Maris Beck The Age November 1, 2012
RESERVE Bank officials withheld damning information from a parliamentary committee when they were hauled in to explain the banknote bribery scandal, Federal Parliament has been told.
Liberal MP Tony Smith said in comments attached to a House economics committee report that the bank's governor, Glenn Stevens, and his former deputy, Ric Battellino, had given a "threadbare" and "less than persuasive … excuse" for their "failure to volunteer pertinent facts".
The scandal has never been investigated by the corporate regulator, ASIC, but Greens deputy leader Adam Bandt said in the comments that bank officials had neglected their directors' duties by failing to refer bribery allegations to police when they became aware of them in 2007.
Mr Stevens and Mr Battellino were grilled by the committee last month after repeated revelations in The Ageabout the extent of the Reserve Bank's knowledge of corruption allegations as early as 2007, the failure of bank officials to report the allegations to police and the subsequent failure of the bank to fully disclose relevant details about its handling of the scandal to Parliament.
According to the report, tabled on Thursday, Mr Stevens and Mr Battellino claimed they had previously failed to disclose information because they were respecting a whistleblower's request for confidentiality. The Ageunderstands that a second parliamentary committee scrutinising the scandal has recently been given evidence that contradicts the officials' claims.
The economics committee report concluded that "while the governor argues that he was not derelict in his duties he acknowledged that, in hindsight, 'there should have been more scepticism and more questioning of the managements of both companies earlier than there was'."
The committee expected the bank to release relevant documents for more scrutiny after criminal proceedings were finalised, it said.
But in the report's appendix, Mr Smith and Mr Bandt were far more critical. Mr Bandt said the decision by bank officials to hire a legal firm to probe the corruption allegations rather than call police had been irresponsible.
"A director cannot contract their duties out to a third party. However, that was in effect what the RBA officials did," he said.
Mr Bandt said the findings of the law firm, Freehills, had been "overstated" by the bank "in evidence and other statements".
The committee report said Freehills "was highly critical of [Note Printing Australia's] practices but it concluded that there was no evidence of a breach of Australian law. Consequently, there were no grounds for approaching the police."
But Mr Bandt said: "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 [had been] examined, and thus the reliance to be placed on it by a director should have been very limited indeed."
Mr Bandt said it had taken "many years of questioning" for Mr Stevens to acknowledge that police should have been called earlier.
"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 … A cloud will remain over the Reserve Bank and its governance until a full inquiry is conducted," he said.
An RBA spokesman said the bank had provided a detailed statement to the committee, produced a range of documents and answered questions for almost seven hours.
''The governor has repeatedly said the Reserve Bank condemns corrupt or questionable behaviour of any kind,'' he said. ''We have done a lot of work to tighten controls in the two companies [Securency and NPA]. We have sought at all times to deal appropriately with all the issues that have arisen, and to co-operate with the legal authorities. We have also sought to respond honestly to questions from this committee.''