Securency probe collected 'no evidence'

DEFENCE lawyers are scrutinising the police who investigated bribery at Reserve Bank companies, telling a court that evidence was tainted by investigators' bias.

Federal Agent Rohan Pike told the Melbourne Magistrates' Court that the investigation into former Securency and Note Printing Australia executives gathered ''no admissible evidence'' and no witness statements during the first six months of inquiries.

The court heard that one of Mr Pike's hand-picked team members resigned after being investigated for revealing police secrets to a convicted drug trafficker.

Yesterday's proceedings also raised questions about the conduct of the companies' owner, the Reserve Bank of Australia, with Mr Pike testifying that some of the practices under investigation were ''still continuing into 2009 when we were investigating''.

Mr Pike said he had been temporarily supervising the preliminary operation in November 2009, about six months after preliminary inquiries began in May. He said in November he spoke to police command and expressed the view that ''in order to achieve a success in a forward manner, it would - might be a good idea to collect some evidence''.

Neil Clelland, SC, representing the former chief executive of Note Printing Australia, John Leckenby, asked: ''An investigation should collect some evidence? … That would hardly have been a revelation to an experienced police officer, would it?''

Mr Pike said: ''It was a revelation that hardly any admissible evidence had been collected to that point.''

Mr Clelland read a document written in August 2009 by the former head of the investigation, Kenneth Wayne McDermott, which said: ''It is assumed that unless direct evidence is uncovered through those investigations between now and November 2009, then the allegations of bribery cannot be further sustained. It would lead the AFP investigations to report an inconclusive result and the case finalised on that basis. Advice to the RBA [Reserve Bank of Australia, full owner of NPA and half-owner of Securency] would then follow, the advice may recommend the RBA consider discontinuing Securency's use of commission payments to overseas agents.''

Mr Pike, under cross-examination, said he had not had knowledge of such a deadline. He said: ''The major change that happened within those three months was that there was a briefing given by the investigative team to the Commissioner.''

He said when he took charge of the operation in November 2009, he decided that ''we should expand the team significantly, due to the size, breadth and scope of the investigation, and that we should speak to various witnesses, relevant witnesses, as soon as possible''.

Mr Clelland said that publicity surrounding the case and police tactics had compromised the investigation.

''You and your team violated just about every principle of fairness in dealing with witnesses during the course of this investigation, did you not?''

Mr Pike said they had not.

He had agreed with Mr Clelland's statement on Tuesday that a former federal agent, Tim Clinnick, had resigned after being investigated for misconduct including disclosing undercover methodology to a convicted drug trafficker and consuming cocaine, ecstasy and methamphetamine with criminals.

The committal continues.

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