UPDATE:

Yep. Crooked as a dog’s hind leg.

From the Australian Financial Review:

A Reserve Bank of Australia subsidiary used a frontman to liaise with Saddam ­Hussein’s brother-in-law in an illegal effort to supply plastic bank notes to the Iraqi government while it was subject to United Nations sanctions, according to confidential RBA files.

Two whistle-blowers who became police witnesses in the Reserve Bank-note bribery scandal have also broken their silence about the failure of the Australian Securities and Investments Commission to investigate the directors of two allegedly corrupt RBA ­companies, Note Printing Australia and Securency.

In 2011, Securency and Note Printing were charged by the federal police with bribery offences related to alleged payments to overseas officials. Court orders prevent recent developments regarding the charges against the companies from being reported.

The companies’ former directors, who were appointed by the Reserve Bank, have never been investigated for allowing corruption-prone business practices to flourish for 10 years.

A whistle-blower and former top NPA executive, Brian Hood, also challenged Reserve Bank governor Glenn Stevens’s parliamentary testimony about the scandal from 2010 to 2012, which he said “wasn’t the truth”.

Mr Hood claimed the long-standing chairman and ex-RBA deputy governor, Graeme Thompson, and other directors, including former NPA director Mark Bethwaite and former RBA board member Dick Warburton, agreed to conceal from Nepali authorities secret commissions NPA paid to an agent in Nepal for help winning polymer bank-note contracts.

Confidential bank documents reveal that in May 1998, NPA launched a secret project code-named Delta to secure $80 million that Iraqi President Hussein had “already allocated” to buy Australian plastic note technology.

Reserve Bank officials working for NPA said the funds could potentially be accessed by funnelling the money through a Jordanian bank “with the green light of SH [Saddam Hussein]”.

A frontman was used by Reserve Bank officials to cover up NPA’s decision to use a notoriously corrupt middleman, Saddam’s brother-in-law and bodyguard, Arshad Yassin, as a facilitator to sell notes to the Iraqi regime.

A legal expert and Sydney University associate professor, David Chaikin, who reviewed the Project Delta files for Fairfax Media, said they showed a “very strong prima facie” case that RBA officials involved in the Iraq trip breached UN sanction 661, which banned ­Australians from engaging in any business dealings “which promote or are calculated to promote” the sale or supply of any goods to Iraq.

When Project Delta was launched, the Reserve Bank was responsible for upholding the sanctions. The project was known to top RBA bank-note officials, including Mr Bethwaite.

A Project Delta file faxed to Mr Bethwaite in 1998 states that Arshad Yassin’s involvement in the secret deal was “critical as all decisions on this project will be taken by SH [Saddam Hussein].”

Project Delta was stopped in ­September 1998, after a senior Australian diplomat, John Hines, from the Department of Foreign Affairs Middle East branch, learned of it and wrote a furious letter to NPA warning that its “informal meeting with Saddam Hussein’s brother-in-law may have already breached Australia’s obligations in international law”. He complained NPA had ignored repeated requests to provide details to the government about its plans in Iraq.

The fact that an RBA representative travelled to Iraq using “an Australian Official Passport . . . only adds to the potential for embarrassment to the government,” Mr Hines wrote.

Project Delta was never made public because Mr Bethwaite and other NPA directors kept it secret in 1998 and, again, in 2009, when the corruption allegations involving NPA and Securency were first aired in the media.

Rather than stopping all high-risk business practices when Project Delta was wound down in 1998, NPA and Securency directors embraced bribery-prone activities, including paying ­foreign agents huge sums for convincing overseas officials to give contracts to the RBA’s banknote companies.

ASIC and the Australian Federal Police have never investigated the former directors of the two firms for overseeing the high-risk practices.

Under Australian corporate law, directors must act with care and diligence to ensure the firm they oversee does not engage in corruption.

ASIC, which decided in 2012 not to conduct a formal inquiry, has not interviewed a single witness or suspect.

ASIC made the decision after reviewing documents gathered by the Federal Police probe even though the AFP bribery inquiry never investigated directors for alleged corporate offences.

A Fairfax Media-Four Corners investigation has found allegedly corrupt practices spread, with the knowledge of some directors, many years before Mr Hood and a second whistleblower, James Shelton, raised concerns that led to police charging the two Reserve Bank companies with bribery in 2011.

In his first public interview, Mr Hood, a former NPA company secretary, said some former directors allowed highly risky business practices to occur and covered up suspected corruption.

One example cited by Mr Hood involved Mr Thompson ordering NPA to wire $400,000 in 2007 to a Malaysian arms dealer who was helping the firm to win bank note contracts and who had already been paid more than $2.5 million.

The money was sent despite Mr Hood’s pleas not to pay the suspected arms dealer because he was suspected of being corrupt.

Mr Hood said that he was “gobsmacked” by Mr Thompson’s conduct because it so clearly exposed the Reserve Bank firm to possible bribery.

Even after this arms dealer was sacked, Mr Thompson and other directors approved further payments to him in return for his lobbying of Malaysian officials.

In 2011, Malaysian authorities charged the arms dealer with using NPA funds to allegedly pay bribes.

Mr Hood said: “The inaction by ASIC has been astounding. The parent organisation [the Reserve Bank] and the boards of directors have all got their responsibilities. Clearly there has been failings . . . and they should be investigated,” said Mr Hood, who was the NPA’s company secretary between 2004 and 2008.

Mr Shelton, who was a sales manager at Securency in 2007 and 2008, said: “The board is responsible for corporate governance and is ultimately responsible for the company. They [directors] would have known there were very large deals being done in very corrupt places. They put in an anti-corruption program that was fundamentally flawed by any assessment.”

ASIC has defended its refusal to ­conduct a formal probe or interview a single witness or suspect, saying that it decided not to do so after assessing a large number of documents gathered by the Federal Police.

Mr Hood attacked Mr Stevens for testifying before Parliament that the first the RBA knew of corruption allegations involving Securency was when they were aired in 2009.

Mr Hood said that he told the RBA in writing and in a verbal briefing in 2007 that Securency and NPA were exposed to alleged corruption.

The Reserve Bank owns all of Note Printing Australia. It sold its half share in Securency this year. The RBA, Mr Thompson, Mr Bethwaite and Mr Warburton declined to answer questions.