Australian central bank chief to testify in probe into alleged graft

PUBLISHED : Tuesday, 18 September, 2012, 11:41am
UPDATED : Tuesday, 18 September, 2012, 6:36pm


Australia’s central bank chief Glenn Stevens won political backing on Tuesday following reports he will be called to testify to parliament about alleged corruption within the organisation’s subsidiaries.

Fairfax newspapers, which exposed the alleged corruption and bribery, claim there is growing evidence that contradicts Stevens’ previous parliamentary testimony about what he knew.

The scandal involves two note-printing units of the Reserve Bank of Australia (RBA) -- Securency and Note Printing Australia -- and allegations that they paid bribes to win plastic banknote contracts in Asia.

Stevens told an inquiry last month the bank knew nothing about the scandal before it was exposed by Australian media in mid-2009.

But files obtained by The Age reportedly showed that in 2007 RBA assistant governor Frank Campbell was told Securency had inflated a contract to hide a A$492,000 (US$514,000) payment to an allegedly corrupt Malaysian arms dealer.

The Age said the internal records reveal the matter was raised at a Note Printing Australia board meeting in September 2007 at which both Campbell and NPA and Securency chairman Graeme Thompson were present.

The internal RBA documents show the arms dealer’s company also wrote to Campbell to demand other payments, saying “it had convinced the prime minister and the Malaysian cabinet” to award contracts, it said.

The RBA denies it attempted to hide information, saying it cooperated fully with legal authorities.
In testimony to a committal hearing of several former Securency and NPA executives facing bribery charges Monday, the man who blew the whistle, former RBA banknote executive Brian Hood, reportedly claimed he was threatened and harassed after raising his concerns.

Stevens, Hood and former RBA deputy Ric Battellino will now testify on October 4 before a parliamentary committee examining Commonwealth agencies’ exposure to overseas corruption, Fairfax said.

Despite the escalating scandal, Stevens retains the backing of both sides of politics with Trade Minister Craig Emerson Tuesday pledging the government’s ”utmost support” for him.
Senior opposition figure Greg Hunt also expressed confidence in the central bank governor.

“I have the absolute highest regard for Glenn Stevens and the senior executive at the RBA,” he said.