Howard hailed as a 'thug' in Telstra debacle

Tension between Australian incumbent Telstra and the Federal government there has mounted in the past few days with PM John Howard dubbed a “political thug” by the country’s opposition.

Howard, never far from controversy, has put forward a former adviser to be a director of the telco and the resulting backlash crosses both political and economic boundaries.

The row centers on Geoffrey Cousins, a former consultant to Howard on communications, who – on paper at least – appears to be well suited to the Telstra board. However, despite his experience in Australian telecommunications, senior figures within the firm have condemned Howard suggesting his motives are not all they seem.

At the weekend Telstra chairman Donald McGauchie wrote to the Australian Stock Exchange and advised shareholders not to vote for Cousins because the board had not been able to assess his application using “established processes”. Those processes are now being used to lever Telstra’s argument against Howard who is looking increasingly stubborn as the row escalates.

Sol Trujillo, Telstra chief executive also weighed in by supporting his chairman and reminding shareholders that for the Telstra board “it’s very important to maintain the integrity, the ethics of good governance,” he was reported as saying by The Age newspaper.

But Howard has dug in and insists that Cousins is the right man for the job and that the government has no intention of putting anyone else forward in his place.

The row is the latest in a series of high profile spats at Telstra and comes just weeks before the proposed sale of a further Aus$8bn worth of Telstra shares to the public.