Senate debates

Tuesday, 27 October 2009

Committees

Economics References Committee; Reference

5:25 pm

Photo of Bob BrownBob Brown (Tasmania, Australian Greens) Share this | Hansard source

The opposition spokesperson says that he would not follow everything that the parliament of Nigeria does. I would suggest in response to that comment and the way in which it was pitched that I would expect better of the honourable senator opposite. I for one respect what the parliament of Nigeria and its members try to do and try to achieve.

I want to go back to some of the people who have been agents for the Reserve Bank subsidiaries, because I think that if we are not going to have a Senate inquiry we at least should have some public record of what it is that the members of the Senate—the Greens excepted—do not want to have inquired into at this time. One of those agents, according to the Age, is Mr Benoy Berry from Contec Global in London. Securency has paid millions of dollars to this London based businessman who heads a multinational technology firm, Contec Global. The firm has won large contracts across Africa, including in Sudan and Rwanda, but has also been implicated in a corruption inquiry in Uganda. In 2005, Contec Global was accused by Uganda’s internal security organisation of making a bribe of at least $1.8 million to a cabinet minister responsible for a national ID card tender process. In 2006, an inquiry by Uganda’s Inspectorate of Government found the finance minister, Isaac Musumba, favoured Contec Global’s bid even though it did not meet the selection criteria and was by far the most expensive. The office of Uganda’s President alleged Contec Global had promised Musumba a share in money gained from its inflated bid. Musumba has denied any wrongdoing.

Securency has had financial dealings with companies linked to businessman Mr Donald McArthur, who was the head of a major company involved in South Africa’s biggest-ever corporate failure in 1999. In 2005, McArthur was arrested by South African police and charged with racketeering, fraud and corruption and accused of improperly pocketing money borrowed from banks. Last year he did a deal with the prosecutors and pleaded guilty to fraud and reckless trading. He paid a substantial fine instead of serving a two-year jail term. He was also forced to pay money into the proceeds of crime fund. McArthur worked for Vivian Reddy in 2005. McArthur repeatedly denied any association with Securency when contacted by the Age, although Securency has said that he has been an agent. Mr Reddy, referred to there, is a South African casino tycoon who won the rights to promote Securency’s banknotes in Africa a few years ago and has more recently declared that he will push the notes across half the continent within a decade. One of his senior employees said that Mr Reddy’s relationship with Securency was over but would not say when or why due to ‘confidentiality and nondisclosure issues’.

Reddy is a controversial figure in South Africa due to his political connections and his bankrolling of the recently elected president, Jacob Zuma. The magnate was ensnared in the South African government’s aborted corruption trial against Zuma, who was alleged to have accepted a bribe from a French defence contractor seeking to build four ships for South Africa’s navy. In a related corruption case against Zuma’s now jailed former financial adviser, prosecutors alleged that the charitable trust account set up by Reddy was used to hide payments from French defence firm Thales to a company owned by the financial adviser and then to Zuma. Reddy’s lawyer has rejected the claims of corruption made by state prosecutors.

When we go to Cambodia, we find that Melbourne barrister Daryl Dealehr is Securency’s agent and the director of mining company Cambodian Resources Ltd. Dealehr has ties to the families of Cambodia’s late and notorious national police chief Hok Lundy and Cambodia’s controversial Prime Minister, Hun Sen. Human rights groups and former senior Cambodian officials accuse Lundy, who died last year, of being responsible for dozens of murders. ‘There is hardly anyone in Cambodia who has shown more contempt for the arm of the law than Hok Lundy’, Human Rights Watch said.

Dealehr told the Age he was surprised he had not yet landed a banknote deal for Securency but said Cambodia’s reserve bank was conservative and wedded to paper banknotes. Dealehr said that he had been duped and that he had very good contacts with bank officials and had been Securency’s agent for many years. He was unable to speak further about Securency’s affairs due to private causes. In 2007, Dealehr’s mining company won the rights to develop iron ore, gold and so on in Cambodia.

