By Robb M. Stewart
MELBOURNE, Australia--Australian police have charged a former
executive at the nation's largest bank with bribery, alleging he
and a colleague illegally received payments in return for giving a
lucrative contract to a U.S.-based technology company.
Keith Hunter, formerly an executive general manager in
Commonwealth Bank of Australia Ltd.'s IT department, was charged
with two counts of bribery in a Sydney court early Wednesday. Mr.
Hunter's lawyer, Brian Wrench, confirmed the accused had been
granted bail and had pleaded not guilty. Mr. Hunter had elected to
remain in Australia to face the charges, Mr. Wrench told The Wall
Street Journal. Mr. Hunter, who was ordered to surrender his
passport, couldn't be reached for comment.
New South Wales police said they wanted to speak with a second
man who isn't in the country, Jon Waldron, who had also been a
senior IT manager at Commonwealth Bank, the country's biggest
lender by assets. Mr. Waldron couldn't be immediately reached for
comment and it wasn't clear if he had legal counsel.
The bank didn't confirm the names of the suspects.
The police allege the two men, both U.S. nationals, received
almost US$2.2 million in bribes last year as part of an earlier
deal to help a small technology company, ServiceMesh, secure a
contract with the bank to provide products and services worth tens
of millions of dollars.
ServiceMesh was acquired by Falls Church, Va.-based Computer
Sciences Corp. in late 2013. The police say the size of the
contract with Commonwealth Bank would have contributed
significantly to the undisclosed purchase price.
The contract between ServiceMesh and Commonwealth Bank wasn't
put out to public tender, and the bank's policy states employees
can't receive cash or gifts from suppliers, the police said.
The police allege that Eric Pulier, previously ServiceMesh's
chairman and chief executive and now vice president and general
manager of CSC's global cloud unit, rewarded the two former bank
executives with cash payments.
Mr. Pulier wasn't immediately reachable for comment in the U.S.,
and it wasn't clear if he had legal counsel.
A spokeswoman for CSC said the company had begun its own
investigation into the allegations. "We take this matter very
seriously and will cooperate fully with all relevant authorities,"
she said in an emailed reply to questions.
The spokeswoman had no further comment and wouldn't confirm the
name of the suspect.
According to the police, the money was transferred from accounts
in the name of an individual and a company registered in Delaware
and listed as a charitable organization.
Commonwealth Bank confirmed that a former executive had appeared
before a Sydney court Wednesday. "We have no tolerance for any
illegal activity by any employee and we take every situation
seriously," a spokeswoman for the bank said, adding that no
customers had been affected by the matter.
Working with the U.S. Federal Bureau of Investigation, the New
South Wales police said its fraud and cybercrime squad had frozen
more than US$1.5 million in alleged corrupt payments during the
still ongoing investigation, dubbed Strike Force Drawl.
The police said they were alerted to the alleged misconduct
early this year by the bank following an internal investigation
that had uncovered suspicious payments to two of its employees,
both U.S. nationals.
Commonwealth Bank reported to authorities that an anomalous
amount of money had been paid into an account with the bank held by
one of the two accused, paid in U.S. dollars, which prompted an
internal investigation, according to the police.
Mr. Hunter, 61, was arrested Tuesday at a residence in Sydney's
Surry Hills suburb, the police said. Commonwealth Bank confirmed it
had reported the matter to the police and was cooperating with the
investigation. The spokeswoman declined to comment further while
the matter was before the court.
Police detectives said it would be argued in court that both
former employees were involved in a corrupt relationship with the
U.S.-based technology company.
They allege that evidence, including money transfers and email
correspondence, will show the men received cash payments that they
attempted to disguise as being from a not-for-profit organization,
and that shell companies were used to launder the funds.
Write to Robb M. Stewart at robb.stewart@wsj.com
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