Bombshell report: CFMEU’s Darren Greenfield ‘should face criminal prosecution’
Corruption buster’s explosive report recommends legal action against four former CFMEU officials.
Ousted NSW CFMEU secretary Darren Greenfield should be prosecuted on criminal charges for recklessly failing to discharge his duties and dishonestly using his position to gain financial advantage, a bombshell report ordered by union administrator Mark Irving KC into the transfer of $3m of members’ funds has claimed.
The criminal charges, which carry the threat of up to five years imprisonment and significant financial penalties, have been recommended by corruption buster, Geoffrey Watson, who was instructed by Mr Irving to investigate the extraordinary transfer of $3.15m of members’ funds to pay for lawyers for Mr Greenfield and his son, Michael, to fight bribery charges.
Mr Watson SC also alleges the Greenfields, the union’s former NSW president Rita Mallia, and ex-NSW assistant secretary, Rob Kera, committed multiple serious contraventions of the legal duties they owed to members of their union and should be subject to civil penalty proceedings.
Mr Watson said Mr Irving should consider legal action against the officials to recover up to $895,000 in legal fees already paid out on behalf of the Greenfields, finding it was an “astonishing sum of money to be spent on a defence of charges of this kind”.
Mr Irving will provide the report to the officials and a solicitor subject to the adverse findings and give them 14 days to respond before determining whether any referrals to the police and the Fair Work Commission are required.
In addition to the $895,000 paid to Sydney law firm Mills Oakley over three years at a rate of nearly $30,000 a month, the NSW CFMEU committee of management last year authorised the transfer of $3.15m to a second law firm, McGirr & Associates, two days after the Albanese government announced the union would be forced into administration.
At the same time, the committee approved the use of $500,000 to defend any commission proceedings relating to the proposed administration.
In his 41-page report, Mr Watson made numerous claims regarding the conduct of the Greenfields, Ms Mallia and Mr Kera and saying “it is remarkable that, at this time of apparent crisis, the Greenfields were receiving this kind of specifically preferential treatment”.
“In the order in which the decisions were made, the Greenfields’ interests came before the interests of saving the CFMEU,” Mr Watson said. “The sums involved are telling as well: $500,000 set aside to save the CFMEU; six times that much was set aside to defend the Greenfields.
“It gets worse: there is no doubt that each of the Greenfields were involved in making the decisions which would confer a massive benefit upon themselves. Rita Mallia and Rob Kera were complicit in that. It is clear that the Greenfields’ interests were being protected and placed ahead of, and before, the interests of the ordinary membership.”
In his report, Mr Watson claims the branch executive made up of the Greenfields, Ms Mallia and Mr Kera, had for the past four to five years dominated the committee of management, (COM) providing non-executive members with insufficient information, shutting down discussion, quashing dissent and presenting the resolution to transfer the $3.15m as a “fait accompli”.
“No one was willing to cross swords with the executive,” Mr Watson wrote. “The executive ran the NSW divisional branch as they wished; the COM had become the executive’s catspaw.”
Mr Watson said the branch auditor, Michael Mundt, raised questions in 2022 about the resolution to indemnify the Greenfields, and advised the payments and an estimate of the expected cost were required to be disclosed to the Registered Organisations Commission (ROC).
He said a second resolution was then passed, which was designed to protect the legal expenses from disclosure to the ROC and the branch accounts and had “an effect of concealing the payments from the ordinary membership”.
Mr Watson said that when he told non-executive committee members that nearly $900,000 of union money had been spent on the Greenfields’ legal fees, the reaction was “a mixture of shock and anger”, and “some colourful language was deployed”.
Mr Watson said he believed Darren Greenfield’s conduct “disclosed intentional dishonesty and certainly reached the standard of recklessness”.
“Darren Greenfield knew that important funds were being paid for his benefit, when they could have been used elsewhere for the benefit of the members,” he said in his report.
“Darren Greenfield knew that the legal expenses were very large and were continuing to mount.”
Mr Watson said Mr Greenfield was active in preventing disclosure to the ROC, “which had the consequential effect of concealing the payments from the membership”.
He said Mr Greenfield knew that the committee of management was not being given sufficient information to allow it to make the appropriate decisions as to whether the payments should be continued, and knew that, “because of the way he had tamed dissent, that whatever was proposed to the COM would be approved”.
Mr Watson recommended Darren Greenfield be prosecuted under section 290A of the Registered Organisations Act for an offence of allegedly recklessly failing to discharge his duties as the union’s NSW secretary in good faith; and an offence of using his position of state secretary “dishonestly and with the intention of directly gaining an advantage for himself and his son”.
He recommended the Greenfields, Ms Mallia and Mr Kera be subject to civil penalty proceedings for allegedly failing to consider the reasonableness of the Greenfields’ legal expenses, failing to inform the committee of management about the spending on the legal expenses and for facilitating the payment of $3.15m into the trust account of McGirr & Associates.
He said the Greenfields should also be subject to further civil proceedings for allegedly failing to remove themselves from the decision-making processes related to the payment of the legal fees.
He said solicitor Paul McGirr of McGirr & Associates should be subject to civil penalty proceedings for an alleged serious contravention, alleging he “undoubtedly aided and abetted” the four officials in their alleged contraventions by providing a “grossly inflated” fees estimate and providing his trust account as the receptacle for the money.
Mr Watson said he consulted an expert litigator with more than 30 years’ experience in criminal law who described Mr McGirr’s $3.15m estimate as “grossly excessive”, saying it was between five and 10 times the appropriate estimate.
Following a request from Mr Irving last year, $3.107m was returned to the union but Mr Watson said $43,911 remained outstanding.
Mr McGirr said the amount had been incurred for work during legal proceedings.
Mr Watson said his investigation was “hindered, but not compromised, by a lack of co-operation from the Greenfields, Ms Mallia, Mr Kera and Mr McGirr who declined to comply with a notice to assist the administrator.
He said their alleged refusal might make them liable for a civil penalty. He said he also sent letters to the five individuals to give an opportunity to them to address relevant issues but again they declined to assist.
Mr McGirr, who is representing the Greenfields, said on Wednesday they would not be commenting on Mr Watson’s report. “I have instructed my clients not to say anything,” he said.
Darren Greenfield and Michael Greenfield were arrested and charged in 2021 after allegedly taking bribes from a construction firm in exchange for favourable treatment from the union. They have denied any wrongdoing.
In relation to Mr Watson’s claims against him, Mr McGirr told The Australian: “I have done nothing illegal and I was exercising my legal rights at all times in respect to Mr Watson’s allegations.
“I stand by everything I’ve done and at no stage have I done anything untoward or illegal and I will fight tooth and nail should any action be taken against me as I stand by my reputation within the industry.”
In relation to the $3.15m held in the trust account, Mr McGirr said: “It was I who raised the issue with Irving that I held that money in trust. Nothing was hidden and I had to wait up to two weeks for them to provide account details and confirmation that they wanted the money back.”
Ms Mallia declined to comment on Wednesday.
A CFMEU spokesman said on Wednesday: “Mr. Irving has received the comprehensive and forensic report from Mr Watson. He will provide the report to those affected before deciding whether to refer matters to the FWC and the police for prosecution.”