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Has the RBA governor told the full story?

Questions surround Reserve Bank of Australia Governor Glenn Stevens following more revelations around the Securency banknote contracts scandal.

PT2M23S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-25uw1 620 349

THE whistleblower who exposed alleged corruption in two Reserve Bank companies told five top bank officials of his explosive concerns, only to be forced out of his job and warned to keep quiet.

The revelations about what the former executive Brian Hood has told the federal police investigating the scandal raise serious questions about whether Reserve officials risked breaking laws by misleading Parliament, covering up corruption or victimising a whistleblower.

The revelations increase pressure on the Reserve governor, Glenn Stevens, and add to calls for a full inquiry into the scandal, which involves allegations that foreign agents paid bribes while working for Reserve subsidiaries.

Brian Hood leaves the Melbourne County Court after giving evidence in the Securecy case.The Age/News, Picture Michael Clayton-Jones, Story Maris Beck, Nick McKenzie

Accusations ... Brian Hood leaves the Melbourne County Court after giving evidence in the Securency case yesterday. Photo: Michael Clayton-Jones

The police have documents in which Mr Hood claims that in 2008, after he raised corruption concerns, he was told by an assistant Reserve governor, Bob Rankin, that his job ''had become untenable''.

The former deputy governor, Ric Battellino, whom Mr Hood briefed on the allegedly corrupt agents, allegedly told Mr Hood in 2008 that he should ''never'' again discuss the bribery issue.

Mr Hood told Mr Rankin he was being treated unfairly, with his duties as company secretary substantially reduced.

Mr Hood's statement to police says that after receiving this email, Mr Rankin, then the chairman of Note Printing Australia and Securency, ''came to Melbourne to meet with me''.

''He indicated my position had become untenable … Rankin confirmed details of a redundancy which I accepted and I left … I therefore believe that my departure from NPA is more accurately described as a redundancy than a resignation, as described in my first [police] statement.'' It is a breach of Australian corporate law to victimise a whistleblower.

The sworn statement of Mr Hood, a former company secretary of NPA, tendered in Melbourne County Court yesterday contradicts key parts of Mr Stevens's parliamentary testimony, including his repeated assertion that the bank did not know of alleged corruption inside NPA's sister company Securency before a 2009 media expose´.

Mr Hood's statement says that in addition to telling the assistant governor Frank Campbell in 2007 about alleged corruption involving both firms, he shared his concerns with Mr Battellino, the Reserve's chief auditor, Paul Apps, and the bank's in-house lawyer, Helen Brown.

Mr Battellino asked him to write a statement for the bank.

According to his statement to police, Mr Campbell told him in June 2007 his memo ''would be read by the deputy governor and perhaps the governor of the RBA''.

Mr Hood allegedly raised fresh corruption concerns involving NPA and Securency several times during the next 12 months, including with senior bank officials. His statement says one of them, Mr Campbell, was ''supportive of my concerns''. In August 2008 Mr Hood sent an email to Mr Rankin detailing ''some matters and behaviour [about NPA] which I wanted noted and acted upon''.

The matters included Mr Hood's claims that the NPA boss and Securency director Chris Ogilvy had ordered Mr Hood to ''compromise'' internal investigations into suspected bribery.

Mr Hood's statement also says he told the federal police he was ''considering taking action in relation to the circumstances of my departure'' from NPA.

But the police learnt of the corruption concerns only in 2009, after an expose´ in the Herald forced the Reserve to call in the police. Last year, the police charged several former executives of NPA and Securency with bribery offences related to business deals in Malaysia, Indonesia, Vietnam and Nepal.

Mr Stevens has repeatedly told Federal Parliament's economics committee the Reserve knew nothing about alleged corruption involving Securency before the media reports in 2009.

Mr Stevens has also repeatedly tried to separate the corruption allegations involving NPA and Securency. But Mr Hood told the court yesterday that ''the two businesses worked very closely together,'' sharing the same chairman, the former Reserve deputy governor, Graeme Thompson.

Mr Hood's statement reveals the extent to which some of the Reserve-appointed directors of both firms, including Mr Thompson, allowed dubious corporate behaviour to continue in the face of corruption warnings.

For instance, despite the NPA board deciding to sack the Malaysian agent in May 2007 over ''probity concerns'', Mr Thompson approved a $492,000 payment to him in September 2007.

Under Australian corporate law, directors must not act recklessly or without diligence.

Despite revelations during the past 12 months about the conduct of Reserve officials, the corporate watchdog the Australian Securities and Investments Commission has refused, without explanation, to investigate the scandal.