Shadow Communications Minister Malcolm Turnbull has demanded an explanation from the chief executive and chief financial officers of the National Broadband Network Company over the bribery scandal which has engulfed their former employer and now key equipment supplier, French networking giant Alcatel-Lucent.

The US Securities and Exchange Commission revealed this week that Alcatel-Lucent had paid US$137 million to settle criminal and other charges arising from what it said were bribes paid to government officials in South-East Asia and Latin America between 2001 and 2006, with the aim of securing telecommunications contracts.

During that period, both NBN Co CEO Mike Quigley and CFO Jean-Pascal Beaufret held top-level roles in the French company, but NBN Co has issued a statement denying any links between the pair and the bribery, and the SEC did not mention either in its legal documents.

“NBN Co claims neither Mr Quigley nor Mr Beaufret were aware of these bribery schemes,” said Turnbull in a statement issued this afternoon. “But both men owe the Australian public a far more detailed explanation.”

Turnbull highlighted the SEC’s statement that Alcatel-Lucent had “a lax corporate control environment” that had allowed the improper conduict to take place, with the company not detecting or investigating numerous red flags regarding such activities.

“Each must explain how they could serve in such senior positions and be unaware of millions of dollars of bribes flowing to government officials in Costa Rica, Honduras, Taiwan and Malaysia to secure sales of Alcatel equipment,” claimed Turnbull. “They must also outline what financial controls are in place at NBN Co to ensure malpractice cannot be overlooked by senior management, as their denials of any knowledge of the bribery schemes suggest it was at Alcatel.”

Turnbull questioned what formal recruitment and vetting processes were used to hire the pair, and whether the Labor Government was aware, “as it ought to have been”, of the investigation and if so, how it established the two executives were not directly involved or indirectly responsible for what the SEC described as a “lax corporate control environment”.

In addition, the Liberal MP questioned what steps the Government and NBN Co had taken to ensure strong corporate controls within NBN Co, and the company’s relationship with supplier Alcatel-Lucent and any relationship with individuals employed by the French company during the period when the alleged bribes took place.

In June, Alcatel-Lucent won a contract to supply NBN Co with up to $1.5 billion of optical and ethernet aggregation equipment. However, the company has stated consistently that neither Quigley nor Beaufret were involved in selecting the company, due to potential conflicts of interest.

The office of Communications Minister Stephen Conroy has not yet responded to an invitation today to respond to Turnbull’s comments. However, NBN Co issued a statement denying any links between its executives and the bribery case.

“Neither Mike Quigley nor Jean-Pascal Beaufret had any involvement in the matters which were the subject of the recent US Securities and Exchange Commission announcement relating to Alcatel-Lucent,” the company said. “In fact the actions of a number of individual Alcatel Lucent employees detailed in the SEC’s statement fell outside the accountability and jurisdiction of both Mr Quigley and Mr Beaufret.”

NBN Co stated that if the US regulators had believed either Quigley or Beaufret were accountable with regards to the matter, they would have said so, and “presumably sought to interview them” as part of the investigation.

“They did not,” the company said. “The US authorities make no finding or allegation against either Mr Quigley or Mr Beaufret.”

Image credit: Office of Malcolm Turnbull