“I am so shocked. I want to vomit. I cannot believe we were this stupid,” read the message to Jon Waldron on December 17, 2014.
Seven days later, on Christmas Eve, 2014, Waldron and the manager who sent that message were dismissed from the Commonwealth Bank of Australia after internal investigators discovered mystery payments into Waldron’s CBA account.
Former Commowealth Bank manager Jon Waldron was found guilty of taking bribes from a US-based technology company.Credit: Cole Bennetts
The New Zealand-born Waldron, former general manager of IT infrastructure engineering at the bank, was found guilty last week by a NSW District Court judge of taking bribes, or seven counts of corruptly receiving money as a reward for facilitating business opportunities with the bank.
He was also found guilty of three counts of aiding and abetting a co-accused to receive bribes.
The payments
Waldron’s trial heard that ServiceMesh Inc, a California-based cloud computing startup, supplied software services to the bank from 2009.
The Crown alleged the principal shareholder of ServiceMesh, Eric Pulier, paid more than $US2 million to Waldron and an IT executive manager at CBA in 2014 as a reward for smoothing the path for ServiceMesh to ink two deals with the bank, in 2013 and 2014. Pulier has denied wrongdoing.
Waldron received the lion’s share of the money, the court heard, and the payments were received without the Commonwealth Bank’s knowledge.
“$$landed,” Waldron wrote in a text message to a ServiceMesh sales consultant on April 13, 2014, after meeting Pulier in Santa Monica on April 11.
The court heard this message was sent before the first payment of $US99,971.02 ($104,648.82 at the time) was transferred to Waldron’s CBA account on May 16, 2014.
The prosecution alleged the CBA contracts were important to ServiceMesh because the New York Stock Exchange-listed Computer Sciences Corporation had agreed in October 2013 to buy the company.
Under that agreement, ServiceMesh shareholders stood to receive an additional payment totalling tens of millions of dollars if the company achieved revenue exceeding $US20 million between January 1, 2013, and January 31, 2014.
“Without both deals, SMI would not have surpassed revenue of US$20 million in the time frame provided,” District Court Judge Phillip Mahony said in a judgment on May 8.
“With the revenue from the two deals SMI became entitled to a further payment of over US$98 million.”
‘I want this sorted ASAP’
The court heard Waldron sent an email on December 17, 2013, applying pressure to CBA’s manager of software services over the first of the two ServiceMesh deals, which was finalised days later on December 22.
Waldron wrote that the “commercial sense has already been verified”, and the executive manager of IT engineering “and I want this sorted ASAP within the next 48 hours”.
THE BRIBES
The NSW District Court found Waldron corruptly received the following payments in 2014 in his CBA or ASB Bank accounts:
- May: $US99,971.02
- July: $US199,980.26
- August: $US299,980.40
- November: $US300,000
- November: $US300,000
- December: $US350,000
- December: $US350,000
Marcus Nicholson, the manager who received the email, specialised in software licensing. He sent an email the next day to his boss, suggesting Waldron’s email “could be construed as intimidation”.
Nicholson wrote that the “total value of this deal is $10.5 million over three years” and noted CBA was being asked to pay $3.3 million more than a previous proposal – a deal that had been rejected as too expensive.
Waldron’s evidence
Waldron maintained his innocence and pleaded not guilty to the charges. He gave evidence that he “received payments for work done and for work to be done”, the judge said.
The court heard Waldron emailed his wife on December 21, 2013, and wrote: “By the way, confirmed: $1.5 million.”
He gave evidence that was a reference to “how much money I could make for two years” at a job in Europe, an explanation the judge rejected.
The court heard that the payments to Waldron were discovered after an initial investigation was launched into his use of a corporate credit card.
“It was a requirement of his employment contract that he had an account with the CBA and a condition of employment that the bank was able to look at CBA accounts held by its employees,” the judge said.
Sentence hearing
The court will hear submissions on sentence on August 14.
A CBA spokesperson said in a statement that the bank “had referred the relevant matters to the NSW Police in early 2015”.
“Since that time, we have co-operated with the police and authorities throughout their investigations and throughout the court process.”
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