Australia central bank subsidiary in Hussein link


The Reserve Bank of Australia on Monday admitted that staffers from a subsidiary had visited Iraq at the height of U.N. sanctions after it was accused of attempting to strike an illegal deal with Saddam Hussein.

A joint investigation by the Australian Broadcasting Corp. and Fairfax Media said secret files showed officials from the central bank’s Note Printing Australia (NPA) went to Iraq to discuss a contract to turn the paper currency into polymer notes.

During the 1998 trip, they met a middleman, dictator Hussein’s brother-in-law and bodyguard Arshad Yassin, the reports said.

“Indications from Arshad Yassin’s office are that Saddam Hussein’s office has already allocated $US65 million for the total project,” RBA officials said in one document, the media groups reported. “He has confirmed that Saddam Hussein has seen the polymer notes samples and is keen to adopt our product.”

Reserve officials working for NPA said the funds could potentially be accessed by funneling them through a Jordanian bank “with the green light of SH (Saddam Hussein),” it was alleged.

The operation was called off six months later after Australian diplomats uncovered the secret dealings with the brutal regime, according to the ABC.

The RBA admitted officials made the trip, and calls mounted for a full inquiry.

“The visit in 1998 was, in the opinion of the bank, ill-advised,” it said in a statement. “No bank notes were ultimately supplied to Iraq.”

David Chaikin, a legal expert at the University of Sydney who reviewed the confidential bank documents, said the negotiations were a violation of international law, and alarm bells should have been sounded “to the highest levels of the bank.”

NPA has been plagued by allegations of corruption in recent years, with claims that it and another RBA subsidiary Securency paid bribes to win plastic bank note contracts in Asia.

Executives from both companies have been charged over the alleged racket, which involved contracts in Indonesia, Malaysia, Vietnam and Nepal, following an investigation by Fairfax in 2009.