Victims lash Victoria Police over CFMEU investigation failures

The Victoria Police operation singled out by Victorian Premier Jacinta Allan to defend her government’s handling of building industry corruption has failed to pursue key investigative leads as victims of underworld intimidation complain it is deeply ineffective.

The ineffectiveness of Victoria Police’s narrow “charge or close the case” approach to the allegations dogging the CFMEU and the wider building industry has also been exposed by a federal probe that last week uncovered evidence state authorities had missed for 18 months.

Mick GattoCredit: Justin McManus

Victoria Police’s Operation Hawk has this week been at the centre of Allan’s defence to damning criticism from the CFMEU administration’s top investigator, Geoffrey Watson, SC, that her government had covered up the extent of criminal infiltration on government projects through what he said was its inadequate Wilson review.

Watson also lashed Victoria Police for its response to this masthead’s Building Bad revelations last year.

Operation Hawk operated partly in the dark, with government officials working on the Big Build failing to pass on allegations of taxpayer-funded “blackmail” by CFMEU factions aligned with bikie gangs from as long ago as mid-2023.

Documents detailing blackmail allegations and other alleged criminal conduct are held by state government agencies, including the Major Transport Infrastructure Authority (MTIA), and have also been sighted by Watson.

“I’ve seen evidence of that,” Watson has said of the blackmail allegations held by the state government.

While state detectives privately blame poor resourcing, inadequate laws and jurisdictional confusion, officials in Canberra said Victoria Police’s approach had enabled gangland figures like Mick Gatto to keep profiting from the building sector.

This masthead is aware of evidence of payments made to Gatto weeks after Victorian authorities dismissed allegations about Gatto’s conduct which were first made to the force in October 2023.

Gatto’s operations were targeted by the federal police last week in raids on his accountant, Charles Pellegrino, as part of an investigation into the possible use of front companies to receive suspect payments from building firms.

Federal police during the raid the Northcote offices of Gatto’s accountant on Thursday.Credit: Luis Enrique Ascui

Victoria Police sources said last week that it had not been briefed on the raid, nor on what had triggered it.

At the centre of the raid were allegations gathered by the federal police that the companies had been used by building firms to pay Gatto and his associates to cut deals with, or win favour from, the CFMEU or to intimidate building firms.

Identical allegations were not only passed to the Victoria Police’s Operation Hawk and never investigated by state police, but a victim of a building firm using Gatto on its payroll urged police to act in October 2023.

Developer Joe Toscano lashed the Victoria Police for failing to thoroughly follow up the complaint, which he lodged in person and in writing in early October 2023.

Joseph Toscano.

Toscano made the same allegations a second time to Victoria Police in mid-2024 after the Building Bad scandal erupted and Operation Hawk was created.

On both occasions, Toscano told the Victoria Police that Gatto was probably being paid for by building firm Cobolt Construction, which was in a dispute with his own company.

In October 2023, he wrote to police saying that Gatto had made “veiled threats … being the action of building unions” and used other intimidation tactics including taking over Toscano’s building site.

Toscano also gave detectives a recording of Gatto warning him that the gangland figure would “cause you grief” and in which Gatto claimed he could shut down any building site in Victoria: “I can stop anyone doing anything, mate.”

Victoria Police assessed Toscano’s complaint to see if they could charge Gatto with extortion offences. They made no attempt to see how and whether Gatto was being paid by Cobolt. Cobolt has previously publicly denied making any payment.

“All they did was tick the box to make it look like they were investigating,” said Toscano. “The Victoria Police’s response was pretty pathetic. They made no thorough inquiries.”

Toscano said he was speaking out after hearing Allan insist that the force was doing a thorough job investigating the scandal.

“I spoke up to the Victoria Police over 18 months ago to try to get something done,” he said. “In the end, they did nothing of substance.”

Correspondence between Toscano and detectives from late 2023 also reveals Toscano was told by police to apply for a “safety intervention order” to protect himself.

“I remain unsure whether I should pursue this further,” Toscano wrote to police, telling them he remained scared because Gatto had been called in to “mediate” and had issued veiled warnings to him.

A second complainant contacted Victoria Police in August last year alleging that Gatto had offered to secure him CFMEU support in return for a large payment.

Operation Hawk detectives referred the complainant to the Fair Work Commission – which in turn referred the complaint back to Victoria Police.

“It’s a joke. I was sent from one agency to another and the police aren’t serious,” they said, speaking anonymously because of the fear of blowback from the underworld.

Then-Victoria Police chief commissioner Shane Patton released a public statement in November that did not name Toscano but said his allegations of intimidation had led to police assessing that “no criminal offence” had been committed and that the matter would be finalised within weeks.

Victoria Police also said that in respect of allegations of “kickbacks relating to CFMEU”, detectives had “followed up and no criminal offence has been identified”.

This masthead has confirmed that weeks after Patton’s statement, Gatto continued acting on behalf of Cobolt, and more than a dozen other building firms, including by issuing demands for payments that Watson described this week as menacing and requiring police investigation.

Watson said that as recently as March this year, Gatto and his associates had been engaged in intimidatory behaviour in the industry, receiving payments from construction firms, including those on Labor’s Big Build.

Two months after Operation Hawk ceased investigating Toscano’s complaint and kickback allegations, the federal police started its own inquiry, Operation Rye.

Within weeks, it had gathered information that Cobolt and other building firms were paying Gatto’s accountant suspicious “consulting” fees.

The federal police assessed that the payments may be unlawful because they may allegedly involve kickbacks paid to improperly influence the CFMEU, or other alleged financial crimes, including those involving the proceeds of crime.

While some of the suspected crimes identified by the federal police probe involve Commonwealth offences, several are captured by the Victorian laws enforced by state police.

In a statement on Monday, Victoria Police defended its handling of the Gatto allegations, saying Toscano’s “complaint was fully assessed and the recordings [of Gatto] in question reviewed, however, it was determined they didn’t meet the threshold of criminality”.

“The complainant provided no new additional information or avenues of investigation,” it said.

While a civilian complainant may suggest to police what avenues of inquiry to undertake, detectives are responsible for generating lines of inquiry, such as the financial analysis.

The police statement also said the force was this week it was expanding Operation Hawk following fresh allegations linked to the construction industry.

“The expansion includes the deployment of additional detectives to help assess new intelligence and evidence as well as proactively target organised crime associated with the sector.”

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