A different kind of currency manipulation

"tantamount to counterfeiting"?

"Securency International is the recognised world leader in secure polymer substrate technology and the supplier of a range of unique substrates which are used for the printing of banknotes and other security documents. Formed in 1996, Securency International is a joint venture between the Reserve Bank of Australia (RBA), Australia's central bank, and Innovia Films."

Global raids over RBA scandal

Raids in Melbourne and Europe targeted the homes and offices of figures with alleged links to the payment of millions in bribes by Securency to foreign officials, including senior politicians and banking officials, between the late 1990s and 2009.
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An Australian Federal Police inquiry, codenamed Operation Rune, is investigating allegations bribes were paid by agents or middlemen working for Securency to win contracts to produce polymer notes.

The police inquiry began in May 2009 in response to revelations in the Herald that Securency - half-owned by the RBA - had wired millions of dollars in commissions to offshore bank accounts linked to dubious middlemen, including some previously implicated in corrupt business dealings.

While no charges have been laid in Australia, the raids signal the police are closer to laying criminal charges against serving or former Securency executives in what would be the nation's first foreign bribery prosecution.

There is extreme sensitivity in various government departments about the implications of a wider inquiry into the scandal, with fears further exposure could damage Australia's international relations with several countries that use the company's polymer banknotes.

Any future police prosecution will focus only on whether Securency employees broke foreign bribery laws rather than the broader issues surrounding the conduct of government agencies and the RBA.

The Reserve Bank, which has appointed half of the Securency board - including its chairman - to oversee the firm since 1996, has been accused by former Securency employees and business experts of ignoring red flags that suggested the firm may be engaged in corrupt behaviour.

Since 2008, Securency's chairman has been an RBA assistant governor and before that it was a former RBA deputy governor.

This week, government sources confirmed that among the potentially explosive evidence uncovered by the police were documents suggesting a senior trade official engaged in highly unethical behaviour to help win Securency contracts overseas.

In a separate case involving Austrade, a former Securency employee has previously said a consultant working for the trade agency in Asia encouraged him to ''hand out white envelopes to officials'' in order to win contracts for the RBA firm.

The managing director of Securency, Myles Curtis, and the company secretary, John Ellery, departed this year after a limited audit of Securency commissioned by the RBA found almost $50 million had been paid between 2003 and 2009 to overseas middlemen.

On Monday, it emerged Securency produced millions of partly made banknotes without authorisation from overseas central banks, in a practice described by former staff as being tantamount to counterfeiting.