Supplementary Comments – Mr Adam Bandt, MP, Deputy Leader,
Reserve Bank of Australia (RBA) is a key pillar of the country's economy. It
needs to operate free from the shadow that hangs over it because of the
banknote printing bribery scandal.
recent appearance of senior RBA officials before the committee to address the
issues surrounding the bank and its subsidiaries, Securency and Note Printing
Australia, has left many questions unanswered.
significantly, there is still no satisfactory explanation as to why the police
weren't called when the RBA was first presented with credible allegations of
illegality, possible corruption and impropriety.
hearings have confirmed that in the middle of 2007, a credible RBA whistleblower
raised serious concerns - many have which have since proven to be well-founded
- about public money being used to bribe foreign officials and politicians, in
contravention of Australian law.
receiving such a complaint, a senior official within such a central public
institution should have informed the Australian Federal Police and/or the
Australian Securities and Investment Commission.
the response of the RBA and its subsidiaries - to commission a commercial law
firm to conduct an internal review - was manifestly inadequate. A commercial
law firm does not have the power to question witnesses, seize documents or
conduct investigations in the way that an investigatory body acting with the
force of law can. Indeed, the hearings revealed that the law firm didn't even
interview the agents subject to the whistleblower's allegations nor examine any
of their financial records.
director cannot contract their duties out to a third party. However, that was
in effect what the RBA officials did. Their evidence was that as the lawyers'
report did not disclose any crime had been committed nor recommend approaching
the AFP, the RBA officials felt no obligation to do so. It is questionable
whether a director of a private company today would be able to rely on such a
any event, in evidence and other statements the RBA overstates the lawyers'
report's findings: at its highest, the report did not provide a clean bill of
health. It found in one instance, for example, that simply because there were a
number of equally compelling explanations for one of the allegations, no
positive adverse finding could be made. The report wasn’t positive evidence of
the absence of wrongdoing, but rather a statement that no conclusive findings
of illegality could be made. It should have been obvious on the face of the
report that no relevant interviews had taken place and no financial documents
examined, and thus the reliance to be placed on it by a director should have
been very limited indeed.
RBA also placed reliance on their internal audits. However, as was admitted in
the hearings, these internal audits had less breadth and depth than an external
audit and had fewer resources. Again, an external investigative agency such as
the AFP would have had much greater powers and resources.
the conclusion of his evidence to the Committee, the Governor acknowledged that
in a similar situation in the future the police should be called in earlier. It
has taken many years of questioning for the Governor to make this admission and
the approach of the RBA to the Committee’s past and current inquiries does not
instil great confidence that the RBA accepts that grave errors have been made.
Australian Greens remain concerned that the corporate governance of the Reserve
Bank of Australia has been found wanting and we are not confident that the
lessons have been learned. A
cloud will remain over the Reserve Bank and its governance until a full inquiry
12. Recommendation: That the government establish an
inquiry into the Reserve Bank and its subsidiaries with regard to the bank note
bribery scandal to make recommendations on strengthening corporate governance
at the Reserve Bank.
Adam Bandt MP
Federal Member for