A former Labor powerbroker being paid $450,000 a year as the NBN's government relations point man was recommended for the job by Communications Minister Stephen Conroy.
Mike Kaiser took up the role with the National Broadband Network Co. - which will build and operate the $43 billion national broadband network - after quitting as Queensland Premier Anna Bligh's chief of staff last year.
The appointment of Mr Kaiser, who will earn more than the prime minister, has raised allegations of political interference on the part of Senator Conroy.
In a Senate estimates hearing on Monday, Senator Conroy confirmed he had recommended Mr Kaiser to NBN Co chief executive Mike Quigley.
"I suggested him as a person of possible relevant experience," Senator Conroy told the hearing.
The position was never advertised.
Opposition communications spokesman Tony Smith said the revelations of Senator Conroy's role in the appointment were "absolutely staggering".
Political 'interference'
"This raises serious questions about the NBN Co's employment and management processes, and the level of political involvement and interference by the Rudd government," he said.
"It is not the job of the minister to suggest potential jobs for Labor mates at NBN Co."
Senator Conroy was also forced to defend Mr Kaiser over the circumstances that led him to quit the Queensland Parliament in 2001.
Mr Kaiser quit the Queensland Parliament after details of his false electoral enrolment as a 22-year-old emerged.
"He resigned from parliament and paid the price for a youthful indiscretion in 1985," Senator Conroy told the hearing.
Mr Quigley, who interviewed Mr Kaiser for the job following the communications minister's recommendation, said he believed the former Labor MP was well suited to the position.
"When interviewing Mr Kaiser I focused on the job the NBN Co had in front of it," he told the hearing. "My assessment was he could more than adequately do that job."
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