Poison words: Turnbull + NBN board go to war

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news The fraught relationship between the board of the National Broadband Network Company and Shadow Communications Minister Malcolm Turnbull has spilled into the public, with a series of sharply antagonistic letters between the two parties being published that highlight the depth of the antagonism felt on each side.

Over the past several months, Turnbull has been open about his opinion that NBN Co chairman Siobhan McKenna — who took over the role in March from incumbent Harrison Young in March — may not be the right executive for the job and that NBN Co’s board in general lacks relevant experience.

“The only observation I’ve made is that it is remarkable that such a large board doesn’t have anyone with hands-on experience in building a telecommunications network or running one and if you were assembling a board, for a project of this kind, that’s the sort of experience you would want to have on it,” Turnbull said on Sunday on the Financial Review’s Sunday television program. Turnbull has also promised various audits and reviews into NBN Co’s governance, if the Coalition wins power at the upcoming Federal Election — reviews which would be likely to touch on the board’s role in key decisions made at NBN Co.

In response, NBN Co’s board under McKenna — whose full-time role sees the executive employed as the managing director of the Illyria media investment company which is backed by Lachlan Murdoch — has taken several dramatic steps which appear aimed at protecting its operations.

For example, last week the Financial Review reported that the board had hired lobbying firm Bespoke Approach to lobby the Coalition about NBN Co’s progress. The firm boasts former Foreign Minister and Leader of the Opposition Alexander Downer, ex-Hawke and Keating Minister Nick Bolkus and former senior Liberal party staff Ian Smith on its staff roster, as well as former Northern Territory Chief Minister Paul Henderson. The move spurred Turnbull to file a Freedom of Information request with NBN Co seeking details of the arrangement.

This morning Turnbull published a letter which McKenna had sent Turnbull last week in response to his FoI request. It is believed the letter was copied to NBN Co’s stakeholder ministers, Communications Minister Anthony Albanese and Finance Minister Penny Wong.

“Non-executive Directors have been told directly and indirectly by members of the opposition that they can expect a Judicial Enquiry investigating their governance post-election,” wrote McKenna in the letter. “The Non-executive Directors naturally sought to engage independent legal counsel on this matter, which they have a right to do, and appointed Herbert Smith Freehills. It is not unusual for company directors faced with threats to exercise their right to appoint external advisers.”

“Indeed in the circumstances it would be most unusual for the directors not to seek to do so. Given the governmental nature of the matter, Herbert Smith Freehills have engaged Bespoke Approach.”

The letter provoked an antagonistic letter from Turnbull to McKenna, which Turnbull has also published in full. The Liberal MP wrote: “I struggle to see how the interests of the NBN Co, or its shareholder, are served by the engagement of a lobbyist to promote the abilities and achievements of the directors or indeed by the engagement of a law firm to advise directors on the possibility of a possible future government conducting an inquiry into the governance of the NBN Co.”

“I am surprised that you would refer in your letter to the prospect of a judicial inquiry into, inter alia, the governance of the NBN Co as a “threat” communicated to you and other directors by members of the Opposition.

“It is an unusual choice of language. Accountability is not normally regarded as a threat. And in any event, the plan to conduct a forensic audit dealing with, inter alia, the governance of the NBN Co is a key element in the Coalition’s NBN Policy which was published in April. You didn’t need to speak to a member of the Coalition to find out about it – a brief study of the policy or the press reports would suffice. You should note that the Coalition’s policy does not prescribe a judicial inquiry as the means of conducting such an audit.”

Turnbull said Bespoke was actively seeking meetings on behalf of McKenna with Coalition MPs, “in the manner of a lobbyist”, with the lobbying firm’s brief being “to make sure the chair’s role is understood, the board is regarded as able and that it is reflected that she and the board would serve any government of the day if required.”

The Liberal MP questioned whether McKenna was seeking to use the lobbyist firm to influence the composition or terms of reference of any inquiry which a Coalition Government might call into BN Co, or even to convince the Coalition that no forensic audit was required of NBN Co’s governance practices.

“Do you think it is appropriate that the Board of a government business enterprise employ a lobbyist to impress on the Opposition that its board is able?” Turnbull asked. “You will understand that it is very difficult not to see this exercise as part of an effort to secure re-appointment in the event of a change of government. That being the case, should not the cost of this engagement be borne by the directors, rather than by the NBN Co? Are you not concerned that you may be confusing your own interests and advantage with your fiduciary duty to the NBN Co?”

Turnbull also noted he was concerned by comments made by NBN Co chief executive Mike Quigley — who also sits on NBN Co’s board — that he was not aware of Bespoke’s appointment.

