This article is by Mike Quigley, the chief executive of NBN Co. It appears to have been first published by The Australian newspaper and is reproduced here with NBN Co’s permission.
opinion The past week has seen the debate over the National Broadband Network take a disappointing turn. It has moved away from arguments over the pros and cons of building a ubiquitous network available to every premise in Australia to an unfounded attack on the integrity of myself as the chief executive of NBN Co and on my chief financial officer, Jean-Pascal Beaufret.
Our conduct is being brought into question for neglecting to mention, in the course of our interviews for positions at NBN Co, that a company we once worked for was subject to a settlement in a bribery investigation, a settlement that made adverse findings about the company’s internal controls. Some in the media have since suggested erroneously that we ourselves were being investigated.
Yet we are being maligned for events in which we played no part, for which we were never investigated, questioned or even contacted, but that we were subsequently instrumental in helping to resolve to the satisfaction of the legal and regulatory authorities.
The facts are these. In 2009 Alcatel-Lucent, a Paris-based telecoms company for which Jean-Pascal and I previously worked, made a US$137 million settlement with the US Securities and Exchange Commission and US Department of Justice. This settlement was the resolution of a five-year investigation by these agencies following the notification in 2004 by its predecessor, Alcatel, of suspected illegal activity by an employee in Costa Rica in collusion with another employee in France.
These two individuals, between 2001 to 2004, bypassed Alcatel’s established processes and policies, broke the law, bribed officials in connection with new telecom equipment contracts and pocketed Alcatel funds. One of these individuals was sentenced to 30 months in prison; the other, I believe, is still being sought.
When the company became aware of this illegal activity it notified the relevant authorities, including the SEC. In the following months it uncovered two further illegal acts: one in Taiwan, the other in Honduras. It then worked closely with the authorities in investigating the possibility of illegality in other countries. One was found in Malaysia.
Can Alcatel can be criticised for not having tight enough controls that would have prevented these illegal acts from occurring? Of course it can. But neither were the internal controls at many other multinational companies as robust as they could have been either.
Between 2008 and 2010 there were 44 settlements with the US SEC for infringements of the Foreign Corrupt Practices Act totalling $US3.3 billion. Alcatel was among well-known names such as General Electric, Siemens, Daimler, Shell, Fiat, Volvo and BAE Systems. This does not excuse Alcatel’s behaviour but makes the point that it is not easy to spot a rogue transaction in a company of 60,000 employees working in more than 130 countries.
What is instructive is how the company responded. As soon as the executive committee became aware of these events it publicly launched an inquiry and took immediate steps to inform and co-operate fully with all authorities.
I was running Alcatel North America and also Alcatel’s Fixed Communications Group until April 2005, then became Alcatel’s president and chief operations officer. Jean-Pascal joined Alcatel in 1999 as the deputy CFO and became CFO in January 2002. As members of the management committee we were both directly involved in improving processes and procedures once these matters were brought to its attention. An important part of the work was the compliance with the Sarbanes-Oxley standards, which Jean-Pascal personally led.
The SEC interviewed a number of Alcatel’s management team concluding that there was no improper action on the part of Alcatel’s management.
Throughout the five years in which the investigation took place, neither of us was contacted or questioned at any time by the SEC or the Department of Justice as we had no knowledge of and no bearing on the actions they were investigating. I did not raise the investigation of Alcatel-Lucent during my recruitment to NBN Co because it was resolved to the satisfaction of the SEC and Department of Justice well before NBN Co even existed.
It is regrettable that some media outlets have sought to misconstrue these events.
While the leader in the The Weekend Australian said it did not suggest any impropriety on our part, it nevertheless counselled its readers to “be afraid, be very afraid” that I did not advise the government before my appointment of the likely settlement by Alcatel, a settlement relating to events in which Jean-Pascal or I were never involved.
It is disappointing that our integrity has been questioned over these events and a distraction from the important job we have in designing and building the NBN.
Image credit: NBN Co
The Australian…there’s your problem right there…not exactly known for straight down the line reporting on political issues…
That’s for sure. In fact I’m surprised they’d publish his response at all, given their typically one sided negative reporting of anything related to the NBN.
Anyone know when the new editor of The Australian starts? Or if he has already?
Clive Mathieson has already moved from deputy editor to editor. Chris Mitchell still runs the show.
Quigley cuts through the bullshit once again. When this man speaks I always listen, as I have nothing but confidence in him and the incredibly tough job ahead of him. His integrity should not be in question at all, but I’m glad to see him set the record straight (even though I’m sure the usual anti-NBN crowd will find ways to contort and misrepresent his statements and paint him as guilty of not disclosing information).
