Bribing a Nigerian official was just “a cost of doing business”, the former financial director for Australian Reserve Bank subsidiary Securency has told a London court.
“At the time there was disappointment, but I agreed to proceed with it,” said David Ellery, who was Securency’s financial controller and company secretary until 2010.
Mr Ellery also claimed that several other senior executives at Securency were aware of the alleged bribe.
Ellery had agreed with police to reveal corrupt activity at Melbourne-based polymer banknote firm Securency International, in exchange for a prosecution deal which led to his avoiding jail.
Mr Ellery was giving evidence at the trial of Peter Chapman, the former director of business development in Africa for the company.
Mr Chapman has pleaded not guilty to six corruption charges over alleged bribes in 2007, 2008 and 2009 to a Nigerian mint official who cannot be named for legal reasons.
Mr Chapman arranged for hundreds of thousands of dollars to be transferred to the official through a web of offshore companies and accounts, the jury heard this week.
Mr Ellery said he was present at a meeting at Securency’s head office about their Nigerian operation, attended by Mr Chapman and several other senior Securency directors.
The discussion focused on bringing forward an order for polymer substrate (used to produce banknotes) from the next year to the current year to make the company’s forward orders “look stronger”, Mr Ellery said.
“Peter Chapman indicated that there would be a cost involved in doing that, which at that point was thought to be entertainment or a first class airfare or something like that (or) to take the senior representatives of the Nigerian bank on a factual tour to see how banknotes were printed,” he said.
Mr Chapman was “somewhat upset” at the meeting, he said, because “he felt an unreasonable amount of pressure was being put on him to achieve sales”.
Later Mr Chapman admitted to Mr Ellery in a phone call that the “cost” involved would actually be a payment of a sum of money to an official at the Nigerian mint, in order to “achieve a letter of intent” from the mint for the proposed orders, Mr Ellery said.
“That’s not the same thing as taking someone on a tour,” prosecutor John McGuinness QC said.
“No it is not,” Mr Ellery replied. However he said, “the payment was taken as a cost of doing business there (in Nigeria) … there was disappointment but I agreed to proceed with it”.
Mr Ellery said that after being told of the alleged bribe in the call with Mr Chapman, he discussed the call with Hugh Brown, the Securency director of sales, with Joe Mamo the director of strategic marketing, and another executive “at various times afterwards”. Both Mamo and Brown were aware of the purpose of the payment, he said.
He later had a discussion with Mr Chapman “centred on what was the best description” to place on an invoice to disguise the alleged bribe.
In the end it was described as “additional services”, which normally would be covered by the sales agent’s commission.
When the invoice came in he wrote “ok to pay” on it and added his initials.
Later in an email a Securency executive, he said he had spoken with Mr Chapman “to confirm that the matter we discussed last night assisted in setting a positive mood to this meeting” – referring to a meeting in Nigeria.
The “matter” he referred to was the payment to the Nigerian official, Mr Ellery said.
Some time later Mr Chapman told Mr Ellery that the recipient of the cash payment had been an official at the Nigerian mint, known to them both. He said the money had gone to help pay the mortgage of a property the man owned.
Mr Chapman “indicated that since an investigation had started he was concerned as to the transparency of the transaction and had gone to Nigeria to prepare paperwork to justify the payment,” Mr Ellery said.
Under cross examination by defence counsel David Spens QC, Mr Ellery admitted that he had lied to police several times over his knowledge of corruption at Securency.
“You’d agree you were not full and frank in those interviews (with federal police),” Mr Spens said.
“Yes I would agree,” Mr Ellery said.
“You lied in downplaying your part and your involvement?”
“Yes.”
Mr Spens said, and Mr Ellery agreed, that police had come to him wielding a “stick” – a threat of corruption charges – and a “carrot” – possibly avoiding a custodial sentence on lesser charges of false accounting – in order to persuade him to give evidence against others at Securency.
“You wanted to ensure you could get prosecutor support not to go to prison,” Mr Spens said.
“Yes, that would be an influencing matter, yes,” Mr Ellery replied.
The trial at Southwark Crown Court before Judge Michael Grieve QC continues on Friday.