“Given Mr Quigley is a member of the Board, how was the decision taken to engage Herbert Smith Freehills and Bespoke?” Turnbull asked. “Was it taken at a board meeting in the absence of Mr Quigley? And if so, why? If the concern was protecting the directors from a post election inquiry, would not Mr Quigley have an interest in receiving advice on that as well?”

My extended opinion/analysis on this situation appears in Delimiter 2.0.

Image credit: J Miller, royalty free

44 COMMENTS

    • Cheers. I’ve done a lot of background research on this situation this morning; I hope to be able to provide a different perspective on the situation than the poison currently out there ;)

      • I look forward to your analysis. Congratulations on Delimiter 2.0. I look forward to some intelligent debate on the issues.

  1. Poor Malcolm…

    With a pitifully distant second policy, best he can do is try to avoid the issues by picking fights with any and everyone at NBNCo…

    Nice work MT *sigh*

  2. Turnbull seems to be overstepping his bounds. He is not in the Communications Minister, he is not in the Governing party. Really, he has no say in NBNCo at all. He is just being a bully and threatening them. Is what he doing even legal?

  3. I tried to engage Turnbull on this on Twitter (I usually get a reply when I’m civil) but he wouldn’t when I suggested the reason she & board felt threatened was because HE threatened them….multiple times.

    This is unfortunately just playing into Turnbull’s hands. The board should take a page from Quigley’s book and just ignore Turnbull’s parrotting until/if they have to actually listen to him.

  4. Sadly, he has a point. Of all the people leaving NBN could we please have Conroy & Quigley back and lose McKenna? Government advocacy has been p***weak with Albo and it seems Husic isn’t up to it either…

      • isn’t it virtually the same with every govt dept., govt changes, the staff change too. why should nbnco feel different?

  5. Well well.. the knives were out for Quigley and now the board.. Did mt really think that they would roll over and play ball his way..?

  6. For me it just shows how low the dog will go to try and score a political point.

    Mal you sir are a fuckwit.

    • +1 for me too!

      Malcolm you have officially transitioned from the gutter to the sewage mains, congratulations!

    • +1

      The only way he has any point to make in this, is if the board used NBNCo funds.

      Considering Quigley didn’t know about it, and is on the board, I’m thinking some board members might be paying for it themselves. If that is the case, this is like a redux of the whole “Utegate” debacle.

  7. The problem is that the toxicity will permeate the whole organization. If there *is* a change of government, MT could well end up inheriting a poisoned chalice.

    Antagonistic board and staff. Low morale. Long-term public vilification. Promises of major re-organisation and upheaval. And then he wants to push them to perform much better than they have been doing thus far.

    MT may well reap what he has sown and the country will suffer as a consequence.

    • Why is the organization toxic?

      “Antagonistic board and staff. Low morale”
      Yet their turnover is half that of the Australia IT secotr average? That doesn’t add up.
      I have several ex work mates in NBNCo, they haven’t noticed this toxic environment.

      “Long-term public vilification”
      Well, let’s be honest, long term Opposition party vilification. The public has said stuff all but they are in favour of it.

      “And then he wants to push them to perform much better than they have been doing thus far”
      To be fair, what he needs is the contractors to perform better than they have thus far.

      “MT may well reap what he has sown and the country will suffer as a consequence.”
      The people I know within NBNCo are waiting to see what happens with change of government. It’s not like any of them couldn’t just walk into another job. Why stick around for someone to make your life hell for political reasons?

      • “Why is the organization toxic?”

        If that’s how my post read I apologize. I meant the relationship would be toxic. I was not making a comment on NBNCo.

        If your new minister is someone who has done nothing but berate your senior staff and all of your organizations efforts for the last 3-4 years, it cannot bode well.

      • To be fair, what he needs is the contractors to perform better than they have thus far.

        +1000 to that. I hope that if Malcolm does get in, he stops acting as stupid as he has been, he’s basically letting all the real culprits (the contractors, Telstra, et al) off the hook by perusing a witch-hunt against NBNCo.

    • I have several friends working for NBN Co and I can assure you morale is not low, in fact they love what they do and tell me the company has a great and vibrant culture!

