CFMEU diverted $3.1m of members funds to Greenfields’ bribery charge fight

Documents reveal the NSW CFMEU authorised the transfer of members’ funds to pay for lawyers for the union’s state secretary and his son, two days after Labor announced the union would be forced into administration.

Darren Greenfield and his son Michael after being arrested on corruption charges. Picture: John Feder

The NSW CFMEU authorised the transfer of $3.15m of union members’ funds to pay for lawyers for the union’s state secretary Darren Greenfield and his son Michael to fight bribery charges, two days after the ­Albanese government announced the union would be forced into administration.

Documents obtained by The Australian reveal the union’s branch committee of management on July 19 endorsed “in the best interests of the branch” the transfer of $3.15m from the union to the Sydney law firm, McGirr & Associates, which is representing the Greenfields.

Then workplace relations minister Tony Burke announced on July 17 that 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 the removal of senior officials, including Darren Greenfield.

On July 18, McGirr & Associates principal Paul McGirr wrote to CFMEU NSW president Rita Mallia, setting out the anticipated costs that would be ­incurred by both counsel and solicitors to defend “Darren and Michael until finalisation of the matter”. In a three-page letter, Mr McGirr provided detailed costings totalling $3,150,969.50 which he requested Ms Mallia pay to the firm, with the funds to be held in a trust account.

The proposed rates included $1.9m in counsel fees, with the firm estimating one senior counsel would charge $9000 a day for 90 days, equivalent to $810,000, and two junior counsel would charge $920,000 at daily rates of $6000 and $3800 respectively.

On July 19, the branch committee of management approved transfer of funds “equal to the fees” estimated by McGirr & Associates to a trust account operated by the law firm.

“Those legal representatives will be instructed to hold those funds on trust to be used solely for the purpose of meeting the reasonable legal expenses of Darren and/or Michael Greenfield,” the BCOM minutes state, adding the committee had satisfied itself the transfer was in accordance with union rules.

Darren Greenfield 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.

According to the minutes of the NSW BCOM meeting, which started at 9.40am on July 19, Darren Greenfield “briefly” addressed the meeting about allegations published in the media in the preceding days relating to him and the union.

Both Darren and Michael Greenfield reiterated they were “innocent of all charges and intend to continue to fight the cases against them”.

After committee members indicated they wanted to consider several matters without the Greenfields in the room, Darren Greenfield told them they had an obligation to the union’s members in carrying out their role, and they should “make their decision in accordance with their fiduciary obligations without fear or favour, in the best interests of the union”.

The Greenfields, Ms Mallia and the union’s then assistant secretary, Rob Kera, left the meeting and by about 10am the committee agreed to unanimously support the Greenfields.

After further discussion, a resolution was passed that said the union had first agreed in May 2022 to pay the “reasonable legal expenses” of the Greenfields in respect of the charges “and that they strongly deny them or any misconduct”.

“The charges as alleged have arisen in the course of the duties of the secretary and the assistant secretary as union officers and as such there is nexus between legal costs in defending these charges and their duties as union officers, and for that matter the reputation of the union,” the minutes state.

The committee said given the federal and state governments had “foreshadowed attacks on the union” including on the ability of the union to defend any charges laid against its officials, it was in the best interests of the branch to transfer funds equal to the $3.15m in fees estimated by McGirr & Associates to the trust account operated by the law firm.

Asked on Wednesday about the BCOM decision to transfer union members’ funds to the law firm, a spokesman for administrator Mark Irving KC said he had “commenced investigations into this matter”.

“If members’ money has been misappropriated then all lawful steps will be taken to hold people to account and to retrieve those funds,” the spokesman said.

Asked to comment on the ­documents, Mr McGirr told The Australian on Wednesday that none of the $3.15m had left the trust account and would likely be returned to the administrator if requested.

“In essence, the union made it clear that they were prepared to support the Greenfields, bearing in mind the matter was a plea of not guilty, and that’s where we directed our correspondence,” Mr McGirr said.

He said when he heard Mr Irving had been appointed, he wrote to him advising that he was holding the money in trust. He added that none of the funds would have been released from the trust account without Mr Irving’s approval.

“If the administrator requests the money come back, then it probably will have to come back,” he said. “It’s all above board. It’s an estimate only so therefore the money is still in the trust account.

“As long as I’m satisfied every T has been crossed and every I dotted, of course, I would have to comply with what the administrator said. With trust accounts, there are strict rules with the Law Society that have to be adhered to in relation to the release of funds.”

It is understood Mr Irving has written to the law firm, stating the issue was under review and not to use any of the money.

Mr McGirr said the Greenfields would not be making any comment on the transfer of the union funds. “I’d be telling both Greenfields not to say anything to anybody,” he said.

Asked why, he said: “For obvious reasons. I want everyone to be quiet. To reserve their right to ­silence on all matters.”