RBA's new 'bribe' storm

THE Reserve Bank of Australia's banknote firm paid multi-million-dollar commissions to a senior Vietnamese official in an apparent breach of federal bribery laws that carry a 10-year jail sentence.

Anh Ngoc Luong received more than $5 million in so-called ''commission'' payments from RBA firm Securency.

Senior Australian Government sources said Mr Luong and his company, CFTD, worked for Vietnam's Ministry of Public Security, one of the communist-run country's premier security and intelligence agencies. One of Mr Luong's partners in CFTD serves in Vietnam's diplomatic mission to the United Nations.

The payments to Mr Luong and CFTD from Securency are believed to total more than $12 million, some of which was sent to secretive offshore bank accounts in Switzerland.

The Commonwealth Criminal Code forbids Australian companies paying foreign officials or government-controlled firms to gain a business advantage.

Securency hired Mr Luong because of his high-level government connections, and he has been Securency's man on the ground and chief government liaison in Vietnam for several years. Since 2002, Mr Luong has played a major role in a deal in which Vietnam switched its currency from paper-based banknotes to those made with Securency's patented polymer formula.

The Australian Federal Police has been investigating Securency, which is half-owned by the RBA, for five months over allegations that it breached foreign bribery laws.

If it can be proven that Securency executives knew or should have known that Mr Luong and his company worked on behalf of the Vietnamese Government, they may face criminal charges.

The revelation of the payments to Mr Luong also raise questions about the conduct of the RBA, whose officials sit on the Securency board and oversee its activities, as well as the conduct of the Australian agencies that work closely with Securency across the globe.

Senior Liberal MP Philip Ruddock said the nation had been put on notice by the inquiry into the Australian Wheat Board bribery scandal in Iraq - which he set up as attorney-general - that payments to foreign officials were illegal.

''After the AWB issues, I would have thought all agencies would be very circumspect of all the activities they are undertaking overseas and make very sure they do not breach Australia's bribery laws … if it [Securency's conduct] did constitute bribery, it would be a very significant issue,'' he said.

''We would not expect our officials to moonlight and receive payments from other governments.''

Australia's former ambassador to Vietnam, Richard Broinowski, said the Securency scandal raised serious questions for the Rudd Government.

''I would have to ask how far the knowledge of this case extends into the senior management of the Reserve Bank, Treasury and therefore into Canberra … into DFAT [Department of Foreign Affairs and Trade],'' Mr Broinowski said.

''Vietnam's Ministry of Public Security is indeed a pretty odious agency, and if they are receiving funding it shows absolutely no moral scruples on the part of this Reserve Bank company.''

Several well-placed Australian Government sources said the Department of Foreign Affairs and Trade had long believed Mr Luong to be a government official and his firm an arm of the Public Security Ministry. One senior source said CFTD's government connections were ''common knowledge'' among Australian embassy officials in Vietnam.

A Securency source said senior company officials had privately claimed that Mr Luong was a senior security official.

Mr Luong is also listed as a director of CFTD's Australian operations, based in Frankston, Melbourne. A second director and shareholder of CFTD's Australian firm is Vietnam's attache to the United Nations and World Trade Organisation in Geneva, Thuong Minh Do.

Securency and the RBA have refused to explain why the payments to Mr Luong and CFTD were so high and sent to offshore accounts, saying it was inappropriate to comment during a police inquiry.

In 2007, when Securency executives were quizzed by an overseas reporter about why their firm was working with CFTD, they stressed the Hanoi company's role was limited mostly to the translation of documents, arranging meetings and airport pick-ups.

''A lot of the [CFTD's] roles in the early stages were to do with interpreting and translating … so that is the primary role they play. So it is the liaison between the state bank,'' Securency managing director Myles Curtis said in the 2007 interview.