CFMEU official misused position to slug super fund with fees, APRA claims

Long-serving CFMEU secretary Michael O’Connor misused his position on the board of First Super to bankroll the salary of a union delegate while the manufacturing division of the CFMEU was experiencing financial difficulties, and slugged the super fund with hundreds of thousands of dollars in extra fees with no benefit to its members, court documents allege.

Documents filed with the Federal Court reveal the detailed allegations made against O’Connor by the Australian Prudential Regulation Authority (APRA), which last week said it was seeking to remove the union boss from the board of the superannuation fund and impose financial penalties.

Michael O’Connor has been accused of misusing his position on the board of First Super to benefit the CFMEU’s manufacturing division. Credit: Alex Ellinghausen

The allegations centre on the member and employer coordinator (MESC) contract between First Super and the CFMEU’s manufacturing division. As part of that arrangement, the fund pays the union fees and reimburses its expenses for those coordinators.

APRA has alleged O’Connor, in his role as national secretary of the CFMEU’s manufacturing division, was quietly involved in negotiating an extension to the contract, in which the union proposed significant fee hikes for the fund that included a 5 per cent increase and a one-off roll-over fee of $350,000.

“The respondent [O’Connor] engaged in the conduct … with the intention of increasing the fees to be charged to the trustee under the MESC contract without any corresponding increase in benefits to the trustee under the MESC contract,” APRA filed with the Federal Court.

“Further or alternatively, the respondent engaged in the conduct … with the intention of benefiting the union at the expense of First Super and its members’ interest.”

APRA has also alleged O’Connor appointed a union delegate, referred to in court documents as BT, to a full-time role as MESC coordinator at First Super in March 2020 to form “part of her role as [an] … organiser for the union”.

The role had been advertised in December 2019, but had not yet been filled by March 2020, when the manufacturing division of the CFMEU was experiencing financial difficulties and considering laying off staff.

O’Connor instructed the union’s MESC contract manager to invoice the super fund for the coordinator role, and then withdrew the advertised vacant position before appointing BT in that role with effect from April 1, according to court documents.

“During the period from April 2020 to October 2021, while employed as a MESC coordinator, BT spent a substantial proportion of her time doing the work of her previous role for the union, including as [an] organiser for the union, and did little work in her role as MESC coordinator for the benefit of the trustee,” APRA alleged.

The long-serving union official did not disclose to the employer representatives and independent directors on the board of First Super, or its staff, BT was carrying out union-related work, APRA has claimed.

The regulator told the Federal Court that O’Connor’s alleged misconduct amounted to a breach of his duties as a director, and asked the court to ban the union official from sitting on the board of any superannuation fund.

O’Connor was contacted for comment. First Super said it would be inappropriate to comment while the matter is before the court.

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