Strong Australian (and Philippine) governance against graft and corruption

I try to avoid featuring bad news like this one as there is enough already available to the disadvantage of the Philippines. However, I making exception here just to highlight the strong governance practices here in Australia where the local Australian Federal Police (the equivalent of the Philippines NBI) in investigating this breach even to the extent of covering staff at the government foreign trade commission (Austrade). Let’s hope the current administration of President Aquino (this graft happened in 2005 during the previous administration) emphases similar governance practice are currently in place that would not tolerate similar opportunities to happen now.


From the Sydney Morning Herald


Officials implicated in bribery scandal

Richard Baker, Nick McKenzie
Published: September 24, 2012

AUSTRALIAN government officials were deeply involved in a $150 million shipbuilding deal between defence contractor Tenix and the Philippines that the Federal Police is now investigating for alleged bribery, declassified diplomatic cables reveal.

In what shapes as a second big international corruption scandal for Australia following the Reserve Bank bribery affair, cables show Australian officials knew in 2005 that a Philippines order for search and rescue vessels from Tenix was made without the required budgetary approvals in Manila.

This knowledge should have prompted immediate probity concerns within the Department of Foreign Affairs and Trade, which had since the late 1990s been issuing written warnings about corruption in the Philippines specifically involving government contracts.

The Tenix deals in the Philippines, which are at the centre of a police bribery probe, are acutely sensitive for the Australian government because they were underpinned by massive Australian taxpayer grants and loans.

In recognition of the Australian government involvement in Tenix’s Philippines shipbuilding contracts, the Heraldunderstands police have sought to question former Australian trade commissioners who served in Manila dating back to the 1980s.

Australia’s trade agency, Austrade, is understood to be preparing legal advice for its former trade commissioners, according to a source close to the agency.

Austrade, which has been badly damaged through its exposure in the RBA bribery scandal, was also close to Tenix and had one of the then owners of Tenix’s defence business, Paul Salteri, serve on its board during the 1990s.

In March, it was revealed police had raided the offices of former senior Tenix executives as part of the investigation into allegations Australia’s biggest defence contractor paid large bribes to prominent Filipino politicians and officials to secure a 2000-2001 contract to supply up to 16 vessels to the country’s coastguard.

Payments under scrutiny include millions of dollars sent to politically connected Manila lawyer Romela Bengzon, who also became a director of Tenix’s Philippines subsidiary. Prominent politician Rolio Golez this year told the Herald of his rejection of a 2004 offer by Tenix to provide hundreds of thousands of dollars to bankroll his election campaign.

In a statement earlier this year, a spokesman for Tenix defence’s former owners, Sydney billionaires Paul and Robert Salteri, said an internal inquiry had found no evidence of impropriety in the firm’s dealings. Tenix’s defence arm was sold to BAE in 2008.

The cables, obtained by the Herald under Freedom of Information laws, show the Australian ambassador to the Philippines met the country’s transport secretary in April 2005 and was told that ”the original purchase order [for the vessels] had been placed without the approval of a budget by Congress”.

At the time of the meeting, the Philippines parliament had suspended repayments to Tenix for six search and rescue vessels after it was discovered that the funding for the boats had not received required approval.

The police investigation into Tenix remains ongoing.

This story was found at:

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