Gangland figure accused of receiving $250,000 cash to arrange CFMEU workplace deal

A Victorian gangland figure once jailed over an underworld hit was allegedly given a quarter of a million dollars in a metaphorical “brown paper bag” in return for arranging union backing for a construction company’s efforts to win work on the state’s Big Build.

In a damning report to the administrator of the stricken CFMEU, special investigator Geoffrey Watson, SC, accepts the account of a whistleblower that Faruk Orman took $250,000 from two civil contractors after helping them obtain a valuable enterprise bargaining agreement. Orman has repeatedly denied receiving any payment.

Detailing a series of suspected unlawful, and potentially criminal acts, involved in the arrangement, Watson says it shows the entire process for obtaining enterprise bargaining agreements is flawed and needs an overhaul. The agreements are highly valuable because they ease access to large projects, especially public sector projects, but they have also been at the heart of corruption allegations across the country.

The report has also recommended former Victorian assistant state secretary of the union Joe Myles be referred to the Fair Work Commission for failing to act with care and diligence in his role as a union official.

The CFMEU was placed into administration last year after the Building Bad investigation by this masthead, The Australian Financial Review and 60 Minutes, which found underworld figures infiltrated the union and fomented a culture of fear and intimidation.

After the revelations about the troubled union, the state government launched a review that recommended principal builders working on state projects report suspected criminal conduct and, where possible, address the behaviour.

Watson is assisting administrator Mark Irving, KC, and said the investigation into the Orman transaction raised serious questions about how easily the process in obtaining an EBA, which gives companies a substantial advantage when bidding for work, can be corrupted.

“It is important to note that the facts uncovered in this investigation have a wider impact than just in respect of this single EBA,” Watson says in his report.

“The characters involved, and the method of manipulation of the EBA process, are indicative of broader corruption in the CFMEU in Victoria.

“This single instance is better seen as being part of a larger problem, of what I believe amounts to a pattern of conduct. This pattern of conduct will be addressed in further case studies.”

Irving’s administration is struggling to assert control over the union and to combat corruption in the wider industry with an unresolved High Court challenge undermining its push for reform and to remove unwanted players.

Orman, a close associate of underworld figure Mick Gatto, is best known in Victoria as a man whose 2009 conviction over the gangland murder of Victor Pierce was quashed as a result of the Lawyer X scandal. That long-running saga saw Victoria Police admit to using lawyer Nicola Gobbo as an informant. Late last year police agreed to pay Orman up to $1 million in compensation.

Watson claims in his report that Orman used a days-old company with no assets or employees, ZK Civil Infrastructure, to deceive the Fair Work Commission into believing he was seeking a union-endorsed agreement for a business that would employ workers, particularly Indigenous people, on the Melbourne Metro project and other civil infrastructure projects.

The agreement was a special type of wage deal known as a “greenfields agreement”, which is only granted to people and companies that do not have an existing enterprise bargaining agreement.

Kayne Pettifer is embroiled in a controversial industrial relations deal.Credit: Getty Images

As previously revealed by this masthead, within 24 hours of obtaining Fair Work Commission’s approval on the agreement, Orman flipped his business, transferring his shares to the contractors, Cameron Buzzacott and former AFL forward Kayne Pettifer, who then took over the company and the agreement.

Much of Watson’s report is supported by interviews and responses to questions by Orman, Buzzacott, Pettifer, Myles and other union officials. Orman and Buzzacott issued statements on Friday strongly disputing Watson’s conclusions and complaining they had been denied procedural fairness.

The report is also supported by a new witness – given the pseudonym Athens in Watson’s report – who said Buzzacott had confessed to the scheme, telling Athens the money “was paid in a (metaphorical) brown paper bag”.

Businessman Cameron Buzzacott.

Watson alleges that by agreeing to deceive the Fair Work Commission and the union into believing the deal was a “greenfields agreement”, Orman, Buzzacott and Pettifer were all potentially complicit in the crime of obtaining a financial advantage by deception.

Watson has also raised questions about who at the union knew about the arrangement, stating in the report he believed Orman leaned on his and Gatto’s connections with Myles, who then directed an employee of the union to facilitate Orman’s agreement.

Watson’s report states that Myles denied approving the EBA, saying he was merely copied into relevant emails and that the agreement was approved by other senior CFMEU staffers. In response to that claim, Watson says in his report: “I do not believe Joe Myles”.

Myles’ position was hard to assess, according to Watson, and there was no evidence he made any personal gain.

