NBN Co chief executive Bill Morrow may not have had much to say at the Senate estimates hearing into NBN Co about the legal action he’s embroiled in over in the US, but the former Vodafone Australia boss has clarified his position to NBN Co employees and along the way has realised the depth of scrutiny he and his cohorts are under.
The legal trouble emanates from Morrow’s time as an executive at the US utility Pacific Gas & Electric Company (PG&E). Morrow had a two-year tenure at the California-based utility, starting in 2006, and the lawsuit centres on two incidents that occurred, in San Bruno and Rancho Cordova, after his departure.
Morrow adds in his letter to NBN Co employees that the current legal action relates to the San Bruno accident and includes what is known in the US as “shareholder derivative lawsuits”, which typically name all senior officers and directors of the company involved. Needless to say, Morrow’s name is on that list of some 20 executives currently being chased by PG&E shareholders.
So, what impact do the legal wrangles in the US have on the National Broadband Network (NBN)?
Not a great deal, because the NBN project has enough immediate challenges that it needs to contend with anyway -- challenges that may well put Morrow and his cohorts in hot water.
The PG&E lawsuit will be nothing more than a political sideshow, akin to what NBN Co’s former chief executive Mike Quigley was subjected to in 2011 over bribery allegations.
Back then it was shadow communications minister Malcolm Turnbull who drove home the attack, haranguing Quigley to own up to a couple of injudicious comments.
The Quigley bribery sideshow essentially hijacked the NBN debate and Labor had to concede it was unaware that Alcatel-Lucent was subject to a five-year bribery investigation by the US Securities and Exchange Commission.
Morrow contends that the Coalition government hasn’t been guilty of the same lack of foresight, saying that the NBN Co board and the Coalition government had been kept abreast of the PG&E issue during the recruitment process.
“A question that has been asked is whether I raised these issues with the board of NBN Co and the government as I was preparing to join the company. This I did during the recruitment process,” Morrow told NBN Co employees in an internal memo.
“The articles also make reference to action by the US government against PG&E. I was not named in that matter and the company has denied that any PG&E employee knowingly violated any relevant federal US law.”
As a point of comparison, here’s what Mike Quigley had to say in 2011:
“Some in the media have 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. 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.”
The Coalition successfully used the Alactel-Lucent issue to harass NBN Co in an ultimately useless witch hunt, and Labor -- especially Senator Stephen Conroy -- will no doubt strive to return the favour.
The exercise will have little bearing on what happens to the NBN process other than simply highlight how nefarious politicking has ended up hurting the project. As for Labor, there’s considerably more traction to be had by turning the screws on more serious matters -- the Telstra-NBN negotiations, the tenuous economic viability of the NBN under the Coalition’s multi-technology mix, and an arduous construction challenge.
The task of prosecuting that case rightfully belongs to current shadow communications minister Jason Clare and his able deputy Michelle Rowland, despite the overbearing presence of Stephen Conroy.
The PG&E issue has at the very least dispelled any illusions Bill Morrow would have harboured about how nasty things can get in the NBN world.
Morrow has told NBN Co staff that he is “quickly realising how much of a microscope we are operating under,” and that the scrutiny is welcome. Well, there’s going to be a lot more of that and it’s not going to be pretty.