Labor executive set to ban donations from Victorian CFMEU

Labor’s federal executive is set to ban donations from the Victorian branch of the CFMEU to cauterise the political damage over revelations of underworld infiltration into the scandal-plagued construction union, as pressure increases on the Albanese government to intervene.

Senior ALP sources, who were unable to speak publicly as details of the ban were being finalised, said the party was preparing to announce the measure in the coming days.

Workplace Relations Minister Tony Burke is weighing up federal interventions including deregistering the CFMEU’s construction division or appointing an external administrator.Credit: Alex Ellinghausen

It comes after Victorian Premier Jacinta Allan said on Monday she would cut off donations from the union, while South Australian Premier Peter Malinauskas asked for the CFMEU’s construction division to be suspended from his state’s branch of the party.

Labor’s national executive will meet on Wednesday, the same day as the ACTU, which is bracing for conflict after the CFMEU’s national leadership declined to stand down its NSW boss despite the peak union body’s ultimatum to remove from positions of power any official facing criminal allegations.

The CFMEU’s construction division is facing a growing crisis amid explosive revelations of its links to the underworld, bikie gangs and alleged corruption.

Prime Minister Anthony Albanese said on Monday that CFMEU national secretary Zach Smith’s move to put the Victorian and South Australian branches of the construction union into administration did not go far enough.

Smith said he would consider standing down officials “where appropriate” but it would be on a case-by-case basis.

He said the union had decided to stand by NSW secretary Darren Greenfield when bribery charges were first laid in 2021, and it would be “fair to say” the CFMEU was not changing its position soon.

“There’s been no new evidence brought against Darren, which is already on the record, so, like I say, it’s a case-by-case basis,” Smith told this masthead on Monday.

The issues in Greenfield’s case are separate from the recent revelations in the media and the charges have not been proven. Greenfield denies all wrongdoing and there is no suggestion he is guilty of any offence, only that he is facing charges.

Smith stressed that the union was working with the ACTU to root out criminality within its ranks.

“We might disagree on some points about the union’s response [but] the unwavering commitment of the union is to deal with these allegations, and wherever possible we’ll work with the ACTU to do that,” Smith said.

ACTU secretary Sally McManus told a press conference in Melbourne on Monday that anyone using unions to facilitate criminality should face the full force of the law.

“The ACTU calls on the national leadership at the CFMEU to stand down those subject to criminal allegations whilst investigations occur, including relevant police investigations,” McManus said.

CFMEU national secretary Zach Smith has said the union’s Victorian and South Australian branches will be put into administration.Credit: Ben Searcy

“We also call on the CFMEU to take all necessary steps to rid the union of any and all criminal elements.”

McManus did not name individuals, even when pressed. Nor did she say what the ACTU would do if the CFMEU did not meet its demands.

Workplace Relations Minister Tony Burke is weighing up federal interventions including deregistering the CFMEU’s construction division or appointing an external administrator. On Monday, he said Smith’s announcement that he had taken over the Victorian and SA branches was inadequate.

“It’s a start, but only a start,” Burke said. “As I said yesterday, I will be weighing up the department’s advice, the evidence that’s emerging, and the response of the union. The response so far is progress, but falls short.”

In 2012, then-workplace relations minister Bill Shorten put the Health Services Union’s east branch into administration over an expenses scandal.

On Monday, Victoria’s Allan asked Labor officials to suspend the CFMEU from her party’s state branch and called for an immediate pause on all political donations from the construction union.

“What we have seen here in recent days isn’t unionism,” Allan said. “It’s thuggish, unacceptable behaviour at its worst.”

Smith said the union did not need “outside intervention”.

“The strong view of the union is that the union and the movement [are] more than capable of responding to allegations like this,” he said.

Smith said he would install a leading lawyer to oversee an independent investigation to probe allegations of wrongdoing.

Derek Christopher, the Victorian CFMEU boss positioning to replace John Setka as leader of the union’s most powerful branch, received an estimated $200,000 in free labour and supplies from major building companies, and he remains the subject of a police corruption probe. There is no suggestion that Christopher is guilty of an offence, a finding that can only be made by a court.

Setka resigned on Friday, ahead of the publication of a months-long investigation by The Age, The Sydney Morning Herald, The Australian Financial Review and 60 Minutes that uncovered details of senior bikie figures and criminals being parachuted into lucrative union roles.

McManus backed Smith’s assertion on Monday that the union would be able to get its house in order and said deregistration would be counterproductive.

The ACTU would consider the CFMEU’s response to its demands at a meeting this week, she said.

Fair Work Ombudsman Anna Booth said the watchdog was investigating the conduct of the CFMEU, including the Victorian branch, but did not elaborate.

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