CFMEU extortion claims fuel row over ‘IR election’

Fresh claims of abuse of power by the CFMEU have spurred Tony Abbott and Bill Shorten to square off over an early poll.

The commission heard that Halafihi Kivalu, formerly from the Canberra branch of the CFMEU, received money from construction businesses in $10,000 instalments.

Fresh claims of abuse of power by the militant construction union have spurred Tony Abbott and Bill Shorten to square off over the prospect of an early election, with the Prime Minister citing the ­aspirations of “decent working people” as a reason for Labor to support workplace reform.

As allegations of extortion by the Construction Forestry Mining and Energy Union dominated yesterday’s hearings of the royal commission into union corruption, the Opposition Leader ­demanded the Coalition call an early election on industrial ­relations.

Following Mr Shorten’s ­appearance at the royal commission last week, the inquiry has turned the heat on deals made by the militant construction union, which yesterday boycotted the Canberra hearing.

The CFMEU, the rival union to Mr Shorten’s power base in the AWU, claimed that prejudicial treatment by the commission and a “denial of natural justice” meant that it had not had time to prepare.

The hearing heard that one lead CFMEU organiser had allegedly extorted more than $150,000 from construction businesses in Canberra, in return for favourable treatment by developers. It also heard that employers signed membership forms on behalf of employees and paid their dues for them.

The commission heard that Halafihi Kivalu, from the Canberra branch, received money in $10,000 instalments, sometimes in white unsealed envelopes ­secured with a rubber band. One formwork company allegedly paid $135,000 over two years to Mr ­Kivalu, who was referred to as “Fihi” throughout proceedings, while other evidence told of meetings in a McDonald’s restaurant close to the CFMEU headquarters where cheques of $10,000 were exchanged and “donations” sought. Counsel assisting the commission, Jeremy Stoljar, said evidence over coming weeks painted a “disturbing picture” of the ACT branch of the CFMEU, involving “alleged corrupt payments, standover and intimidation tactics” as well as the “apparent establishment and promotion of cartels for key trades”.

The CFMEU is not legally ­required to attend the hearings, unless it wants to cross-examine witnesses, or until its own officials have been called to appear. Several officials from the union’s ACT branch appear on the royal commission’s witness list; however it is unclear when they will be called.

To capitalise on public attention on union corruption, Mr ­Abbott continued to lay the groundwork for the reintroduction of bills to strengthen the construction watchdog and improve union governance — measures that could hand the government a trigger for an early election on industrial relations.

“I don’t want our workplace relations legislation blocked; I want our workplace legislation passed,” Mr Abbott said.

“That’s what I want and, in my judgment, sensible Labor people, decent working people, are appalled by the revelations in the royal commission and they want to see unionism in this country cleaned up.”

Mr Shorten accused the government of manipulating the $80 million commission for political purposes amid speculation Mr Abbott was eyeing off a double dissolution.

The evidence in the commission yesterday is the most blatant on unions leveraging payments from employers, with witnesses saying they believed they had no choice but to hand over the money. Mr Taleb told the commission he twice paid $50,000 in incremental payments to Mr Kivalu for work on two separate projects: a five-storey, 38-unit residential apartment in Yarralumla and a 77-unit retirement village in nearby Griffith. Two subsequent jobs also required one-off payments of $20,000 and $15,000, according to evidence before the commission. When Mr Taleb said he could not pay any more money, Mr Kivalu is alleged to have sought assistance from him for construction work on his own house in Wamboin, NSW. Mr Taleb told the commission the structural drawings for the house, which he paid for, were only handed over in recent months.

The CFMEU was quick to distance itself from the activities of Mr Kivalu saying that “allegations of bribery” should be referred to police and dealt with in criminal courts.

Construction division national secretary Dave Noonan said: “Mr Halafihi Kivalu is no longer employed by the CFMEU and is not being represented by the union in the proceedings. We take the position that bribery is unacceptable and anyone that takes a bribe will be sacked and referred to the cops.

“Our position is very clear, the rules of the unions require that members sign their own membership card, it’s not our practice to take blank cheques ... people should sign up to the union and sign their own cards and pay their own dues.”

Mr Taleb told the hearing he paid union dues for “every single one” of his workers out of his own pocket and acknowledged that employees were signed up to the union without their knowledge.

He confirmed that Mr Kivalu had watched him sign union membership forms on behalf of employees in his office with a former NRL prop forward turned union organiser, John Lomax. “I had to pay for them. Employees weren’t interested … so I had to pay for it basically,” he said.

A second witness, Medwhat Elesawiy, owner of MDS Tiling, told the commission he had handed over cheques of $10,000 to Mr Kivalu at a Canberra McDonald’s outlet.

“I think I have no choice ... Every single job in Canberra, anyway, especially in Canberra, yes, the builder will not let (in) any trade contractor without approval by union,” he said.