CFMEU accused of shifting $7m into secret trust

NSW secretary Andrew Ferguson shifted $7m to a secret trust, lawyers for the trade union royal commission have alleged.

Andrew Ferguson, the NSW secretary of the CFMEU.

Andrew Ferguson, brother of prominent Labor figures Laurie and Martin, breached his legal ­duties as NSW secretary of the militant construction union when he shifted $7 million to a secret trust to protect union assets from potential deregistration by the Howard government, lawyers for the trade union royal commission have alleged.

Mr Ferguson and Peter ­McClelland, former president of the Construction Forestry Mining and Energy Union’s NSW branch, “placed a very significant sum of money outside the hands of ­potential creditors”, including the commonwealth of Australia, when it transferred the funds in September 2005, submissions by counsel assisting the commission yesterday said.

“They had a concern the Howard government would deregister the CFMEU and seize its assets.

“There is ample evidence to support a finding by the commission that the transfer may have been made with an intent to hinder or defeat claims by future or prospective creditors of CFMEU NSW,” the final legal submissions from counsel on the matter ahead of Dyson Heydon’s final report, state.

“By supporting and endorsing the transfer, Peter McClelland and Andrew Ferguson may have breached their statutory duties to act for a proper purpose.”

Last month, counsel’s submissions-in-chief suggested Mr ­Ferguson and Mr McClelland had breached NSW conveyancing laws, which their lawyers branded “unfair”.

“In the absence of some creditor who has actually been prejudiced or who might realistically be prejudiced, the entire debate ... is hypothetical,” Mr Ferguson’s ­lawyer said.

Mr McClelland told the inquiry the $7m sum represented “about 50 per cent” of the CFMEU NSW’s total funds at the time and was decided upon because it “still left [the union] with sufficient funds to be able to operate”.

The fund later made payments to the CFMEU in NSW to support campaigns against WorkChoices and the restoration of the Aus­tralian Building and Construction Commission, the inquiry has heard.

Counsel assisting also published final submissions in reply to legal arguments from the CFMEU on behalf of NSW union organiser Darren Greenfield yesterday.

Mr Greenfield faces possible criminal charges over allegations he received regular $2500 bribes from bankrupt businessman ­George Alex.

In its defence of Mr Greenfield, the CFMEU argued he was innocent, adding that a referral for criminal prosecution would ­“stigmatise” his family.

The CFMEU has strongly ­argued Mr Greenfield should be credited with recovering more than $1m in entitlements to union members from Mr Alex’s companies. However the “CFMEU has overstated Darren Greenfield’s claimed success in this respect”, counsel assisting said.

Mr Alex’s companies were still owed entitlements as late as ­January last year, with branch ­president Rita Mallia and the union’s redundancy trust mostly responsible for recovering unpaid entitlements, counsel assisting added.