Serious questions have been raised as to why communications minister, Stephen Conroy, and the Labour Federal Government were not aware of corruption allegations at French company Alcatel-Lucent who are now a major supplier to the NBN Co.This is the same company who were the former employers of NBN CEO, Mike Quigley and Jean-Pascal Beaufret the now, CFO of the NBN Co who are tasked with spending up to $36 Billion in tax payers’ money on a new National Broadband Network.
The Australian newspaper claims that when former Alcatel-Lucent executives Mike Quigley and Jean-Pascal Beaufret were appointed to the NBN Co by Conroy in mid-2009, the US Securities and Exchange Commission was several years into a five-year probe into bribery allegations against the French Telco giant, but despite several technology journalists writing about the investigation in Australian newspapers at the time, the Labour Coalition Federal Government and Conroy have said they had no idea Alcatel-Lucent was the subject of a major US government investigation, and that Quigley and Beaufret did not raise it when they went for their job interviews.
In December, Alcatel-Lucent was fined $US137 million after the SEC accused it of paying more than $US8m in bribes between 2001 and 2006 to government officials in several countries.
This is the same company that has recently been awarded major contracts by the NBN Co and will be paid $70m to fulfil the first part of the NBN contract. The total expenditure with the bribe linked company could reach $1.5bn if Alcatel-Lucent can meet supply demands.
The Australian said that Mr Beaufret, now chief financial officer of NBN Co, had been chief financial officer at Alcatel and then Alcatel-Lucent between 2001 and 2007. Quigley, executive chairman of NBN Co, was appointed president and chief operating officer of Alcatel in 2005.
Both Quigley and Beaufret said they had no involvement in the matters subject to the SEC’s complaints and were not interviewed in relation to the SEC investigation.
US, SEC investigators alleged Alcatel “lacked sufficient internal controls” to prevent bribes being paid and “improperly recorded the payments in its books” during the 2001-06 period.
In a recent Senate hearing the federal government said Beaufret, as chief financial officer, was in charge of NBN Co’s internal controls and financial governance.
When questioned as to how it was comfortable with Beaufret’s past as chief financial officer of Alcatel, the government said he was appointed to NBN Co “due to his skills, previous experiences” and “ability to perform the duties of CFO to a high standard”.
In his role as NBN Co chief, Quigley was paid $1.86m for the 2009-10 financial years. Beaufret’s salary has not been disclosed.
Opposition communications spokesperson, Malcolm Turnbull, has also waded into the debate, saying it it was “remarkable” neither Quigley nor Beaufret had not examined the corruption charges further prior to this and also questioned former PM Kevin Rudd and communications minister Conroy’s role in the saga.
“It is remarkable that Mr Quigley and Mr Beaufret apparently did not consider a bribery scandal involving their previous employer was a matter they should raise with their future employer,” Turnbull said.
“Exactly what roles did Senator Conroy and former prime minister (Kevin) Rudd play in this utter failure of due process?”