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Background Brief: Vietnam: Prime Ministers Bag Man Implicated in Bribery Scandal Carlyle A. Thayer October 15, 2012

[client name deleted] We are interested in your assessment about the Securency bribery scandal and the affair between Colonel Luong Ngoc Anh and the former Austrade commissioner Ms. Elizabeth Masamune? Despite Anh obviously having taken huge bribes, no action has been taken against him yet in Vietnam. Of course, he is a colonel in Ministry of Public Security (MPS) and is said to be close to Prime Minster Nguyen Tan Dung. But still, it's now clear he took millions in bribes from Securency. And other top bankers and state-owned enterprise heads and deputy ministers have been jailed in the recent past for doing that kind of thing, so why not Col. Anh? ANSWER: Committal hearings are now underway in Australia of eight officials associated with Securency and Note Printing Australia accused of giving bribes to officials in Vietnam and other countries. Securency and Note Printing Australia are both subsidiaries of the Reserve Bank of Australia (RBA). Securency is half owned and supervised by the RBA. Note Printing Australia is fully owned and supervised by the RBA. Last year Colonel Anh was identified in court by Australian prosecutors and the Australian Federal Police as the recipient of up to A $20 million in bribes while working as an agent for Securency. Ms Masamune, Australian Senior Trade commissioner in Vietnam from 1999-2002, advised Securency to make payments to Col. Anh in return for winning contracts to print polymer banknotes. Ms. Masamune was aware from early 1999 that Col. Anh was probably an intelligence agent. Ms. Elizabeth Masamune, is reported to have had an affair with Colonel Luong Ngoc Anh in the early 2000s that she did not report to security authorities. In early 2002, Col. Luong hired , Le Duc Minh the son of the then Governor of the State Bank of Vietnam to act as an agent for ANZ Bank to help them sell ATM technology to Vietnam. It is also alleged that 21,400 was paid by Securency to the State Bank Governor so his son could attend Durham University in the United Kingdom.

2 Senior Australian diplomatic sources have revealed that Col. Anh was listed by Australian security and intelligence as a colonel in the Ministry of Public Security as early as 1998. Anh was identified as one of Nguyen Tan Dung's inner circle and a "bag man" for top Vietnamese officials. Nevertheless, Austrade proposed to the Reserve Bank of Australian in 2001 that Securency should hire Col. Anh as an agent. In 2004 Austrade gave Col. Anh and Securency an award in recognition of their having won contracts of more than A $100 million from the State Bank of Vietnam. The RBA had direct contact with the State Bank of Vietnam and Col. Anh dating back to 2005. In September 2012 former RBA assistant governor Dr. Bob Rankin told an Australian court that he first met Col. Anh in December 2005 when he travelled to Hanoi as Reserve Bank representative to give a presentation on polymer banknote technology. A "strictly confidential" letter from Austrade to Securency in early 2007 stated that its Vietnamese agent, Col. Anh, had been secretly investigated by the Australian Embassy in Hanoi and was highly likely a "senior official with the [Ministry of Public Security] or one of its organs." RBA auditors who investigated Securency issued a note dated June 21, 2007, that read, "We noticed the Austrade report dated 7/3/07 makes reference to Mr. Luong being a senior official within the central Ministry of Public Security and/or one of its operating organs." In May 2009 the Fairfax press broke the story exposed suspected multi-million dollar payments to overseas agents (not just Anh in Vietnam but also in Indonesia, Malaysia and Nepal). Fairfax has a copy of a June 2007 memo sent to the Deputy Governor of the RBA by Note Printing Australia's company secretary Brian Hood. The memo outlined Hoods concerns that the company had bribed foreign officials. In December 2011, in documents released under Australia's Freedom of Information Act, it was revealed that Ms. Masamune knew in 2001 that Securency had financial dealings with Col. Anh. It looks like Prime Mnister Nguyen Tan Dung has withstood the pressures on him to resign. In these circumstances is is doubtful that anything is likely to happen to Col. Anh. His case could be influenced if and when any of the Australian officials currently on trial are convicted.

Suggested citation: Carlyle A. Thayer, Vietnam: Prime Ministers Bag Man Implicated in Bribery Scandal, Thayer Consultancy Background Brief, October 15 , 2012. Thayer Consultancy Background Briefs are archived and may be accessed at: http://www.scribd.com/carlthayer.