Union official claims ‘Asmar gang’ created slush fund to influence Labor appointments

An allegedly corrupt Victorian union boss has been accused of forging close ties to backroom Labor operatives and disgraced union boss John Setka while running a secret slush fund to influence the selection of state and federal ALP candidates and policies.

The damning claims about union secretary Diana Asmar and the “Asmar gang” have been made by the assistant secretary of the Victorian Health Workers Union, David Eden, in a sworn affidavit lodged in the Federal Court that provides a rare glimpse into the underbelly of the Labor movement.

Health Workers Union boss Diana Asmar is at the centre of allegations.Credit: Justin McManus

Eden’s claims leave open the possibility that some of the almost $3 million the Fair Work Commission alleges was stolen from the union and its members by Asmar could have been used to fund backroom political campaigns for influence within the ALP.

In his affidavit, Eden claims that as a result of his work, he “learned that the Asmar gang was a loose collection of individuals in the right faction of the Labor Party that had one common ambition”.

This goal, according to Eden, was “to create a fund of money to be used to support the election and/or appointment of select individuals into union and other positions to entrench voting blocks on state and national executives of the Labor Party”.

Eden also alleged he was encouraged by Asmar to use union funds on a holiday and that Asmar and her allies plotted to force him from the union.

Eden’s claims that he was targeted for reprisal as a whistleblower have sparked a new investigation by the Fair Work Commission. Four union and ALP sources, however, described Eden’s claims as fanciful and insisted Asmar has evidence to dispute the allegations of corruption and misconduct.

The sources, who spoke on the condition of anonymity, also accused Asmar’s rivals of exploiting for political gain the commission’s decision to launch a civil case against Asmar and her husband, David.

The commission’s most serious claim in its civil action against the Asmars involves allegations that the pair siphoned $2.7 million from the union with the help of a printing company that issued false invoices for “ghost printing” services never rendered while it separately handed large sums of cash to David Asmar at meetings in cafes.

The commission is also investigating why ex-CFMEU boss John Setka sent $180,000 in members’ fees to the ghost-printing scheme now being probed by police.

Court documents show the commission intends to use bank statements and telephone records to support its action, but defenders of the Asmars have attacked the case as deeply flawed.

While the union watchdog’s case against the Asmars is yet to be tested in a court, the civil action — along with sweeping actions taken against the CFMEU — has reshaped key ALP and union alliances, with the Asmars left deeply isolated within the party.

Separately, the CFMEU’s former bosses have been forging an alliance with the Greens as part of a campaign to attack the Albanese government over its decision to place the building union into administration.

This masthead has confirmed the case against the Asmars has its origins in a probe by the Independent Broad-based Anti-corruption Commission. In 2023, IBAC released a report that concluded the Health Workers Union had been improperly awarded a $1.2 million government contract on the eve of the 2018 state election after pressure from ministerial staff, then-premier Daniel Andrews’ office and Asmar.

By then, IBAC had secretly referred a key part of its inquiry into Asmar to Victoria Police and the Fair Work Commission. IBAC was unable to take further action because the suspected corruption was outside its jurisdiction.

IBAC’s referral led to recent moves by the commission to launch legal action against the Asmars in the Federal Court and to a separate bid by the national Health Services Union to put the Victorian branch — the Health Workers Union — into administration.

The Health Services Union has had no allegations against it and is backing the Fair Work Commission’s case against the Asmars. Eden’s affidavit was sworn in support of the HSU’s Federal Court case attempting to force the HWU into administration.

The affidavit was released by Federal Court Justice Craig Dowling after an application by this masthead.

John Setka on Channel Seven’s Spotlight program.

Eden names the “Asmar gang” members as Setka, David Asmar and veteran ALP political operative Andrew Landeryou, the husband of Labor senator Kimberly Kitching, who died in 2022. Of that group, only David Asmar is being investigated by the Fair Work Commission.

Eden also alleges that Asmar boasted about her links to senior Labor minister Bill Shorten, who also formerly employed David Asmar in his electorate office.

There is no suggestion that Shorten has engaged in any wrongdoing and multiple ALP sources said the minister had distanced himself from the Asmars and urged scrutiny of their financial affairs.

But Eden’s affidavit places Landeryou, who for years has operated as a powerbroker in Labor’s Right faction and is a friend of Shorten, at a meeting in which the union secretary directed Eden be targeted.

Eden’s statement claims that on a Sunday in April, Asmar held a meeting at her house with Landeryou, David Asmar and her allies in the union in which she conceived a plan to have Eden investigated for bullying allegations in order to silence him. Eden has denied the bullying claims and alleged they were contrived to force him from the union.

Supporters of Landeryou have said privately he was at the Asmars’ home by chance and had no involvement in any discussion about Eden. Landeryou and the Asmars declined to comment.

Eden claims his concerns about Asmar’s spending of union funds were heightened after he told her he was taking a family holiday to Mexico and she allegedly instructed him to “take the union Visa debit card and pay for everything”.

“I said no. I thought that was highly inappropriate,” he said.

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