Keep up the the great work Quigley. You’re the man!
It was a reasonable question to ask Mr Quigley as he was in a senior management position at Alcatel and perhaps could have been expected to know about those sorts of unlawful actions. Mr Quigley’s response is also reasonable. Matter closed unless any evidence comes to the surface!
How does he know whether he was under investigation or not. We only know one thing for sure and thats that the Labor Party didn’t investigate him.
perhaps my browser is broken but… that australian article lists no author?
Sure it does – immediately under the title…
*le sigh*
I really believe they picked the right man(Quigley) for the job of building the NBN. Say what you like about the whole project but this guy fills me with confidence every time I here him speak.
Well written, Mike.
It might be reasonable for us to think the Oz will let the BS drop now, and maybe you can get on with the job. But, this is the Australian…..
I just read the comments under The Austrollian’s version of this article. This was a mistake. So much stupid it hurts. :(
I really do believe a good 90% of the opposition to the NBN is based on a total misunderstanding of what it is, how it’s being built, and why it’s being built. It’s unfortunate that Labor have done such a poor job of selling their vision to the public.
And I really do believe that 90% of the Australians that are against the NBN do so because they think its a bad idea considering that such massive government projects always are
See how easy that was?
In any case, reality is what matters. Quigley may be a scapegoat, but that doesn’t make the massive flaws of the NBN go away
Massive infrastructure project are one of the reasons governments exist.
…. and fall.
Quick vote them out… “they are spending our money on us”… how dare they [sic].
How dare the Government spend my tax dollars on infrastructure. Next thing you know they’ll be wasting our money on roads, schools and hospitals! Bastards.
… shh don’t mention the insulation farce.
You mean that insulation in MY roof…YOU paid for with YOUR tax dollars…LOL
Yup, that same scheme which killed the insulation industry, wasted billions of dollars and even caused people to pass away as there was no regulation and people who (shouldn’t) have been an insulator got a job as one
Money is still tricking down as the current government has to now go through every roof to check if the previous insulation was installed properly
See what happens when governments get involved!
Yes and who fitted the insulation….
Ooh PRIVATE ENTERPRISE DID didn’t they?
The same private ent. YOU ideological conservative puppets want to gift $b’s in subsidies to to build our (oh no sorry THEIR as THEY will own it not us) NBN…?
Reasons not to, are obvious for anyone who isn’t a “young” or old Liberal!
Killed the insulation industry?
Haha…that’s a good one…so nobody puts insulation in houses at all now?
You do however realise the insulation scheme saw hundreds of “companies” who had no experience in insulation installation hire non-skilled workers to cash in on the government money, don’t you?
The two projects are in no way similar.
I understand the desperate attempts to try and distance the NBN Co from the Labor Government but the fact is the whole project is a political idea the fundamentals of which were hastily put together by Rudd and Conroy on a short plane trip.
The NBN Co a public service department funded by the taxpayer reports to Conroy The Minister for Broadband, Communications and the Digital Economy and his department.
Planned media events with Conroy with his NBN Co hard hat and his NBN Co Safety vest pulling fibre cable off NBN Co rolls into a trench indicate it is very much a Labor political baby.
Massive infrastructure project are one of the reasons governments used to exist.
Fixed!
Governments in most developed nations have stopped doing infrastructure projects the scale of the NBN (which is btw many factors larger then the snowy mountains scheme) since the 70/80’s, and for good reason!
Reasons are obvious for anyone that isn’t on the far left
Written, spoken and authorised by someone on the far right.
Im actually center
Far right would be leaving it all to the private industry and removing all regulation (ACCC, TIO) and whatnot
I am definitely not arguing that, nor is that my position
Who are you suggesting are “far left” then?
“And I really do believe that 90% of the Australians that are against the NBN do so because they think its a bad idea considering that such massive government projects always are”
So was it a bad idea for the government to build the telephone network? Or the railways? Or the national highways? I could go on.
I truly hope we haven’t reached the point where Australians believe that governments aren’t supposed to build stuff. Perhaps we’ve all been spoiled by the great public works built by our grandfathers, and now expect it to just “be there”. Sadly, it doesn’t work like that.
So was it a bad idea for the government to build the telephone network? Or the railways? Or the national highways? I could go on.
Its a question of magnitude. Of course people expect the government to fill in when the private industry has failed. Thats very different to the government building f**ken everywhere
No developed country has done this since the 70’s, Australia is the only country in the world that is re-nationalizing their fixed line internet industry.
