Chocolates, churros, hot water system on union boss’s expense claims

Chocolates, churros, a hot water system and travel are among a Queensland union boss’s expense claims under legal scrutiny, writes Des Houghton.

A powerful union boss in strife for his credit card expenditure had a fondness for Turkish Delight chocolates and Red Bull energy drinks, court documents reveal.

They appear frequently on a list of the union credit card purchases made by Stephen Smyth, the Queensland president of the CFMEU.

Also listed are Cadbury’s Caramello Bear, Nestle’s Milky Bar and Cherry Ripe chocolates, Pepsi Max, Coke Zero, and oodles of takeaways including McDonald’s Classic Angus burgers and sandwiches.

The federal union watchdog accuses Smyth of breaching the Fair Work Act by misusing his card and “improperly using his position to gain an advantage for himself”.

Smyth’s credit card spending is under intense scrutiny in a case the Registered Organisations Commission says is a warning to union office bearers who have access to members’ money. Smyth is to face the Federal Court accused of using union funds on home plumbing, personal dental costs, drivers’ licence renewal, car hire while on annual leave in the USA, and travel and meals for himself and his family – including a birthday celebration for his wife.

On Wednesday, Justice John Logan in the Federal Court ordered Smyth to file a defence before February 25 next year.

CFMEU Queensland' boss Stephen Smyth.

In civil proceedings in the court, Registered Organisations Commissioner, Mark Bielecki, accused Smyth of spending about $6700 of members’ money across 80 personal transactions in 2015-16.

Bielecki said Smyth used the branch’s funds for personal purposes not related to his employment, and which he was not authorised to incur.

He added: “Where Mr Smyth disclosed that expenditure as personal, he had it added to an unauthorised loan he took from the District Branch that was not in writing and did not incur any interest.”

The ROC is seeking civil penalties against him.

The minutia presented in the court documents is fascinating. There were pork ribs in Biloela, rib fillets and Texas ribs in Moranbah and Heineken and Corona beers in Blackwater. A $77.95 bill in April 2016 at San Churro Chocolateria in Brisbane shows purchases of a large flat white, ($4.90), English breakfast tea ($3.90), a large cappuccino coffee ($4.90), a large latte ($4.90) and Churros (deep fried pastries) for two ($14.95) with extra bananas ($3), extra “dulce de leche dip” ($3), extra marshmallow ($3), and, churros for two ($14.95) with extra bananas ($3), extra strawberries ($3), and churros for one ($8.95) with extra strawberries ($3) and a bottle of Beyond Blue water ($2.50).

The expenditure is detailed in a claim lodged by Michael Nicolazzo of Maddocks Lawyers on behalf of the ROC.

It includes a $934.99 hot water system installed in Smyth’s Mackay home in August 2015, and $729 for dental services in May 2016. Neither was “work-related expenditure”, according to the claim. Smyth used the credit card on a trip to the USA in July 2015 when he and Mrs Smyth flew from Brisbane to Sydney to Los Angeles.

“From on or around July 19, 2015 to July 24, 2015, Mr Smyth was on annual leave,” the statement says.

The Smyths drove from Los Angeles airport to Las Vegas in a hired car and Smyth attended a United Mine Workers of America conference in Las Vegas as a representative of the CFMEU.

He used his card to pay $1096.79 for car hire. He was also accused of misusing his credit card to pay for Mrs Smyth’s airfares to Melbourne and a dinner there.

The claim alleges he failed to properly account for his use of district branch funds and failed to reimburse district branch the full amount of the funds which he has used for personal purposes.

It alleges he used funds for purposes not associated with his employment. He is accused of obtaining a personal benefit for himself and/or Mrs Smyth at the expense of the branch and failing to avoid a conflict between the interests of the branch and the interests of himself and/or Mrs Smyth.

It also says he failed to maintain a separation between transactions for which he might properly use branch funds.

Mr Bielecki said the decision to commence Federal Court proceedings follows a complex four-year investigation by the Registered Organisations Commission.

The commission alleges that Mr Smyth breached his officers’ duties under Sections 285, 286 and 287 of the Fair Work (Registered Organisations) Act 2009 (the RO Act) by incurring about $6700 in personal expenditure during the financial year ending on June 30, 2016.

An investigation began when an auditor said he could not verify that all credit card expenses were incurred solely for business purposes.

Under the RO Act, the Commissioner must investigate serious defects, irregularities, deficiencies, failures or shortcomings identified in a qualified auditor’s report.

In a statement the ROC said the proceedings raise important questions about whether senior officers of registered organisations are entitled to rely on their own authority to regularly use members’ money to fund personal expenditure.

“The duties placed on officers under the RO Act encourage high standards of accountability and are central to the good governance and effective operations of registered organisations,’’ it said.

“Members of registered organisations are entitled to be confident that senior officials are accountable and will spend members’ money on matters which are in the best interests of members.”

Des Houghton is a media consultant and a former editor of The Courier-Mail, The Sunday Mail and the Sunday Sun