  8. Typo in paragraph 13, BN Co should be NBN Co :-)

    My 2c – there’s a big difference between an impartial, disinterested performance audit or review and an audit conducted by a hostile party. There are plenty of decisions one can make in management that come down to individual perspective and the results of which may not be apparent until sometime down the line when numerous plans and activities have fallen into place. It would be simple to pick holes in any management style or decision process or misrepresent or misinterpret decisions or even the results of decisions to come out unfavourably against those being audited. It is disingenuous for Turnbull to downplay the implications of the threats implicit in LNP hostility to the NBN Co and it’s board in this dismissive manner, using his feigned innocence as a lever to attempt to make the board appear guilty merely through their quite reasonable activities trying to ascertain their legal standing and probe the LNP to determine the extent of their outwardly demonstrated hostility. These are bullying tactics – demonstrate overt hostility and implicit threats and then feign surprise and innocence when the victim attempts to defend themselves, undermining their credibility and stability to knockers and thus their own confidence, leading to slower defensive responses in future due to confusion, not wishing to appear overly defensive or even hostile themselves and even wishing to seem reasonable and willing to accept the possibility that they may have overreacted and misjudged the bully. Classic bully psychology and interesting (intellectually) to see it play out at this level, but also reprehensible and one more reason Turnbull should never be allowed into public office – he is morally deficient and prepared to hurt or crush anyone if it will give him even a perceived advantage.

    • “These are bullying tactics – demonstrate overt hostility and implicit threats and then feign surprise and innocence when the victim attempts to defend themselves, undermining their credibility and stability to knockers and thus their own confidence, leading to slower defensive responses in future due to confusion, not wishing to appear overly defensive or even hostile themselves and even wishing to seem reasonable and willing to accept the possibility that they may have overreacted and misjudged the bully. Classic bully psychology and interesting (intellectually) to see it play out at this level, but also reprehensible and one more reason Turnbull should never be allowed into public office – he is morally deficient and prepared to hurt or crush anyone if it will give him even a perceived advantage.”

      The exact reason why MT has fallen from grace in my eyes. Some may say this is just politics but it isn’t tolerated in other parts of society. I cannot personally support anybody who behaves in such a way.

  9. This round is to Malcolm.
    All he has done is raise questions (he currently has no other power) and Mckenna & co have reacted extremely poorly with grasping for outside help, behaving fearfully and in a panic.
    These are not actions which inspire confidence in the NBN board

      • This “threat” is ALWAYS there in govt organisations.
        Malcolm is prodding and poking in the hope that it will highlight problems with the board and it worked.
        A good response would have been a polite one but instead, they panicked.

    • Turnbull has done his best to assassinate the character of a good man who came out of retirement to spearhead a massive national infrastructure undertaking AND donated his first years salary to charity, but now that Quigley has resigned, he’s turned his sights on the rest of the NBN board.

      Just like Abbott, Turnbull will do anything to get into power. They are both scum.

      • Scum of the highest order.

        Bring on the election Kev so we can send these tossers a clear message.

      • I think they’ll all “do anything to get into power”.

        It’ll be our “job” as voters to pick which self-serving policies are better for us as a society ;o)

    • He couched threats in the style of questions, and succeeded in spooking the NBNco board into acting in a way that was favourable to his agenda while managing to appear blameless. So I agree. This round goes to Malcolm, the snake. I both admire his cunning and loathe his lack of integrity.

  10. The image accurately represents both parties to this exchange.

    Though because I have come to disrespect MT his response irks me most. I simply don’t know McKenna or any other nbn board member for their comments to make any difference.

    They both sound like children, and MT is the only one with a reputation to dent.

  11. Turnbull’s been talking about a cost benefit analysis, greater transparency, and running audits for ages. They’re not threats, they’re promises, from a person with a lot of business nous.

    Why would they [NBN Co board] feel threatened? They get paid a lot of money to make critical business strategy decisions, that’s their job. If not held accountable for those decisions why are the salaries so high? What do they do that ensures they’re paid so much more than say an ambulance paramedic whose decisions can mean the difference between life and death?

    Nothing wrong with holding people accountable if it’s their job to make good decisions. Anybody half competent would plan for delays such as those that made them drop their June 30 rollout targets to 15% of the original number, but we pat them on the back and say “great job, your strategy didn’t run on time or on budget but hey, you did your best and that’s what makes your time worth so much.”

    • I doubt anyone here would be upset with a CBA and greater transparency at NBNco, despite the fact that there is probably greater trasparency with them than any other public infrastructure project in the history of this country.

      The threat made to Quigley and the Board is not from auditing and reviews, but rather the way they have been promised to be implemented. MT has relentlessly accussed the board and executive of being inexperienced and woefully inept at running a project of this size. This coupled with the “management tools” above is certainly a threat, not just to the directors positions on the company but also their professional careers.

      MT will set the terms of reference for any increased scrutiny and he has already made up his mind as to what the outcome will be.

  12. My Delimiter 2.0 article on this subject is up:

    http://delimiter2.com.au/breaking-the-rules-how-nbn-cos-spat-with-turnbull-breaches-all-convention/

    First par:

    “Under extreme provocation by a hostile Opposition, the National Broadband Network Company appears to have broken convention and possibly regulations regarding the behaviour of government business enterprises. The question now is: How will its shareholder ministers deal with its clearly aberrant behaviour?”

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