Next door, in Vietnam, in 2002, as Vietnam switched from paper to plastic banknotes, Securency teamed up with Hanoi firm CFTD and its subsidiary Banktech. In early 2002, Banktech’s deputy director was Le Duc Minh, the son of the State Bank of Vietnam’s then governor, Le Duc Thoy, who was in charge of the deal. The bank governor denied his son was involved, but Banktech documents reveal they were the ‘exclusive suppliers’ of bank printing materials for Vietnam. Securency was listed as one of its ‘overseas partners’. In 2007, a Vietnam government inquiry reportedly found irregularities and weakness through the banknote project. It found that the bank governor had failed to include a comparison of the polymer banknotes in his submission to the Prime Minister. The inquiry concluded that the involvement of his son had created a lot of suspicion, affected the transparency of the project and damaged the governor’s reputation. Securency has paid millions of dollars in commissions to CFTD directors who are connected to Vietnam’s political personages.

We can go to many other matters, some of which I have raised before in this place. But, needless to say, when we hear the litany of connections with dodgy dealers, with corrupt officials, with shady persons, with people who have criminal records and with people who are involved in multimillion-dollar international deals, which include money being passed from agencies of the Reserve Bank to offshore tax havens for payment, we have to be very alarmed. This Senate and this parliament have to be very concerned indeed.

I have seen no comeback from the Reserve Bank or its subsidiary which substantially or effectively moves to answer these accusations. This is a case of the fourth estate—in this case, the investigating unit of the Age newspaper—writing front-page stories in relation to dealings of the Reserve Bank’s subsidiaries overseas with very questionable people. It has raised an alarm which the parliament is bound to respond to. I do not accept the argument that because it is a matter now put into the hands of the Australian Federal Police this parliament should not be looking at the probity with which the Reserve Bank board has viewed its subsidiaries. I remind the Senate that the deputy of the Reserve Bank board has been the president, the presiding officer, of one of the subsidiaries I am talking about. It is a matter of very great concern to me, and ought be to every senator, that we have had no response to this matter from the Reserve Bank. I would expect that even this debate ought to give rise to a rejoinder from the Reserve Bank of Australia to this parliament. That would be reasonable and expected on matters as major and concerning as this.

I think the government and the opposition are wrong. I think we are seeing in play here a respect for office—that is, for the Reserve Bank itself—which confuses the behaviour of people who might abuse that respect which the country and the body politic give to the Reserve Bank. The very fact that it is allegedly at arm’s length diminishes not one whit the responsibility of this parliament to ensure that its handling of matters are not only in the best interests of the nation but lawful in this nation and lawful anywhere else in the world. On the face of it, that is not the case with these subsidiaries.

The opposition and the government are in grave danger of preventing the process of clearing the air on these matters of great concern. I think they have made a mistake; nevertheless, these are matters that I will continue to pursue, and they are matters that I have no doubt the Prime Minister himself is very aware of. Inaction at the highest levels of government on this matter is something that may well come back to haunt those who have failed to take action. I do not know of any action that has been taken by the government. I would expect that the Treasurer and the Prime Minister have taken a very close interest in these extraordinary allegations of corruption infecting subsidiaries of the Reserve Bank of Australia. If not then there is something wrong with the way the government has looked at these accusations. If so then I think that the Prime Minister and/or the Treasurer ought to have reported to this parliament.

I have a great sense of unease about the inertia with which the government has greeted the terrible news that is unfolding about the dealings of some of the people that the Reserve Bank subsidiaries have been involved with—and which, we must presume, the people on the board of the Reserve Bank knew about, to some degree, quite some time ago. I know that Securency did a review and stopped certain activities as far back as 2006, but we deserve to know why the parliament was not acquainted with that, why we have not heard of further action since then and why the accusations continue to roll without there being a response from the government. The government should come to the parliament with an explanation as to what it knows about these dealings which have involved members of the board of the Reserve Bank and do what it can in the current circumstances to clear the air.

Question put:

That the motion (Senator Bob Brown’s) be agreed to.

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