Watson said it was likely that Myles was acting “at the direction of Gatto”, adding that Myles’ conduct could amount to misconduct in office because he did “did not care” about union rules.

“But that is no excuse – he was obliged in his role as an official of the CFMEU to exercise care and diligence, act in good faith, and not to improperly use his position to gain an advantage for himself or someone else,” Watson said in the report.

In response to questions, Myles said he had not been made aware of “any report”.

This masthead is not suggesting the conclusions in Watson’s report mean that there is sufficient evidence of wrongdoing to support a criminal charge.

The report questions how the CFMEU was able to approve the Orman agreement for ZK so quickly, given it has 169 pages and such deals usually take several weeks to be brokered and then approved. Instead, the ZK agreement was approved in five days.

Watson notes that while a template EBA common in the civil contracting industry was used in the ZK agreement, there were a number of bespoke elements included in the Orman deal.

“The idea that the CFMEU could undertake the necessary enquiries to determine if the applicant (ZK), as an entirely new entrant into the field, was a suitable recipient of a CFMEU EBA in such a short period is quite impossible,” he said.

“The idea that an agreement of this length and complexity could be negotiated, drafted, considered, possibly re-negotiated, and approved in such a short period is not feasible.

“The only sensible conclusion is that the terms of these EBAs were regarded as a mere formality: the deal is everything, the details are unimportant.”

The rushed-through agreement was signed despite Orman having no qualifications or experience in civil constructions.

Neither Orman nor any of ZK’s staff held the licences necessary for the difficult and dangerous work involved in civil contracting. According to the report, former CFMEU Victorian secretary Derek Christopher told Watson that Orman “had no industry background”.

Watson notes that while he has drawn on document evidence such company records and witness statements, the investigation was hampered by the CFMEU’s lack of paperwork about the striking of the agreement.

“The only CFMEU records are two brief emails and the EBA itself. This is disconcerting. There is no record of any checks conducted. Even if checks were by-passed, the initial proposal should have been recorded. It was not. It would be expected that there would be some record of the CFMEU’s assessment of the applicant. There is none.”

He said that if the CFMEU was discharging its duty to members, there should have been thorough checks to ensure that this was the type of employer the CFMEU sought to engage with.

Faruk Orman in the hours after he walked from court a free man in 2019.Credit: Justin McManus

“Apart from the involvement of Joe Myles … there is no record that any other CFMEU official was even aware this was happening,” he said.

Buzzacott told Watson he had struggled to get a CFMEU agreement in the past, and he took ownership of the group because he believed a union EBA “would assist the operation of my business interests in Victoria”.

Buzzacott, according to Watson, said in a statement that he wrote to then premier Daniel Andrews as well as then infrastructure minister and now Premier Jacinta Allan in May 2022 pleading for assistance given the serious financial difficulties his business was facing without the support of the CFMEU and a union-backed agreement.

“My request for urgent meetings elicited no response,” he said.

Buzzacott, an Indigenous labour hire-owner, maintained to Watson, as he had done so previously to this masthead, that he only discovered that ZK was once registered to Orman after he took over the company. He said he did not know Orman.

When contacted by this masthead this week, Buzzacott strenuously denied making any confession about ZK to anyone.

“I never made a payment to Faruk Orman for any shares in any company whatsoever,” he said.

Buzzacott said he had never obtained any financial advantage through the transaction “let alone in a manner that was deceptive and dishonest”.

“I do not consider that I have acted in any way improperly or unethically,” he said.

He said he not had any opportunity to respond to Watson’s conclusions, including possible criminality, and had not been given a copy of the report.

“It is grossly unfair for Mr Watson’s findings to be published without my having been given the opportunity to properly respond to him,” he said.

Pettifer did not contribute to Watson’s report but has previously confirmed that he knew Orman via a safety training business.

Orman has long maintained he did not receive any money as a result of the transaction and claimed still to have some ownership or control over the company and that “behind the scenes there are other agreements in place, in between various shareholders and directors”.

In a statement to this masthead, he too said he had not seen the report and that Watson’s claims were untrue and would not withstand scrutiny.

“The allegations are false and the statements from the so-called report set out in your questions are each wrong and defamatory,” Orman said.

“There is no reasonable basis for any report (which I have not seen) to contain the statements or recommendations or for the investigator to have rejected the comprehensive evidence I have provided.

“This is an unfounded smear campaign where the investigator chooses to believe what he wants to hear: baseless claims by a former disgruntled employee rather than all the evidence to the contrary.”

Pettifer did not respond to requests for comment.

For more on this investigation Watch 60 Minutes Sunday night at 8.40pm.

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