Alcatel corruption was 'almost institutionalised'

CORRUPTION at telco giant Alcatel was "almost institutionalised" in Kenya and Taiwan, according to a former company executive.

CORRUPTION at telco giant Alcatel, the company at which the National Broadband Network chief Michael Quigley was a senior executive, was "almost institutionalised" in Kenya and Taiwan, according to a former company executive.

In US court documents obtained by The Australian, a French executive of Alcatel, who allegedly spent 20 years with the organisation and was in charge of its operations in Kenya and Taiwan, says that in those two countries "as well as in a lot of other countries" corruption was endemic.

"We had training sessions, consulting sessions and procedures to implement those corruption activities (in Kenya and Taiwan)," the executive told a US court as part of the US government's investigations into Alcatel.

The federal government yesterday held a ceremony to connect the northeast NSW community of Armidale -- the first mainland community to receive NBN services -- to the network.

Facing questions amid the growing Alcatel scandal, Communications Minister Stephen Conroy yesterday accused "sections of the media" of running a "smear campaign" against Mr Quigley. "Mike Quigley is the victim of a smear campaign by the opposition and some sections of the media," Senator Conroy told Sky News.

Yesterday Senator Conroy, who has refused to be interviewed by The Australian, repeated suggestions made by the federal government and Mr Quigley that corruption at Alcatel was principally an issue involving "two rogue employees". "So Mr Quigley has no case to answer here," Senator Conroy said.

As previously revealed, US Department of Justice filings, which are not contested by Alcatel, show endemic corruption at Alcatel.

That corruption spanned at least nine countries and much of it occurred between 1999 and 2006.

Among those nine countries are Taiwan and Kenya, where the former Alcatel executive Mr Benoist (whose first name is not reported in court documents) was "country senior officer" for each country up to 2003.

Alcatel Lucent declined to comment specifically on Mr Benoist's statements concerning the former widespread corruption within the group, citing a deal with US authorities where it would pay a $137 million penalty for the corruption that has been detailed in the US DoJ and US Securities and Exchange Commission filings.

"We take responsibility for and regret what happened at that time and have implemented policies and procedures to prevent these violations from happening again," a spokesman said in response to written questions from The Australian. There is no suggestion Mr Quigley was involved in the corruption at Alcatel.

On Monday Mr Quigley "unreservedly apologised' for having incorrectly publicly stated he was not responsible for overseeing Alcatel's operations in Costa Rica, where employees paid millions of dollars in bribes to officials.

Last week NBN Co put out a press release confirming Mr Quigley was responsible for Costa Rica after The Australian presented NBN Co with publicly available Alcatel documents that proved Mr Quigley had been principal of Alcatel Americas and, as such, Costa Rica.

Senator Conroy yesterday incorrectly suggested Mr Quigley had provided that information voluntarily.