Michael Quigley and US court records at odds

A HOST of public claims made by NBN chief Michael Quigley about French Telco giant Alcatel-Lucent are different from allegations made in US court documents.

A HOST of public claims made by National Broadband Network chief Michael Quigley about French Telco giant Alcatel-Lucent, of which he was formerly president, are different from allegations made in court documents filed by US authorities and a telco stung by Alcatel's corruption.

Mr Quigley, who spent 36 years with Alcatel and was the group's global president and chief operating officer in 2005 and 2006, has said that as soon as Alcatel's executive committee became aware of corrupt activities associated with the group it launched an investigation and "took immediate steps to inform and co-operate with all authorities".

In legal documents filed in a Florida court, the US corporate watchdog, the US Securities and Exchange Commission, says Alcatel kept paying bribes to sham consultants for more than 18 months after executive members became aware of the payments.

The SEC says that, even though Alcatel's executive committee knew in October 2004 that Alcatel employees had "paid bribes at the highest level of the Costa Rican government using sham consultants", which was "widely covered by the local press", Alcatel "continued to make these illicit payments until June 2006".

In response to a series of questions put to him yesterday by The Australian, Mr Quigley said: "I reiterate my previous statement that in the course of their thorough investigation, the Securities and Exchange Commission and the US Department of Justice never once sought to question, interview or contact me."

Mr Quigley last week suggested Alcatel's problems were primarily associated with two employees and likened Alcatel's problems to a "rogue transaction".

The US government filings allege that Alcatel affiliates bribed officials in at least 10 countries.

In December, Alcatel agreed to pay a fine of $US137m after US authorities the SEC and the US Department of Justice found the group had bribed officials in Costa Rica, Honduras and Taiwan.

Under the agreement - which is yet to be approved by the US District Court of Florida - Alcatel would be spared from ongoing investigation and the risk of criminal prosecution in exchange for making the $US137m payment to the US government.

The Australian can now reveal Costa Rica's government-owned telecommunications provider Instituto Costarricense de Electricidad, which was stung by Alcatel's corrupt activity, is requesting that plea agreement not be accepted by the court.

ICE says that as it was the victim of Alcatel's illegal actions, which it estimates caused it losses in the hundreds of millions of dollars, and as such it should be entitled to restitution.

Alcatel's history of corruption has come into sharp focus since The Australian late last month revealed the federal government was unaware of the SEC investigation into Alcatel before it appointed Mr Quigley to head up the NBN.

Mr Quigley has said he did not inform the government of the investigation into Alcatel because he was not investigated by the US authorities and so did not believe it was relevant.

There is no suggestion or any evidence that Mr Quigley was aware of any of the activities that are the subject of the SEC investigation.

The federal government has said: "Mr Quigley . . . did not declare the investigation at the time of appointment to NBN Co as (he was not) questioned as part of the investigation."

Mr Quigley has made a range of statements different from allegations made by the SEC in its December filing.

Of the Alcatel corruption, he has said: "It is not easy to spot a rogue transaction in a company of 60,000 employees working in more than 130 countries".

The SEC says: "Alcatel failed to detect or investigate numerous red flags which suggested its business consultants were likely making illicit payments and gifts to government officials at the direction of certain Alcatel employees."

Mr Quigley last week publicly said the SEC interviewed a number of Alcatel's management team, concluding that there was "no improper action on the part of Alcatel's management".

However, the SEC's court filings are different to that claim.

Mr Quigley has claimed Alcatel rectified its problems to the satisfaction of the US authorities. However, as recently as December the SEC said it was concerned Alcatel would continue to break the law.