I hope that the board members of the Reserve Bank at their meeting today spent a little time reminding themselves how negligent they were over the activities of their bank note printing subsidiary.

The official statement from the bank after the Federal police made its recent arrests claimed that directors from the bank were unaware of the bribery and corruption that went on to secure the lucrative export contracts. I believe that any prudent director should have been aware of the dangers of such practices. As the Melbourne Age mentioned in one of its early reports on this scandal, there is a long history of scandal in the international note printing business.

American journalist Murray Bloom outlined this in 1983, when he published The Brotherhood of Money.

As The Age summarised his findings back in 2009:

Henry Keith, a former legendary sales executive for American Bank Note Company in Latin America between the 1930s and ’50s, told Bloom that bribery was common. “When a competitor gets his first hook into your account ? you know damned well he’s going to move heaven and earth ? and bribe God knows who ? to get more business to entrench himself,” Keith said. He also spoke of the “necessary and controversial” role of middlemen in foreign countries who were able to help secure deals for currency companies. According to Keith, the best agents were from “well connected, prominent local families”.

Bloom discovered that some of the world’s biggest banknote companies had engaged senior politicians and central bank figures as agents who would receive commissions on the completion of successful deals. Said Keith: “In one case (our agent) was an ex-minister of foreign affairs. In Ecuador, it was an ex-general named Cobo, Comandante Cobo, who made a fortune from his 5 per cent commission.”

Since Bloom penned his book, currency companies have continued to run into trouble; British banknote printer De La Rue is under investigation by London’s Serious Fraud Office over claims of corruption in Africa. Germany’s Giesecke and Devrient stopped supplying money to Robert Mugabe’s regime in Zimbabwe after a request from the German Government. The American Bank Note Holigraphics Company was fined a few years ago after it was accused of breaching the US corruption laws in connection to a payment to a Swiss bank account that was aimed at influencing Saudi Government officials.