The only time when such a scheme wouldn’t be considered crazy would be in soviet Russia
I truly hope we haven’t reached the point where Australians believe that governments aren’t supposed to build stuff. Perhaps we’ve all been spoiled by the great public works built by our grandfathers, and now expect it to just “be there”. Sadly, it doesn’t work like that.
Sadly it does, governments have a very bad habit of being inefficient and highly political, something that compounds even further the larger scale the project is
Oh and if you think we have been spoiled (and you are probably too young to remember this), when we had our telecommunications in the hands of a government monopoly (PMG telecom/telecom Australia), it was much worse then Telstra is now
So if you think Telstra is bad right now, you have no idea how bad the government owned monopoly was before it got sold
“The only time when such a scheme wouldn’t be considered crazy would be in soviet Russia”
So now building national infrastructure is seen as some sort of communist plot. I guess my point stands.
“when we had our telecommunications in the hands of a government monopoly (PMG telecom/telecom Australia), it was much worse then Telstra is now”
And yet that dreaded govt monopoly managed to build a modern telecommunications network to 99% of premises on a large and sparsely populated continent. A feat which has apparently become impossible in the last few decades, for reasons which you have failed to explain.
The NBN Co rollout is not providing Australia with communications for the first time, it is a fixed line infrastructure replacing PSTN voice, ADSL BB and BB HFC with a all fibre alternative.
It replaces those alternatives not because the alternatives don’t work anymore but by making sure residences don’t keep using those services by paying their corporate owners billions to switch them off.
That’s survival of the NBN FTTH on its cough-cough ‘technical merits’.
Sorry, what does that have to do with the government’s ability (or otherwise) to build infrastructure?
It has the same ‘ability or otherwise’ as in overseeing a insulation rollout or a school buildings program, the magic word ‘infrastructure’ doesn’t avoid the fact that the NBN rollout is run by a Government Department that holds the purse strings, and is a in your face blatant Labor political decision.
So, in summary, you have nothing to add to this discussion.
You don’t like the answer which doesn’t equate to ‘nothing to add to the discussion’ just because you say so.
So now building national infrastructure is seen as some sort of communist plot. I guess my point stands.
Do me a favor and stop moving the goalposts
http://en.wikipedia.org/wiki/Moving_the_goalposts
I am saying the NBN, NOT infrastructure building in general is something that would be considered crazy
A government overbuilding infrastructure nationally when there is a perfectly functional alternative, you can call a communist plot, and we are the ONLY country doing that
Stop picking out parts of my post which grab attention and ignore everything else
Yes it’s just the NBN they don’t like…
We can make all the common sense analogies to critical infrastructure like roads, hospitals, etc (both as social benefits and ROI – which the NBN will have, which the others primarily DO NOT – yet they still talk $…LOL)… but the NBN is a politically ideological “no, no”, to those on the far right (oops centre…LOL)!
Again the perfect analogy for copper to fibre is dirt roads to bitumen… bag that analogy all you like.. but you do so, simply because you know it is sound…
Did 3G over build CDMA too and we don’t/didn’t need 3G either? What about 4G/LTE, will it over build 3G…? What about CD’s overbuilding records and cassettes and then Mp3/4, etc over building CD’s…
They are technological improvements and whilst the far right (oops Centre) would like us to remain in the 50’s… sorry!
deteego, while ever you need to use expletives in place of common sense and facts, no one will ever take you seriously…
But…
Yes you are right when you say – “… (you are probably too young to remember this), when we had our telecommunications in the hands of a government monopoly (PMG telecom/telecom Australia), it was much worse then Telstra is now”! {END}
Coming from someone who is 21/22 years old, who has only ever been at school, is a hypocritical joke.
You are simply repeating whatever it is you have been spoon-fed because seriously, how would you know?
It’s a question of magnitude…
Small hospitals and tiny roads are ok… apparently…
And of course, what ever the Coalition says in relation to comms… good boy!
+1 Jeremy…
The Libs are killing them at the game of politics…!
I’m just wonder how the libs are going to get the budget into surplus without anymore infrastructure to sell off.
I am sure SingTel and Telstra will give them a few $$ when the Coalition sell off the NBN in 2013-2014.
They’ll just stop paying alain…!
The Australian and Turnball isnt making any headway in attacking the NBN so they have resorted to attacking its personnel. Talking about low blowing.
Australia NEEDs the NBN we dont NEED the australian or Turnball.
The current telecom copper infrastructure is failing badly and hopefully the NBN can be up and running before it collapses.
The Telstra experiment has been a very expensive failure.
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