Labor has flagged that its senators will question NBN Co CEO Bill Morrow about a US lawsuit against the US utilities company Pacific Gas & Electricity (PG&E) Morrow ran between 2006 and 2008 in Budget Estimates this week.
The Guardian on Friday night reported that Morrow was named along with 21 other former PG&E executives in a lawsuit from shareholders against the company and its management over safety handling for its pipelines in the US. The company is accused of putting profits ahead of safety, after there were two explosions in California and San Bruno after Morrow had left the company.
A report into one of the explosions alleged that PG&E had diverted US$100 million from safety and pipeline maintence over 15 years.
The complaint (PDF) made against Morrow alleges that he served as an executive in the company when PG&E was "grossly underspending on operational and process safety, creating a situation where a catastrophic incident was not only possible, but highly likely."
It alleges that Morrow was responsible for implementing a risk management system and ensuring there was an adequate budget for the safety of PG&E's employees. The complaint alleges that Morrow is liable to PG&E for a "breach of his fiduciary duties to the company".
The lawsuit against Morrow's former company comes as the chief executive is due to front Budget Estimates hearings on Thursday this week. ZDNet understands that Labor senators are likely to probe Morrow on his time at the company during that hearing, but will not question Communications Minister Malcolm Turnbull on Morrow's appointment as CEO of NBN Co during Question Time this week.
Turnbull's office has indicated that the government was fully aware of the potential lawsuit when Morrow was vetted for the CEO role at NBN Co.
A spokesperson for NBN Co said that Morrow was aware of the suit, and it had been addressed by the NBN Co board and government prior to his employment at NBN Co.
"Mr Morrow openly canvassed these matters with both the NBN Co Board and the Government during the recruitment process for the role at NBN Co. Mr Morrow left PG&E to return to the telecommunications industry," the spokesperson said.
"Mr Morrow has not been called to give evidence. Whether or not this occurs is a matter for the US Courts. This was a tragic accident which caused a great deal of pain to many people. The safety of workers and communities has always been Mr Morrow’s paramount concern."
All other questions have been referred to PG&E.
The incident is likely to be reminiscent of when Turnbull was shadow communications minister in 2011 andover allegations of bribery at his time at Alcatel Lucent.
"I think Mr Quigley's got quite a bit of explaining to do and he really needs to actually put all of the facts on the table," Turnbull said at the time.
He accused the government at the time of "incredible incompetence" in not making the details of the claims public knowledge.
"I think it shows incredible incompetence. You really wouldn’t have had to hire a top head-hunter to find that out. A bit of googling, a few inquiries, would have led you to that conclusion," he said at the time.
Quigley then faced lengthy, and at times heated questioning from Coalition senators, while the then-Labor government complained that the opposition was engaged in a "political smear campaign."