Saturday, 18 June 2016 13:29

Yes, I did take a bribe! Featured

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Former Commonwealth Bank (CBA) IT executive Keith Hunter has pleaded guilty to bribery/kickbacks in a case that has two sides to it – did CBA get the best outcome and just how much does this represent a tip of the iceberg culture?

Hunter, formerly CBA’s head of IT operations and in charge of an annual expense budget exceeding $1.5 billion, and New Zealand colleague Jon Waldron, were charged early last year with several counts of bribery – allegedly more than US$2 million (nearly AU$3M) on a US$10.5M contract awarded to ServiceMesh.

At the time, ServiceMesh founder Eric Pulier, a high-flying, serial technology entrepreneur, was suspended by his employer Computer Services Corporation (CSC). ServiceMesh was acquired by CSC in October 2013 for US$260M, and the ongoing use of the name relates to its "ServiceMesh Agility Platform". Pulier was vice-president of CSC and global head of its cloud operations.

Puller was accused of setting up a phony charity to channel kickbacks in return for a contract that in turn boosted the value of ServiceMesh before its acquisition by CSC. There is no intimation that CSC acted improperly in any way – apart from perhaps not seeing this during its extensive due diligence stage before buying ServiceMesh.

The case reads like a comedy novel – Hunter passing off false documents to claim he worked for the charity and others to cover the deposits made in a New Zealand CBA bank account.

Fraud and Cybercrime Squad commander detective superintendent Arthur Katsogiannis said at the time, "It's a very serious offence. From my experience in criminal matters, these two individuals are probably the most senior executives that have been caught out for this particular offence."

Asked during a media conference if it was a "blunder" by the men to store the funds at the bank where they were working, Katsogiannis said: "What do you think?"

The long arm of the law moves slowly in corporate fraud – Hunter will be formally sentenced in December and Waldron will appear at a hearing in July.

Pulier’s lawyers have released a statement claiming the guilty plea had been brought about through Australian “government pressure”.

According to BreakingNewsSi  the statement says, “Mr Hunter has consistently maintained his innocence, and Mr Hunter has repeatedly stated that he always acted in the best interests of his employer and that the payments he received were compensation for work he was undertaking for the ACE Foundation. Unfortunately, the Australian government’s unethical investigation of Mr Hunter — which has been characterised by leaks of inaccurate, self-serving information — has bankrupted and broken Mr Hunter, apparently leaving him with no choice but to capitulate to the Australian government’s demands.”

Pulier — a one-time adviser to former US vice-president Al Gore — is also the subject of an FBI investigation and is being sued for millions of dollars by CSC.

Then there is the reputational damage to CBA, CSC and more.

Did CBA get its money’s worth?

Reporting on this matter has been mysteriously absent. What goods or services was the contract for? Was it a competitive tender? Was there any collusion between ServiceMesh and competitors? These and many more questions need to be asked if only to prove the probity by the bank. Unfortunately, the news is littered with fines for collusion, bribery and more – makes me think that in larger IT contracts there needs to be more scrutiny.

The bribe allegedly relates to a US$10.5M contract but, in various documents seen by iTWire, this was only the part of "tens of millions" spent with ServiceMesh and later CSC. Hunter was also responsible for using SeviceMesh in his previous position at Visa.

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Ray Shaw

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Ray Shaw ray@im.com.au  has a passion for IT ever since building his first computer in 1980. He is a qualified journalist, hosted a consumer IT based radio program on ABC radio for 10 years, has developed world leading software for the events industry and is smart enough to no longer own a retail computer store!

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