Labor has signalled that it will pursue the Coalition government over its appointment of Bill Morrow to run Australia’s largest national infrastructure project, given that the new NBNCo chief executive is named in current legal proceedings in the United States.



Guardian Australia has previously revealed that Morrow, appointed by the government in December 2013 to run NBNCo, is named in a shareholder action connected to his management of an American gas company that was subsequently responsible for one of the largest utility disasters in Californian history.

Morrow joined the San Francisco-based Pacific Gas and Electric (PG&E) in 2006 as chief operating officer and became chief executive a year later. He left the gas utility in September 2008.

The new NBNCo chief is named alongside 21 other PG&E executives in a consolidated shareholder derivative lawsuit launched against the company, its directors and management.

The suit filed in the San Mateo county court alleges that Morrow, as president and chief operating officer, was in a leadership role at PG&E a time when the company was “grossly underspending on operational and process safety, creating a situation where a catastrophic incident was not only possible but highly likely”.

It alleges Morrow was responsible for implementing a risk-management system for critical infrastructure but, with the “support and approval” of other PG&E executives, he had allowed the company to “make safety a low priority in comparison to profits”.

On Sunday, the shadow communications minister, Jason Clare, signalled via a spokesman that Labor would be pursuing particulars about Morrow’s appointment. “There are clearly questions as to what [the communications minister, Malcolm] Turnbull knew and when he knew it”.

“Given the vicious attacks launched by Mr Turnbull against previous NBNCo CEO Mike Quigley it will be interesting to see what assurances he sought and received from Mr Morrow that the allegations would not hinder his work at NBNCo,” the spokesman said.

NBNCo representatives are due to appear before a Senate estimates hearing in Canberra this week.

Both a spokesman for NBNCo and a spokesman for Turnbull have told Guardian Australia that Morrow’s history with PG&E was fully disclosed to the government at the time of his appointment.

The NBNCo spokesman described the suit in which Morrow is named as “civil proceedings for shareholder compensation directed against both PG&E and a large number of former officers and directors of the company”.

The shareholder suit concerns pipeline disasters in California in 2008 and 2010. On 24 December 2008, a man was killed in Rancho Cordova, California, when a teenage girl lit a cigarette, triggering a massive pipeline explosion that injured five others. In 2010, another pipeline explosion in San Bruno killed eight people and destroyed, or damaged, more than 100 homes.

Morrow had already left PG&E at the time of both incidents but several investigations have been critical of management practices and priorities at the company over a period spanning 15 years, including the two years he was at the helm.

In April 2014, a federal grand jury for the northern district of California returned an indictment charging PG&E with 12 violations of the gas pipeline safety act. A statement by the FBI says: “The indictment alleges that PG&E knowingly and willfully violated the PSA [Pipeline Safety Act] and its regulations between 2003 and 2010.

“According to the indictment, the charges stem from PG&E’s record-keeping and pipeline integrity management practices. The indictment alleges that PG&E failed to address record-keeping deficiencies concerning its larger natural gas pipelines, knowing that their records were inaccurate or incomplete.”

NBNCo said last week that Morrow had not been called to give evidence in the grand jury proceedings and “whether or not this occurs is a matter for the US courts”.

The remark by Clare’s spokesman concerning the Coalition’s sustained criticism of Quigley relates to questions that the Labor appointee was asked about his former corporate history at Alcatel Lucent.

Quigley, who was appointed by Labor to run the NBN rollout, had to answer regular questions about his actions and responsibilities as a former senior executive when it was revealed there had been corruption at Alcatel Lucent in Costa Rica. Quigley repeatedly denied any wrongdoing.

With additional reporting by Dominic Rushe in New York