CFMEU administrator questions legality of $3m members funds transfer

CFMEU administrator Mark Irving has requested the return of $3.15m from McGirr & Associates, as new documents reveal a further $500,000 in members’ money was diverted to a second law firm on the same day.

CFMEU administrator Mark Irving. Picture: Alex Coppel

CFMEU administrator Mark Irving has questioned the legality of the NSW CFMEU’s “extraordinary” decision to transfer $3.15m of members funds to pay for lawyers for Darren Greenfield and his son, Michael, to fight bribery charges, as it emerged a further $500,000 in members money was diverted by union officials to a second law firm on the same day.

Mr Irving wrote to law firm McGirr & Associates, which is representing the Greenfields, on Friday seeking the return of the $3.15m, stating he was concerned the branch committee of management’s decision to approve the use of members’ funds for the Greenfields’ legal fees “was not lawfully or properly authorised”.

“It is unclear to me how such a decision could be made by members of the BCOM in a manner that was consistent with their fiduciary obligations,” Mr Irving wrote in an email to McGirr & Associates principal Paul McGirr that has been obtained by The Australian. “Any reasonable person would consider such an arrangement to be extraordinary. It occurs to me that, prior to accepting any payment under such an arrangement, a solicitor would, acting reasonably, make proper inquiries as to whether or not the expense was properly authorised.“

New documents obtained by The Australian show the NSW CFMEU at the same BCOM meeting on July 19 also authorised the transfer of an extra $500,000 of union members funds to a second law firm to cover legal fees to contest administration applications.

Documents show the officials took just 20 minutes to authorise the transfer of both amounts – totalling $3.65m – to the two law firms, with the BCOM meeting occurring two days after the Albanese government announced the union would be forced into administration. The $500,000 was to be used to contest any state or federal government applications to put the union into administration.

Union leaders said the decisions were further evidence the NSW CFMEU had allegedly put the interests of officials ahead of its members.

“The amounts of money transferred out of the union are just shocking, they take your breath away,“ one senior union leader told The Australian.

“It also shows their priorities: $3.1m to defend themselves and $500K to defend the union.”

In his email to Mr McGirr, Mr Irving said he considered the proper course of action was for Mr McGirr to return all of the funds that had been paid into trust by the union, including $43,911.55 that had been already spent on legal fees. “I request that you attend to this immediately,” he said.

Mr McGirr on Sunday said Mr Irving’s “opinion of what he thinks happened (at the BCOM meeting) has nothing to do with me”.

“He has expressed an opinion to me about something that I wasn’t privy to. It’s quite strange,” he said. “It’s almost impugning that I had something to do with it. I am a legal representative of Greenfield and the union said they would cover the legal fees. I wasn’t privy to the (BCOM) meeting and I wasn’t at the meeting and I was told the meeting was done as per the rules. I was told everything was above board, and I accepted that.”

Mr McGirr said he would not be commenting on whether the money would be returned to the administrator. “I’ll be seeking my own advice in respect to that,” he said.

He said Mr Greenfield would also not be commenting on the money transfers, including the diversion of $500,000.

Darren and Michael Greenfield, who resigned as the union’s NSW assistant secretary on August 12, 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.

Two days before the NSW CFMEU BCOM meeting on July 19, then workplace relations minister Tony Burke announced the Fair Work Commission would apply to the Federal Court to have CFMEU construction divisions put into administration. Subsequent legislation resulted in the takeover of the divisions on August 23 and removal of senior officials. Construction unions will hold a second round of protest rallies on Wednesday.