CFMEU administrator vows to destroy Mick Gatto’s sway over union

CFMEU administrator Mark Irving has warned veteran gangland figure Mick Gatto he could be jailed if he continues to cultivate and lobby union officials now under the barrister’s watch.

In an unprecedented intervention, the top silk wrote to the gangland identity to warn he would use all his powers to destroy Gatto’s sway over the construction union.

Mick Gatto has been warned by CFMEU administrator Mark Irving, KC.Credit: Eddie Jim

“Your [Gatto’s] business model which relied on developing close personal relationships with CFMEU organisers is now at an end,” Irving, KC, said in a letter to Gatto, emailed on Thursday evening.

Irving also warned the underworld figure that “if you call, meet with, email or text, any CFMEU employee or ask to be permitted onto CFMEU premises” in breach of a new policy about dealing with industry fixers, then Gatto could be referred for potential prosecution for breaches of the Fair Work Act, punishable by up to two years’ imprisonment.

“I will if appropriate, refer your conduct to regulators for prosecution if you engage in conduct that would be a contravention of the Act,” Irving said, while also stressing he was not suggesting Gatto had broken the law in any of his dealings to date.

The decision to aggressively confront Gatto comes after a report by this masthead that CFMEU boss Zach Smith had blindsided Irving by directing a union organiser to have a clandestine meeting with the underworld identity in an East Melbourne park on September 12.

CFMEU Victorian and Tasmanian branch executive officer Zach Smith last year.Credit: Alex Ellinghausen

It has also placed political pressure on Industrial Relations Minister Amanda Rishworth, with the federal opposition claiming Smith’s actions had eroded public confidence in “Anthony Albanese’s anointed golden boy”.

It can also be revealed that federal agents swooped on Gatto lieutenant John Khoury as he flew into Melbourne from his Gold Coast base last month.

Detectives forced Khoury to hand over his electronic devices as part of an ongoing probe, codenamed Rye, into payments made into the accounts of suspected front companies allegedly controlled by the two gangland associates, via their accountant, by building companies operating down the east coast.

This masthead has previously identified firms operating on Victorian state government Big Build projects, including LTE Construction Group, as having made payments to the suspected front companies to secure industrial support or peace from the CFMEU. Companies in Queensland and NSW are also caught up in the investigation.

Mick Gatto (right) with gangland associate John Khoury.Credit: Erin Jonasson

There is no suggestion Gatto, Khoury or their accountant or any firm are guilty of any offence, only that they are targets in an ongoing federal police probe into whether the payments involve financial crimes or unlawful attempts to influence union officials.

In response to questions from this masthead, the Australian Federal Police confirmed Khoury “was searched following their arrival on a flight at Melbourne Airport on 16 September” and the “search warrant was part of ongoing inquiries under Operation Rye”.

With the recently launched Queensland commission of inquiry into the CFMEU also set to examine Khoury’s activities in that state, the targeting of the two Melbourne underworld identities by the administration and police sees the pair facing scrutiny not seen since Gatto’s so-called Carlton Crew was caught up in Melbourne’s gangland wars.

Gatto was acquitted of murdering underworld triggerman Andrew “Benji” Veniamin during the height of the gangland wars, when a jury found he had acted in self-defence.

Khoury, who has been described in previous royal commission documents as a veteran underworld figure albeit with a relatively minor criminal rap sheet (like Gatto), did not respond to requests for comment but has previously denied all wrongdoing.

Irving’s new rules around dealing with industry fixers – who not only include Gatto and Khoury but bikie-linked figures such as a former Mongols bikie chief in Melbourne and, in NSW, a high ranking Bandidos gang member – is aimed at squeezing gangland figures out of the construction sector while also complying with laws that protect the rights of individuals to conduct their business affairs freely.

Under the new policy, figures like Gatto will have to write to Irving or his senior delegates to seek permission to raise matters with the union.

Irving’s letter also requested Gatto provide “a list of clients to whom you provide services” while warning he would pass that information to policing agencies, regulators, large project contractors who employ Gatto’s building firm clients and the state government building agency.

“Your continued engagement in IR will be entirely a matter for those project builders,” Irving wrote.

“However, in an industry that for many years has been characterised by phoenixing and companies with opaque accountabilities, increased transparency enables those in the industry to make informed choices and increased transparency allows stakeholders to make informed choices about what sort of company they wish to engage.”

On Friday, Gatto hit back at Irving, questioning the lawfulness of his new policy in a rambling text message to his building industry clients and union backers.

But Gatto’s missive also appeared to concede that, temporarily at least, his ability to operate was being curtailed.

“I am sorry that I can’t deal with you [union officials] directly anymore. Irving seems to think he is judge and jury and I don’t believe it is legal what he is doing,” Gatto wrote while dismissing allegations of wrongdoing.

“I tried to speak to Irving and put him straight many times, even high ranking union officials tried on my behalf but he kept having heart attacks and was not interested.

“I will not walk away from my livelihood because they are looking for a scapegoat… Otherwise have a great life my friends.”

Gatto’s reference to Irving’s health relates to two short stints the barrister has had in hospital since he was appointed last August as part of the Albanese government’s efforts to clean up the scandal-tainted union and broader construction sector in response to this masthead’s ongoing Building Bad crime and corruption revelations.

Zach Smith, who had directed a CFMEU organiser to secretly meet Gatto to discuss concerns from Melbourne Airport building firm, the Maz Group, apologised for his conduct on Thursday after being confronted by this masthead.

However, his actions stoked fierce anger from senior union and industry figures and police, who believe continuing relationships between CFMEU officials and nefarious industry figures, and delays in cleaning up the union’s scandal-plagued Victorian branch, have badly hampered the Albanese government-backed administration.

On Friday, Minister for Industrial Relations Amanda Rishworth denied this, insisting the appointment of senior CFMEU officials, such as Smith, was a matter for Irving.

“The government has full confidence in the administration, as the strongest available action to stamp out corruption, criminality and violence in the construction industry,” Rishworth said in a statement.

“Changing deeply rooted cultural problems takes time, and we are committed to the administration remaining in place until the job is done.”

Smith is one of the few senior CFMEU figures from the previous leadership to remain in a top role under Irving, and is regarded by his union and ALP allies as having good integrity but poor judgment.

Opposition industrial relations spokesperson Tim Wilson said public trust in Rishworth “has collapsed”.

“When Anthony Albanese’s anointed golden boy [Smith] is caught facilitating meetings with underworld figures, trust in their process to clean up CFMEU corruption collapses,” Wilson said in a statement.

“When corruption is endemic in a union, then appointing an administrator is like changing the logo on the letterhead of a sternly worded letter to a union official warning them not to facilitate meetings with underworld figures, and that’s been exposed today.”

Minister for Skills and Training Andrew Giles said the reports about Smith and Gatto were concerning.

“We recognise as a government that there is a ... big bit of cultural work that is required in the building and construction industry,” Giles said on Friday.

“That’s why minister Rishworth brought together industry figures, union figures, and ministers such as myself a couple of weeks ago in the National Construction Industry Forum to demonstrate our resolve to ensure that this industry is turned around, and the Australian community can have confidence in it.”

The revelations come less than a month after allegations of violence and intimidation on the site of the Western Sydney Airport train terminals were exposed by this masthead and the CFMEU’s NSW leader, respected union veteran Michael Crosby.

At Friday’s press conference, Giles also refused to say whether Smith should keep his job as branch executive, saying it was a matter for the administrator.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.