RBA's illegal bid for Saddam deal The Reserve Bank used a "frontman" to secretly liaise with Saddam Hussein's brother-in-law and bodyguard in an illegal effort to sell plastic banknotes to the dictator at the height of UN sanctions, according to confidential RBA files. Project Delta was never made public because Mr Bethwaite and other NPA directors kept it secret in 1998 and again in 2009 when the corruption allegations involving NPA and Securency were aired in the media. The revelation comes as two RBA whistleblowers, now police witnesses in the banknote bribery scandal, break their silence on the failure of the corporate watchdog ASIC to investigate the "untouchable" directors of two allegedly corrupt RBA companies. The two polymer banknote firms, Note Printing Australia and Securency, are facing criminal charges for allegedly paying kickbacks to win banknote printing contracts. But the firms' former directors, who were appointed by the RBA, have never been investigated for allowing corruption-prone business practices to flourish for 10 years. Whistleblower and former NPA executive Brian Hood has also publicly challenged RBA governor Glenn Stevens' parliamentary testimony in 2010-2012 on the scandal, saying it "wasn't the truth." A joint Fairfax Media-Four Corners investigation can reveal that allegedly corrupt practices spread - with the knowledge of some directors - for many years before Mr Hood and a second whistleblower, James Shelton, raised concerns that ultimately led to police charging the two RBA companies with bribery in 2011. Confidential bank documents reveal that in May 1998 NPA launched a secret project codenamed "Delta" to secure $80 million that Saddam Hussein had "already allocated" to buy Australian plastic note technology. RBA officials working for NPA said these funds could potentially be accessed by funnelling them through a Jordanian bank "with the green light of SH [Saddam Hussein]." The RBA officials used a frontman to cover up NPA's use of the notoriously corrupt Arshad Yassin - Saddam's brother-in-law and bodyguard - as a "facilitator." Legal expert and Sydney University associate professor David Chaikin, who reviewed the Project Delta files for Fairfax Media, said they showed a "very strong prima facie" case that the RBA officials involved in the Iraq trip had breached UN sanction 661. The sanction banned Australians from engaging in any business dealings "which promote or are calculated to promote" the sale or supply of any goods to Iraq. A Delta file faxed to Mr Bethwaite in 1998 states that Arshad Yassin's involvement in the secret deal was "critical as all decisions on this project will be taken by SH [Saddam Hussein]." Project Delta was stopped in September 1998 after John Hines, an Australian diplomat in the Department of Foreign Affairs' Middle East branch, learnt of it and wrote a furious letter to NPA warning that its "informal meeting with Saddam Hussein's brother-in-law may have already breached Australia's obligations in international law." 'Facilitator': Saddam's brother-in-law Arshad Yassin. Rather than stopping all high-risk business practices when Delta was wound down in 1998, NPA and Securency directors embraced bribery-prone activities, including paying foreign agents huge sums in return for them convincing overseas officials to award contracts to the RBA's banknote companies. But the Australian Federal Police and ASIC have never investigated the former directors of the two firms, including the long-standing chairman and former RBA deputy governor Graeme Thompson, for overseeing these high-risk practices. Under Australian corporate law, directors must act with care and diligence to ensure their firms do not engage in corruption. ASIC has not interviewed a single witness or suspect after it decided in 2012 not to conduct a formal inquiry. ASIC made the decision after reviewing documents gathered during the AFP bribery probe, despite the fact that the AFP never investigated directors for alleged corporate offences. Glenn Stevens: Brian Hood has publicly challenged the RBA governor's parliamentary testimony. In his first public interview, former NPA company secretary Brian Hood alleges that not only did some former directors allow risky business practices to occur, they also covered up suspected corruption. One example cited by Mr Hood involved Mr Thompson in 2007 ordering NPA to wire $400,000 in taxpayer funds to a Malaysian arms dealer who was helping the firm to win banknote contracts and who had already been paid more than $2.5 million. The money was sent despite Mr Hood's pleas not to pay the dealer as he was suspected of being corrupt. Mr Hood said he was "gobsmacked" by Mr Thompson's conduct because it clearly exposed the RBA firm to possible bribery. Even after the arms dealer was sacked, Mr Thompson and other directors approved further payments to him in return for his lobbying of Malaysian officials. In 2011, Malaysian authorities charged the arms dealer with using NPA funds to allegedly pay bribes. Mr Hood also revealed that Mr Thompson and other directors, including Mr Bethwaite and former RBA board member Dick Warburton, agreed to conceal from Nepali authorities the secret commissions that NPA had paid to an agent in Nepal. Whistleblower James Shelton, who was a sales manager at Securency in 2007 and 2008, said: "The board is responsible for corporate governance ... They [directors] would have known there were very large deals being done in very corrupt places." Mr Hood has also attacked RBA governor Glenn Stevens for testifying before Parliament that the first the RBA knew of corruption allegations involving Securency was when they were aired in the media in 2009. Mr Hood said he had told the RBA in writing and in a verbal briefing in 2007 that Securency and NPA were exposed to alleged corruption. The RBA still owns all of NPA but sold its half-share in Securency earlier this year. The bank, Mr Thompson, Mr Bethwaite and Mr Warburton all declined to answer questions.