ACE Foundation, a charitable organisation in the US, has filed papers in a California court, alleging "wrongful conduct" by the Commonwealth Bank of Australia has deprived it of US$2.5 million.
The foundation, which was set up by serial technology entrepreneur Eric Pulier, is suing CBA for the return of funds advanced to two former CBA employees, Jon Waldron and Keith Hunter, for project work on its behalf.
The two ex-employees are alleged (while in senior technology procurement roles at CBA) to have taken these funds as bribes to ensure a ServiceMesh cloud computing contract, said in earlier proceeeding in Australia to be worth "tens of millions of dollars", went to and stayed with CBA.
ACE, on the other hand, is asserting that these two were "IT employees of CBA who had agreed to help ACE" and the money was advanced to them "to fund their work on ACE's charitable projects".
According to the document lodged with the Superior Court for the State of California, ACE's funds were "openly and transparently deposited into the employees' accounts at CBA."
So, rather than being paid bribes via a charitable foundation with a strong connection to the person who had the most to gain from getting a contract with CBA, as will be alleged in Australian courts, here's what ACE claims is the true sequence of events that has left it US$2.5 million out of pocket, and Waldron and Hunter out on bail in NSW, ahead of criminal trials over bribery allegations:
- To fulfill its mission - "to apply next-generation technology to the most pressing challenges facing economically distressed populations and developing nations" - ACE engages consultants with technology experience to build its reusable technology and systems and to assist ACE in developing projects and initiatives.
- Two of the earliest consultants ACE engaged were Jon Waldron and Keith Hunter, IT employees of CBA. ACE understood that CBA had permitted its two employees to help ACE.
- From May through December 2014, ACE advanced funds to Waldron and Hunter to cover project costs they would incur for ACE.
- ACE advanced the funds based on professional tax advice that it would be prudent to expend funds in 2014 for known projects to minimize charitable dollars being lost to taxes.
- Far from being secret payments, ACE advanced funds to Waldron and Hunter to their respective bank accounts at CBA.
- CBA later objected to its employees helping ACE, after CBA learned that the employees were leaving to work for CBA's competitors.
- When ACE learned that CBA objected to the employees helping ACE, in late December 2014, ACE requested that the employees return the money.
- CBA, however, threatened to sue the employees and froze their accounts, and claimed that the funds were improper payments intended to be hidden from CBA "even though the funds were openly deposited into CBA accounts", according to the ACE statement.
- Later in the document, ACE alleges that CBA made false allegations to the Australian police that the payments were illegal secret payments. The Australian police froze the accounts of Waldron and Hunter, preventing them from returning ACE's money.
As a result of CBA's "intentional and wrongful interference" with ACE's relationship with Waldron and Hunter, the Foundation has been deprived of over $2.5 million, needed by ACE to fund its projects.
CBA clearly will need time to file a defence in Los Angeles. Meanwhile, the two former CBA IT executives are expected in NSW lower courts for directions hearings in coming weeks, with a trial not likely before September, according to sources.