February that ”no one in the Reserve Bank or on our board” knew of corruption allegations involving Securency and NPA before The Age revealed them in May 2009.

And we the taxpayers are (given no choice in) paying this bloke over $1 million per annum.

I’ve said it before.

It bears repeating.

Abolish. The. RBA.

h/t Twitter user MsMonneypenny

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