Thiess clears desal executives

ONE of Australia's top construction companies has ended its investigation into a spying scandal

ONE of Australia's top construction companies has ended its investigation into a spying scandal.

The investigation, into its $5 billion-plus Victorian desalination project, cleared its top executives, but found "serious errors of judgment" had been made by two managers.

Investigators engaged by the company, Thiess, a wholly owned subsidiary of Leighton Holdings, combed through almost 17,000 emails and 7500 electronic files to understand the scale of the spying, which was revealed by The Australian last month.

Thiess chief executive for Australian operations Nev Power was stunned that two of his top managers at the project near Wonthaggi -- Greg Miller and Marcus Carroll -- had set up an operation, code-named Pluto Project, with Bruce Townsend, a renowned strike-breaker.

Both top managers have declined to comment.

Mr Miller was subsequently sacked and Mr Carroll resigned, while Mr Power, in an unrelated development, announced his resignation.

Unions at the site were outraged by the spying revelations and more than 1000 workers walked off the job.

Mr Power said yesterday that investigations by consultants Deloitte had confirmed that the arrangement was inappropriate, damaging and the result of "serious errors of judgment".

Pluto Project involved contractors being recruited by Mr Townsend to infiltrate the workforce at the desal plant -- the largest infrastructure project in Victoria and a political hot potato for the Brumby government -- to report back to Thiess managers.

There were allegations of widespread rorting and fears that the unions would slow the project to extract more money.

Thiess group legal counsel Ted Williams said yesterday that Mr Townsend, who controls the Hobart-based Australian Security and Investigations, was paid about $560,000 by Thiess for a short-term arrangement in which his fees were funnelled via a Melbourne law firm.

He said Mr Miller and Mr Carroll "went to significant lengths to keep the arrangement confidential" and no other Thiess managers were consulted.

"Nobody else was aware of the arrangement until (The Australian) raised it with Thiess," he said.

"ASI have threatened legal proceedings against Thiess and we are considering our own position and possible action against ASI."

The investigation found that neither ASI nor Mr Townsend had accessed confidential data relating to union delegates and workers, but Mr Williams said he would not waive confidentiality to permit Mr Townsend to disclose such information if he held it.

Mr Williams said Mr Townsend, released from jail in 2007 after being convicted for receiving stolen cars and trucks, was "an extortionist". Mr Townsend and ASI are demanding Thiess pay more than $1 million for Pluto, quietly shut down long before its scheduled completion date.

Mr Townsend said yesterday: "Any suggestion by Thiess that I am an extortionist is untrue. But I have a moral and legal responsibility to maintain confidentiality to clients, past and present, and I will not breach that in spite of what Thiess is claiming now".

Thiess said Mr Miller and Mr Carroll "appear to have been motivated by industrial relations and security concerns".