RBA firms agreed to pay bribes of $US1.3m

RBA firm under bribery investigation

Securency International, a company half-owned by the RBA, is under investigation by the Federal Police for bribing officials in Asia and Africa.

RESERVE Bank currency firms agreed to pay $US1.3 million in bribes to Indonesian central bank officials to win a contract and rig future tenders.

Confidential faxes from a Jakarta businessman to Securency International and Note Printing Australia executives reveal plans to reward senior Bank Indonesia officials - often described as ''our friends'' - with huge ''unofficial payments'' and ''commissions''.

Radius Christanto, who represented the RBA firms in Indonesia between 1999 and 2006, explicitly referred to large bribes to Bank Indonesia officials in a fax sent to a Securency executive on July 1, 1999.

''Please kindly understand my difficult position because it involves a very huge amount of money which have been committed to our friends,'' he advised.

Mr Christanto's correspondence - which does not include responses from the RBA firms - provides an insight into the backroom dealings that helped win a 1999 contract to print 500 million 100,000-rupiah banknotes for Bank Indonesia. The contract was worth more than $US50 million to the RBA firms.

The revelation of the RBA firms' Indonesian dealings comes after an Age/ABC Four Corners investigation yesterday disclosed claims by a former Securency employee that he was asked to pay bribes and procure prostitutes for foreign central bank officials.

The disclosure that the RBA firms paid, or at least discussed paying, bribes to Indonesian central bank officials is likely to force the Australian Federal Police to expand its investigation to include Indonesia.

So far, the AFP investigation has focused on Securency's payments of more than $A20 million in commissions to politically connected middlemen used to win currency printing contracts in Vietnam, Nigeria and Malaysia between 2003 and 2006.

According to Mr Christanto's correspondence, he was to receive a $US3.65 million commission from Securency/NPA in a Singapore bank account after he helped win the 1999 Bank Indonesia contract.

His faxes also indicate two figures, ''Mr S'' and ''Mr M'', were to receive $US1.3 million in payments from the RBA firms. The Age believes Mr S and Mr M were senior Bank Indonesia officials who played key roles in awarding the RBA firms the contract.

It is not known what amount of money the RBA firms actually paid Mr Christanto and the other men. However, sources aware of the RBA firms' dealings in Indonesia described the commissions paid as ''indefensible''.

Mr Christanto's correspondence with the RBA firms also reveals:

• Collusion between Bank Indonesia officials, Mr Christanto and RBA banknote executives to ''mark up'' the Securency/NPA bid for the rupiah banknote contract by 20 per cent with an agreement that it would then be reduced to a 10 per cent mark-up.
• A plan by Bank Indonesia officials, Mr Christanto and senior RBA banknote figures to rig future tenders to prevent rival companies from winning contracts in return for further payments.
• An agreement by the RBA firms to pay a $US344,000 penalty for the late delivery of banknotes, with executives told the money was likely to be split into ''official'' and ''unofficial'' amounts by Bank Indonesia officials.

Mr Christanto's correspondence mentions up to 10 serving and former Securency and NPA executives, including Securency's global sales manager, Hugh Brown, and recently departed managing director Myles Curtis.

Securency is half-owned by the RBA and makes polymer substrate for banknotes used in nearly 30 countries. NPA is wholly owned by the RBA and prints Australia's polymer currency. Both are chaired by assistant RBA governor Bob Rankin. At the time of the Indonesia dealings, the firms were headed by former RBA deputy governor Graeme Thompson.

It became a criminal offence in late 1999 for Australian companies to pay foreign officials in order to obtain a business advantage. Some of the dealings between the RBA firms and Mr Christanto - who remained in contact with Securency executives until at least 2006 - occurred before the law was changed to ban payments.

Nevertheless, Mr Christanto's correspondence indicates several Bank Indonesia officials had an interest in the RBA firms' rates of commission. In a November 11, 1999, fax to Securency, Mr Christanto referred to a meeting with three high-ranking Bank Indonesia officials who wanted to know what rates of commission would be paid if the company won further contracts. Mr Christanto referred to Securency's commitment to match the commission rates paid for its first Bank Indonesia contract and added that he had ''offered same commitment to our V.I.P friends''.

''As you know there are some reorganisation from time to time, our friends do not feel secured by being high-ranking officers, they realise they can not hold the same position forever. They did ask the big amount up front,'' he advised a Securency executive.

Dr Rankin declined to answer questions about the Indonesia dealings, citing the police inquiry. Mr Christanto did not respond to inquiries from The Age. ( theage.com.au )

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