TURC: Cesar Melhem, former AWU state secretary, Victoria MP, appears
Labor MP Cesar Melhem says AWU members were better off under a Cleanevent deal they knew nothing of.
Victorian MP Cesar Melhem has angrily defended a secret deal in which the Australian Workers’ Union was paid $25,000 by a major cleaning company, saying the company’s low-paid workers would have been worse off without it.
Mr Melhem, who was head of the Victorian AWU before entering parliament in 2013, clashed with counsel assisting the commission, Jeremy Stoljar SC, as he defended the 2010 agreement with contractor Cleanevent that paid the AWU $25,000 a year and saved the company $1.5 million in wages.
Lawyers for the ALP interrupted proceedings to object to a request for membership records from the ALP’s Victorian branch. The request has since been withdrawn.
Counsel assisting the commission, Jeremy Stoljar, SC, is questioning Mr Melhem.
3.27pm: This afternoon we’ve moved from invoices issued by the AWU to Thiess John Holland to examining invoices sent to Downer EDI and glassmaker ACI.
Melhem claimed ACI’s workers were the best paid glassmakers “in the world”.
In a meaningful encounter, Stoljar asks Melhem: “These arrangements that we have been looking at, are arrangements which are designed to procure revenue and thereby build up wealth for the union, do you agree with that?”
Melhem: “For the members of the union to provide services, yes, that’s what we did. We provided services to members”.
Stoljar: “In some cases to build up membership numbers?”
Melhem: “No”
Stoljar: “In the case of Cleanevent you built up numbers. You were getting a list of 100 members?”
Melhem: “No”
Most recently we’ve been looking at Unibuilt, the company that donated the wages for a staffer to Bill Shorten’s 2007 election campaign when the company was on the verge of collapse.
Mr Melhem was grilled about the decision by the AWU to write off a $12,000 invoice to Unibuilt when the arrangement with the union ceased.
“Did you see that (decision to write off the invoice) as … a donation to the Labor Party or a donation to Unibuilt?” Mr Stoljar asked.
“No,” replied Mr Melhem.
1.12pm: Stoljar accuses Melhem outright once again: “You instructed ... the accounts department to place that designation research work done on back strain in the civil construction industry, on the tax invoice 013042... the purposes of these invoices was to disguise the true purpose of the payments?”
Melhem: “Absolutely not. I totally reject that.”
A pattern has emerged with this examination. It goes a bit like this:
1. Stoljar picks an invoice issued by the AWU for a service (so far we’ve had advertising in the union magazine, research on back strain and a generic bill for “services”).
2. Stoljar grills Melhem on whether the union provided the service.
3. Melhem explains how the service was provided.
4. Stoljar suggests the invoice was false, and designed to hide the true purpose of the payment.
What does Stoljar claim is the true purpose? That it was a pre-agreed deal, struck around the time the company was negotiating an EBA with workers.
It’s worth going back to Bill Shorten’s evidence to the Commission in July on this topic:
“My question was to your knowledge did the joint venture agree to pay the AWU $100,000 a year plus GST for the three-year life of the project?” counsel assisting Jeremy Stoljar asked Mr Shorten.
“I do not believe that this was the case,” Mr Shorten replied.
12.29pm: Moving on from ads in the Australian Worker magazine, Stoljar delves into another invoice issued by the AWU and paid by the construction joint venture, Elizabeth Colman reports.
This time, it’s research on back strain, for which the joint venture paid $33,000.
The AWU and the joint venture had previously been unable to produce the research but - “guess what”, says Melhem - they have found a report on the topic of back strain.
But, says Stoljar, it was commissioned in 2002 and funded by WorkCover.
Stoljar presses Melhem on this.
Melhem appears ready for the question: A long, rambling answer concludes with: “they agreed to fund it with some other funding already been catered for. So that’s my response.”
Mr Stoljar notes the Thiess John Holland representative who gave evidence last week “doesn’t know about back strain research being conducted at the time”.
Melhem replies: “We searched the files and guess what, it was there.”
MORNING REVIEW
As we head into the morning break, Elizabeth Colman reviews the evidence so far.
In a heated exchange, Mr Melhem makes several admissions about the deal between the AWU and Thiess John Holland’s joint venture:
“In 2007 we sat down and went through the various services we were going to provide for that financial year. I’m not denying that”.
“I recall in 2007 we’ve sat down and talked about providing various services and the figure of 110,000 came up.”
Mr Melhem insists all the services “budgeted for” in the deal with Thiess John Holland — tickets to dinners, training, advertising in the union’s newspaper — were provided legitimately.
“We did make profit out of these invoices and services we actually provided to the joint venture. I made no secret of that and we provided the services.”
So as much as there’s a question mark over the business model here, when it comes to donations from the company to the AWU, Melhem insists there was no fraud.
Counsel assisting Stoljar starts to drill down into the invoices for each “service”
He starts with advertising in the union’s newspaper, Australian Worker, and refers to an invoice.
But no advertisement appeared in the issue.
Mr Melhem admits to some ‘confusion’.
Stoljar: “There was not confusion you’re making it up. There was no advertising in the AWM the subject of this invoice and the purpose of this invoices was to disguise the true reason”.
Melhem: No I don’t accept that. The invoice was sent, the company had paid the invoice, and in relation to what advertising actually took place n the actual worked was something between the national office and Thiess John Holland, I was not involved in that part.”
Stoljar: “You’re sure (it) … wasn’t these figures were calculated to reach the prearranged target of 100,000?”
Melhem: “No”
Stoljar: “They’re false invoices aren’t they?”
Melhem: “No they’re not”.
How the session unfolded
11.38am: Jeremy Stoljar hands Mr Melhem three years of ‘Australian Worker’ magazines. Not a single ad for Thiess John Holland, despite the company paying for them.
“They’re false invoices aren’t they,” Mr Stoljar says.
Mr Melhem: “No they’re not”
Mr Melhem tells the inquiry that he had nothing to do with whether ads ran in the magazine: “That was between the national office and Thiess John Holland”.
11.25am: The AWU’s arrangement with Thiess John Holland over Melbourne’s EastLink road defended by Mr Melhem.
10.43am: Mr Melhem takes on Mr Stoljar, SC: “I’ve copped a fair bit on this because of your assertion of selling out workers”
10.38am: The commission has presented to Mr Melhem a document from 2010 showing Cleanevent agreed to $25,000 per year in union fees for AWU workers.
Mr Melhem was questioned last week about a $130,000 all-expenses paid international study tour he took while union secretary, without ever filing a report on the trip.
The inquiry is investigating nearly $500,000 in secret payments from glassmaker ACI to the Victorian branch of the AWU while Mr Melhem’s predecessor, Bill Shorten, was state secretary.
In June, during his appearance at the commission, Mr Melhem was accused of cutting a “side deal” with an employer to drive down their wages and conditions in return for the members dues of unsuspecting employees.
Former AWU boss Paul Howes told the commission last week he was “unaware” of a 2010 side deal with cleaning company Cleanevent that added $75,000 to union coffers and inflated its membership roll with the names of hundreds of casual workers.
After his first appearance at the royal commission, Mr Melhem stepped down as government whip for Victoria premier Daniel Andrews.
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