While the self-reporting of the alleged conduct by the RBA to the AFP is commendable, the perennial question remains - how could extremely bribery-prone behaviour occur under the watch of, or with the acquiescence of, the RBA and the other government agencies working hand-in-glove with Securency and NPA?
• in Vietnam, the use of a local agent and his company (the agent was alleged to be a colonel or former colonel in the Vietnamese internal spy agency and directors of his company were relatives of Communist Party offi cials) and funds used to provide UK university education to a child of Le Duc Thuy, former governor of Vietnam’s central bank between 1999 and 2007, to secure a fi ve year contract to print all Vietnamese currency on polymer banknotes; while
• in Nigeria, investigations are ongoing between the Australian Federal Police (AFP) and the UK Serious Fraud Offi ce (SFO), concerning the possible payment of up to $20m in bribes to intermediaries to secure contracts.
The conviction of the former Securency CFO
Mr Ellery had been charged with one count of false accounting contrary to s 83(1)(a) of the Crimes Act 1958 (Vic). On 20 August 2012, Mr Ellery was sentenced by the Supreme Court of Victoria.
As the former Securency CFO, Mr Ellery had received copies of various documents concerning the payment of monies as a “special commission” to an agent in Malaysia. An amount of $79,502 was authorised for payment to the Malaysian agent to a nominated bank in Singapore. The Court found that Mr Ellery knew that the invoice for the payment was false and that, relevantly, no “marketing expenses” had been incurred, as described on the invoice. In addition, Mr Ellery took steps to conceal what had occurred.
The Court accepted that Mr Ellery was not actively involved within the “inner sanctum” of Securency, where “secrecy and a denial of responsibility for wrongdoing also seem to have been part of a corporate culture … at that time”.
However, the Court found that the off ending “involved a serious and dishonest breach of trust”.
The Court took into account various mitigatory factors in favour of a lesser sentence, from the ten year imprisonment as a head sentence for the off ence. Mr Ellery’s career as a senior corporate fi nance offi cer had eff ectively ended. He had demonstrated remorse, he was unlikely to re-off end, his prospects of rehabilitation were high and he had not obtained any personal fi nancial benefi t from the off ending conduct. He had off ered an early plea with ongoing cooperation and the investigating police acknowledged that he would be an important prosecution witness in the other criminal proceedings against Securency and NPA executives.
The Court accepted that Mr Ellery was not within the group of Securency or NPA executives at the centre of what was alleged by the CDPP to be a conspiracy to bribe public offi cials for commercial benefi t. Rather, as might often be the case with a CFO, he was in the position of knowing enough to contaminate him and then becoming actively involved in creating false records to record (or cover up) the questionable (or illegal) transactions. Courts are making it clear that there is a need for “denunciation and just punishment” for these economic crime off ences.
The Court formed the view that the conduct of Mr Ellery, given his position as a CFO, was in the mid-range of false accounting off ences.
This case, nearly fi ve years after the Royal Commission report on the Australian Wheat Board scandal, calls into question the seriousness with which corporations appear to have regard to foreign bribery laws.
Proactive corporate education and risk assessment
Compliance, compliance and more compliance, or education, education and more education – how far does a company need to go to protect itself? This question has vexed us for a long time and has often contributed to a level of resistance within corporations to what appears to be never-ending compliance programs which divert management from their core task – to make money for stakeholders. The US case in April 2012 of Morgan Stanley and a former senior executive Garth Peterson demonstrated that sustainable, prolonged education can be a real corporate life-saver when you are faced with potential corrupt conduct. In that case, the US authorities did not prosecute Morgan Stanley as they were satisfi ed with the extensive educative steps taken by the company to create and promote a real culture of compliance. Mr Peterson on the other hand, was treated as a rogue employee and he is expected to be imprisoned in due course.
The foreign bribery laws are not diffi cult to understand. They apply to all Australian corporations, citizens and residents. If you bribe or off er to bribe a foreign offi cial to win or retain business, you commit a criminal off ence. The diffi culty and complexity associated with foreign bribery lies in the investigation and prosecution at the end of the chain, and at the beginning, the fi nancial commitment a corporation must make to ensure adequate compliance.
The civil law in Australia for directors and offi cers is not new – their statutory and common law duties apply irrespective of whether a director or offi cer holds an executive or non-executive position.
INTERNATIONAL NEWS
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