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 United Nations sanctions, according to confidential RBA files.

The revelation comes as two RBA whistleblowers-turned-star police witnesses in the Reserve banknote bribery scandal break their silence about the failure of the Australian Securities and Investments Commission, to investigate the ''untouchable'' directors of two allegedly corrupt RBA companies.

In 2011, Securency and Note Printing Australia were charged by the federal police with bribery offences related to alleged payments to overseas officials. Court orders prevent recent developments regarding the charges against the companies from being reported.

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.