Legal twist in CFMEU scandal leads to bid for power to sack officials, confiscate property

A veteran senior barrister with sweeping powers to follow dirty money trails and sack union officials accused of corruption will take over the scandal-plagued construction union if the nation’s union watchdog succeeds in its plan to place the CFMEU into administration.

On Friday morning, Fair Work Commission chief Murray Furlong launched proceedings in the Federal Court to install leading silk Mark Irving, SC, as the independent administrator of the CFMEU’s construction branches in Victoria, Tasmania, New South Wales and Queensland.

The CFMEU has been under fire following a series of reports that highlighted alleged links to bikie gangs and wrongdoing.Credit: Peter Rae

If the application succeeds, Irving will lead a team of assistant administrators for two years or more in a move that could trump efforts by CFMEU construction bosses to ensure the clean-up of their ranks stays in-house and under the union’s control.

The legal move to ensure a once-in-a-generation overhaul of the union follows a months-long investigation into the CFMEU by this masthead, 60 Minutes and The Australian Financial Review, which has uncovered infiltration of the union by bikies and organised criminals, intimidation and allegations of corruption.

This week, construction union national secretary Zach Smith sought to pre-empt the Fair Work Commission plan to install an independent administrator by announcing the appointment of a union-funded investigator, the widely respected corruption buster Geoffrey Watson, SC.

While Watson would operate under the effective direction of the CFMEU and have little real power to independently tackle corruption and improper behaviour, Irving would wield significant power to sack union officials and examine and manage the union’s finances. He would also have the power to overhaul the CFMEU’s governance regime and culture, which has allowed organised crime and corruption to infiltrate the union’s ranks.

Irving has previously been briefed by the Health Services Union to combat crooked union officials and recover funds stolen from union members.

His appointment appears aimed at convincing industry stakeholders, including unionists and building firms, that the Fair Work Commission is serious about reforming the CFMEU while protecting the rights of its members.

In a statement on Friday, the Fair Work Commission said it had initiated proceedings in the Federal Court to appoint Irving as an independent administrator “following significant consultation with a wide range of stakeholders representing both employer and employee interests”.

The FWC said it had asked the Federal Court to allow Irving to take “as long as necessary” to clean up the CFMEU’s construction branches down the east coast and in South Australia, with the option to also place the Western Australian and ACT branches into administration.

Although the Albanese government and trade union leaders, including ACTU chief Sally McManus and CFMEU manufacturing division bosses Leo Skourdoumbis and Michael O’Connor, support the appointment of a court-backed independent administrator, Irving’s appointment is not guaranteed.

Embattled construction union leaders Darren Greenfield and Derek Christopher, who have both been the subject of serious, albeit denied, corruption allegations, are backing the rearguard action by Smith to thwart Irving’s appointment via legal challenges.

One veteran union insider, who spoke on condition of confidentiality citing fear of repercussions, told this masthead the construction union was prepared to spend millions of dollars in members’ funds to stop a process that would almost certainly result in the sacking of Greenfield, Christopher and other CFMEU leaders accused of corruption.

Greenfield’s case remains before the court and is yet to be tested by a jury. There is no suggestion he is guilty, and even if he was removed from his role it would not mean he was guilty of an offence. Christopher has not been charged but is the subject of a police investigation. There is no suggestion from this masthead he is guilty of an offence, a finding that can only be made by a court.

CFMEU divisional assistant secretary Leo Skourdoumbis supports the move to appoint an independent administrator.Credit: 60 Minutes

A protracted legal battle would also have political ramifications, given it would be seized upon by the Coalition to argue that the Albanese government’s plans to clean up the CFMEU are ineffective.

The FWC statement said Irving would be empowered to ensure the CFMEU’s construction wing branches “function effectively and lawfully”, and that he would be able to “remove officers, officials and employees from their positions”.

In addition to rewriting union rules that have failed to stamp out misbehaviour, Irving would also be able to “take possession of all property and credit cards, exercise votes of the offices he holds and bring proceedings to recover funds, impose penalties and award compensation”.

“The administration of the Division or a Divisional Branch will only end after the Administrator certifies that it is functioning effectively, and the Fair Work Commission’s General Manager agrees,” the FWC said in a statement.

The commission also said it would appoint auditing firm KordaMentha to conduct a deep dive into the union’s finances and establish a “Building and Construction Industry Committee” to advise FWC general manager Murray Furlong about the reform process.

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