Turnbull probes NBN Co board on lobbying

Shadow Communications Minister Malcolm Turnbull has been told by NBN Co board chairwoman Siobhan McKenna that the board hired a lobbyist based on comments made by the Coalition about the board's future under a Coalition government.

As recently as last Friday, when NBN Co CEO Mike Quigley announced that he would step down as CEO when a replacement is found, Turnbull questioned the qualifications of the board and McKenna as chairwoman, stating that McKenna herself had no prior experience in working in an organisation such as NBN Co.

Last week, it was reported that the board had hired lobbying firm Bespoke Approach, which includes former foreign affairs minister and Liberal MP Alexander Downer as one of its advisers, to improve its standing among Coalition MPs in the event that there is a change of government. On Financial Review Sunday, Turnbull questioned why McKenna had felt the need to hire the lobbyist.

"Now the question that Siobhan McKenna and the directors have to answer is whether this investment in Bespoke, to go out and lobby for the — promote the virtues and talents and accomplishments of the directors as distinct from the company, whether that is really rather more in the director's interest than it is in the interest of the company as a whole," he said.

According to a post on his website this morning, Turnbull sought under Freedom of Information (FOI) access to documents around the board's decision to hire Bespoke, and in a letter to Turnbull from McKenna on Friday, McKenna said that Bespoke was hired after the Coalition made comments about the board's future under a potential Coalition government.

"Non-executive directors have been told directly and indirectly by members of the opposition that they can expect a judicial enquiry investigating their governance post-election," she said.

"The non-executive directors naturally sought to engage independent legal counsel on this matter, which they have a right to do, and appointed Herbert Smith Freehills. It is not unusual for company directors faced with threats to exercise their right to appoint external advisers. Indeed, in the circumstances, it would be most unusual for the directors not to seek to do so.

"Given the governmental nature of the matter, Herbert Smith Freehills have engaged Bespoke Approach."

In Turnbull's response, also published in his post this morning, Turnbull said that he struggles to see how the interests of NBN Co or the government are served by engaging Bespoke.

"I am surprised that you would refer in your letter to the prospect of a judicial inquiry into, inter alia, the governance of the NBN Co as a 'threat' communicated to you and other directors by members of the opposition," he said.

"It is an unusual choice of language. Accountability is not normally regarded as a threat. And in any event, the plan to conduct a forensic audit dealing with, inter alia, the governance of the NBN Co is a key element in the Coalition's NBN Policy which was published in April."

Turnbull suggested that Bespoke has already begun approaching Coalition MPs seeking to arrange a meeting with McKenna, and he again questioned how this was in the interest of NBN Co.

"Bespoke is actively seeking meetings on your behalf in the manner of a lobbyist," he said. "You have never had any difficulty arranging meetings with me, and we have discussed the NBN and your role as a director on several occasions.

Turnbull suggested that a law firm has been hired as the middleman between NBN Co and Bespoke in order to ensure that communications with Bespoke are covered by legal privilege.

"One could be forgiven for thinking that using a law firm to retain Bespoke (as opposed to NBN Co or yourself retaining Bespoke directly) was in order to claim that communications with Bespoke are covered by legal professional privilege. Is that the case?"

The shadow minister asked McKenna whether the cost of hiring Bespoke should lie with the board, rather than NBN Co.

No response from McKenna has so far been released.

ZDNet was referred back to McKenna's letter when further comment was sought from NBN Co.