Aussie Defence firm 'operated secret bank accounts'

THE alleged creation of secret offshore bank accounts by Tenix to move money to the Philippines has emerged as a key part of a bribery investigation into Australia's biggest defence contractor.

Sources knowledgeable about Tenix's dealings in Asia say they told the Australian Federal Police that former executives had allegedly opened offshore bank accounts at the time they were negotiating a shipbuilding contract with the Philippines.

It can also be revealed that Tenix paid or offered to pay for the international travel of senior Philippine officials involved in a $150 million contract to supply search-and-rescue vessels to the country's coast guard.

Under laws introduced in 1999, it is illegal for Australian individuals or companies to offer a foreign official a benefit in order to obtain a business advantage.

The Age revealed in March a federal police investigation into Tenix's dealings around Asia amid allegations that politicians and officials may have received bribes in return for awarding contracts to the company.

A spokesman for Sydney's Salteri family, which owned Tenix's defence business at the time of the deals that are being scrutinised by police, said this year that an internal inquiry had found no evidence of impropriety in the firm's overseas affairs.

British arms giant BAE referred Tenix's Asian dealings to police in 2009 after buying the defence business from the Salteris in 2008 for $775 million.

Tenix is alleged to have sent several million dollars to politically connected Manila lawyer and director of its Philippine subsidiary Romela Bengzon.

Senior Filipino congressman Roilo Golez this year revealed he had declined an offer of several hundred thousand dollars from Tenix to help fund his 2004 election campaign.

The Tenix controversy is highly sensitive for the Australian government, which has already been rocked by the federal police decision to charge the Reserve Bank's currency printing subsidiaries and eight of their former executives with bribery.

The 2000-01 contract with the Philippines to supply search-and-rescue vessels was supported by a $109 million Australian-taxpayer-funded guarantee through the Export Insurance Finance Corporation, a division of the Foreign Affairs Department.

The guarantee covered about 80 per cent of the cost of the Philippines' loan to buy the vessels. Australian bank ANZ provided the loan.

Tenix's initial 1998 contract with the Philippines to deliver two vessels was backed by a $21 million Australian aid grant and a separate taxpayer-funded guarantee.

On Monday, The Age published excerpts of declassified Australian diplomatic cables that showed Australian government officials were heavily involved in Tenix's Philippine dealings.

A 2005 cable from the Australian embassy in Manila revealed that Australian officials were told by the Philippine transport secretary that the 2000-01 contract to supply six search-and-rescue vessels did not receive budgetary approval by the country's Congress.

The deal had been arranged directly between the Philippine Finance Department, Tenix, the Australian government and ANZ.

The Philippines suspended payments to Tenix in 2005 after influential senators discovered the vessels ordered by the Estrada administration had not received congressional budgetary approval.

The Philippines has resumed payments and the ANZ loan is expected to be repaid soon.

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