The Federal Labour Government has been accused of a slipshod and slovenly lack of due diligence when it came to appointing senior management of the NBN Co and the subsequent allocating of contracts to a company that has been fined millions of dollars for bribing organisations to win business contracts in the past.Speaking during an interview with 2UE Sydney’s Mike Smith, Turnbull said that the Labour Government hired NBN Co, CEO Mike Quigley, and CFO Jean-Pascal Beaufret, who were two former senior executives of Alcatel Lucent a French Networking Company who at the time of their appointment were negotiating the settlement of a bribery case which resulted in AlcatelLucent being fined $US137 million after the SEC in the USA accused the company of which Quigley use to be CEO of paying more than $US8m in bribes between 2001 and 2006 to government officials in several countries.
Turnbull said that the Labour Government hired people to run and be the Chief Financial Officer for a $50 billion project in Australia.
“It’s $50 billion worth of taxpayers’ money. So it’s the type of thing you would take a little bit of care with, you would think. And yet, the Government says that it was completely and utterly unaware of the corruption allegations against Alcatel, and the SEC and the Department of Justice investigation. So you’ve got to ask yourself. What level of incompetence does it take to not even get on the internet and make some basic enquiries? You could have found this on Google”.
Turnbull accused Communications Minister Senator Conroy and the Labour Government of failing to investigate the matter.
He said “showed no curiosity, no responsibility in looking into the company in which Mr Quigley and Mr Beaufret had been one of the very, very senior executives in. My real complaint here is about the slipshod, slovenly lack of due diligence on the part of the Government. These are, of course, the guys who are embarking on a $50 billion project without doing any cost-benefit analysis so I guess it’s all consistent with that”.
“As far as Quigley and Beaufret are concerned, they have said that they didn’t bring it to the Government’s attention because they hadn’t been questioned by the SEC in the course of the inquiry. There are a couple of things just to reflect on there and I’ve just got to be very objective and measured about this: Beaufret was the Chief Financial Officer of Alcatel and we know that millions of were paid by Alcatel in bribes, because Alcatel has admitted it”.
Turnbull added “Now Mr Beaufret says, and I don’t challenge him, that he knew nothing about it, that he wasn’t involved and that it all happened unbeknownst to him. But nonetheless, he was the chief money man of Alcatel and a lot of money was being spent improperly and indeed, criminally. So it’s a fair question to ask. You would think, if you were applying for a job and you were being fully candid, you would say: ‘Look, gentlemen, it’s nice of you to invite me to this interview, I’ve got to give you a bit of a heads up – the company, as you probably know or should know, the company I was Chief Financial Officer of is being investigated by the SEC on corruption matters. I just want to assure you that I had nothing to do with it, blah blah blah’. So just put that on the table”.
He said that Quigley, whose role was slightly different but nonetheless very senior, could and should have done the same thing. In other words, to have given the Australian Government a heads up that there was a pretty big issue involving their previous employer that was likely to come up in the lift. Because at that time they didn’t know it was going to be settled. At that time they would have had every reason to believe it was going to go to court and who knows – legal proceedings are very unpredictable – who knows who would have been called into it.
It’s hard to imagine that, for example, that Beaufret would not have at least been a witness in any court proceeding. You think that would be something you would want to alert your new employer to. So I think slipshod conduct by the government, and – as far as Beaufret and Quigley are concerned even though they assert they had nothing to do with it, and again I stress I’m not suggesting that they did – nonetheless it’s something that would think that you would put on the table. Just so that nobody could say it’s some embarrassing issue you raise later that you had to be called to give evidence at a court case and no one could say they hadn’t drawn it to their attention.
The conversation then went on as follows.
The United States Securities and Exchange Commission says this, it names by job title the Chief Financial Officer and other senior employees and it says, quote: “These high level employees therefore knew or were severely reckless in not knowing that Alcatel paid bribes to foreign government officials.” I don’t want somebody who is severely reckless in not knowing what’s going on as the chief financial officer of the NBN responsible for spending $50 thousand million of our money.
Well it’s a fair point. And we’re basically making the same point. I’m not asserting that Beaufret is unfit to have his job. I’m not suggesting that he is incompetent, nor am I suggesting that he’s dishonest, but nonetheless he’s got to acknowledge, and he doesn’t seem to have thought it relevant to disclose to the Government at the time he was being interviewed, he’s got to acknowledge that there was a very serious misallocation or misappropriation of the company’s funds, of Alcatel’s funds.
Over a course of years —
— for criminal purposes in a fairly systematic way. And ultimately if you are the Chief Financial Officer, if something goes wrong with the finances of the company the buck ends up on your desk, and you are ultimately responsible. That doesn’t mean that you knew about it or that you’re criminally liable, but it just raises more questions. But you know Michael, the pertinent issue that I think is most important here is what is going on with Stephen Conroy? How can he seriously say he is a responsible minister, hiring these two men for these very senior positions and having so little curiosity, so little attention to detail that they didn’t even know that Alcatel had this problem.
Senator Conroy has not responded to the allegations.