Bribery case reaches towards CBA's highest levels

Former senior Commonwealth Bank technology executive Keith Hunter appeared in a Sydney court yesterday charged with accepting bribes to ensure a multimillion dollar cloud computing contract went to Silicon Valley firm ServiceMesh in 2012.

The NSW police allege that Hunter, the CBA's former head of IT service delivery, and his CBA colleague, Jon Waldron, who was the bank's former general manager of IT engineering, were paid at least US$2 million in bribes by ServiceMesh chief executive Eric Pulier to secure the cloud computing and storage contact.

Both Hunter and Waldron are US citizens, and both were fired late last year when the scheme unravelled and the police were called in.

Waldron is on the run, having left Australia for the United States on the weekend. Police said Hunter appeared to be on the verge of also heading for the US when they arrested him at his Surry Hills unit on Tuesday.

His lawyer denied this, telling reporters outside the court yesterday: "He's pleaded not guilty and quite frankly he is the only person who decided to fight this case in Australia."

Speaking outside the Court, Superintendent Arthur Katsogiannis, from the NSW Police Fraud and Cybercrime unit, said the bank noticed "suspicious payments from Ace Foundation, a non-profit organisation in the United States" and was not satisfied with Hunter's explanations.

Similarly, Waldron was questioned by the CBA following the discovery that large unexplained payments were made into his bank account from May to December via the same apparently not-for-profit firm in the US.

It will be alleged that this was a shell company set up by ServiceMesh CEO Pulier in an attempt to mask bribes paid to the two CBA executives. So far, police have frozen accounts containing at least US$1.5 million.

Superintendent Katsogiannis said Hunter was the highest level executive ever charged with bribery by his unit.

He told journalists: "In times gone by most of these employees were usually terminated and would go from financial institution to financial institution," News Limited reports.

Both of the major companies involved, CBA and CSC, were running for cover after releasing short statements reiterating that they take the situation seriously and promising to co-operate with authorities. CSC acquired ServiceMesh in late 2013. In a statement, the firm said it had begun its own investigation into the allegations.

A CBA statement confirmed that, "a former executive is appearing before the NSW Court ... no customer has been affected by this matter [and] it is not appropriate to make further comment while this matter is before the court."

Hunter was granted bail to appear in Sydney's Downing Court on April 1 on the condition that he hand in his passport and report daily to Surry Hills Police Station.