A high-ranking Australian embassy official had a secret affair with a Vietnamese spy colonel accused of receiving up to $20 million in suspected brides from a subsidiary of the Reserve Bank of Australia.
Senior trade commissioner Elizabeth Masamune - who held a top- secret Australian security clearance - met Colonel Anh Ngoc Luong, a top official in Vietnam's state intelligence network, in the early 2000s when she was based in Hanoi.
At the time, Colonel Luong was working with RBA firm Securency to win a huge plastic banknote contract with Vietnam's central bank.
Last year, Colonel Luong was accused in court by Australian prosecutors and federal police of receiving up to $20 million in suspected bribes from Securency.
Diplomatic sources have confirmed that while Ms Masamune was encouraging Securency to make substantial payments to Colonel Luong in return for his help winning contracts, she was also intimately involved with him.
Ms Masamune did not declare the details of her relationship with Colonel Luong to the Department of Foreign Affairs and Trade or Australia's intelligence agencies while she was posted to the communist country.
As Australia's most senior trade official in Vietnam, Ms Masamune would have regularly received classified Australian government briefings.
When contacted last night by Fairfax, Ms Masamune made no comment.
A senior diplomatic source said that Colonel Luong is listed by Australian agencies as a colonel in Vietnam's spy agency, the Ministry of Public Security. He is known to be part of the inner circle of the Vietnamese Prime Minister, Nguyen Tan Dung, and a ''bagman'' for top Vietnamese officials.
It is understood that when Securency executives complained about the large amount of money it was paying to Colonel Luong, Ms Masamune told them it was the price of doing business in Vietnam.
The revelation of the affair will reignite pressure on Prime Minister Julia Gillard to set up a broad inquiry into the extent to which senior Austrade and RBA officials supported or covered up bribery and engaged in other improper behaviour.
Deputy Opposition Leader Julie Bishop yesterday said she would seek answers from Trade Minister Craig Emerson about when he became aware of matters involving Ms Masamune and whether he had made any referral to federal police or other security agencies.
''Given the seriousness of the allegations, it's vital the government disclose its full knowledge,'' she said.
Ms Masamune is one of several Australian officials who directly or indirectly facilitated Securency's allegedly improper dealings, which prosecutors have claimed involved the payment of multi-million dollar bribes in Vietnam, Malaysia and Indonesia.
Austrade assisted Securency and Note Printing Australia, another RBA subsidiary, in 49 countries between 1996 and 2009.
Note Printing Australia is alleged to have bribed officials in Malaysia, Indonesia and Nepal.
Between 1999 and 2009 - and with Austrade's knowledge and sometimes support - Securency hired a Vietnamese spy colonel, a Malaysian arms dealer and a convicted South African criminal.
These men acted as the RBA firm's overseas agents as part of a scheme police now allege was a front for paying bribes.
Fairfax first reported last December documents released under the Freedom of Information Act detailing how Ms Masamune, now Austrade's Sydney-based general manager for East Asian Growth Markets, knew in 2001 of Securency's financial dealings with Colonel Luong.
Internal Austrade documents indicate senior trade officials knew of Colonel Luong's links to Vietnam's Ministry of Public Security as early as 1998.
Despite Australia introducing laws in 1999 banning payments to foreign officials, no one in Austrade warned Securency that it might be acting illegally by paying Colonel Luong.
In January 2001, Ms Masamune told Securency that she would ''stay in touch with Anh [Colonel Luong] and follow up on the letters he needs to write to you regarding other financial issues''.
Two months later, Securency sent an email to Ms Masamune stating: ''In the case of Vietnam, we are doing more than we have for any other country, especially in terms of financial commitment, which we are regarding as an investment.''
Ms Masamune was also copied in on emails that outlined Colonel Luong's March 2001 plan to travel to Australia for ''discussion and signing amendment concerning'' the payments he was receiving from Securency.
Ms Masamune also told Securency she would lobby the Immigration Department to issue Colonel Luong with a ''super-quick'' visa. She also helped facilitate a trip to America taken by Colonel Luong and other Vietnamese officials and paid for by Securency.
Ms Gillard and Treasurer Wayne Swan have resisted calls for a broad inquiry into the bribery scandal, including those made by Ms Bishop and fellow Liberal MP Tony Smith, independent Nick Xenophon, the Greens and the anti-corruption watchdog, Transparency International.
The federal police inquiry into the scandal was sparked by revelations by Fairfax in 2009, but it has been limited to investigating and charging with bribery offences former executives of Securency and Note Printing Australia.
Committal hearings for alleged bribery offences committed by up to eight former Securency and NPA executives begin today in Melbourne. The AFP has not investigated the role of government agencies in the scandal, despite evidence Australian officials were aware of or involved in some of Securency and NPA's overseas dealings.
Another former Austrade official, Asia regional director David Twine, also worked closely with Securency, government documents show. Mr Twine met Indian arms dealer Vipin Khanna in 2009 in relation to Securency's affairs, despite the company having dismissed Mr Khanna as its agent after he was adversely implicated in the Iraqi oil-for-food scandal. Mr Twine left Austrade in October last year.
The Australian Securities and Investments Commission has offered no public explanation for its recent refusal to conduct even a preliminary investigation into the scandal in the face of strong evidence showing how serving and former RBA officials may have engaged in a major bribery cover-up in 2007.
Serving and former RBA officials overseeing Securency and Note Printing Australia were warned by whistleblowers in 2007 of bribery, but failed to alert police.
Read more: http://www.canberratimes.com.au/national/envoys-link-with-viet-spy-revealed-20120812-2433b.html#ixzz23NBocZi3
Read more: http://www.canberratimes.com.au/national/envoys-link-with-viet-spy-revealed-20120812-2433b.html#ixzz23NBiutHJ