Corruption, crooks and kickback offers: What we know about the CFMEU scandal so far

Explosive allegations of criminal infiltration, kickback offers and corruption within the powerful Construction, Forestry and Maritime Employees Union have had wide ramifications, including the resignation of long-time Victorian union boss John Setka and the decision to put two branches into administration.

A major investigation by this masthead, The Australian Financial Review and 60 Minutes, published this week, has shown high-profile underworld identities working alongside CFMEU fixers to dish out lucrative building licences and guide contracts towards favoured people close to the union.

Credit: Peter Rae

The months-long investigation has also shown senior officials allegedly taking bribes, hundreds of thousands of dollars in free building work being dished out by major builders to union bosses, and officials threatening factional opponents at their homes.

The heightened degree of concern also stems from the instrumental role of the union in hundreds of major construction projects around the country, and the union’s close ties to the federal and state Labor Party, with some party members working at the union before being elected to parliament.

Now, with the CFMEU under intense scrutiny, politicians and union officials are scrambling to contain the fallout and convince the public they will rid the powerful construction division of malpractice, while avoiding the step of deregistering the union.

How did this start?

The story began with the resignation of John Setka on Friday evening, just before this investigation was published. With allegations put to him by this masthead, he stood down ahead of publication on Saturday to try to limit fallout and scrutiny of the union.

In a statement on Friday, the union said the decision was because of “ongoing and relentless stories written with multiple allegations whether true or not about this great union”.

Setka said he had “proudly served this union in the capacity of an official for close to 40 years and as secretary for the past 12 years.

“These stories have been constant, and while I’ve been the target of many of them, enough is enough. The ongoing false allegations continually do nothing but harm the work this great union does for its members.”

John Setka leaves a CFMEU meeting in Melbourne last month.Credit: Eamon Gallagher

Prime Minister Anthony Albanese responded to news of the resignation with “good”.

But the allegations are not confined to the actions of the controversial former union boss.

Bikies and crooks in the construction industry

The first of the explosive reports, published on Saturday, included secret surveillance vision revealing how bikies, criminals and underworld figures had infiltrated the building industry.

Many of the bikies and criminals acting as CFMEU delegates are employed on federal and state government-funded projects, particularly Victoria’s $100 billion Big Build road and rail infrastructure program, amid a systemic failure of policing agencies to combat the problems.

Setka caught on tape delivering threatening message to rival

On Sunday, vision was published of Setka making a menacing nighttime visit to the home of CFMEU assistant national secretary Leo Skourdoumbis to dump a suitcase scrawled with a message attacking the official as a “dog”.

Skourdoumbis has been fighting for several years to separate his arm of the CFMEU, which covers manufacturing, from the Setka-controlled construction division.

The suitcase that CFMEU assistant national secretary Leo Skourdoumbis says John Setka left on his driveway.

The footage also showed another top union official boasting about how the CFMEU secretly controls the Big Build program in Victoria and can block companies from government sites.

Secret audio shows the alleged CFMEU kickback plan

Further audio uncovered by this masthead captured an undercover sting operation, recording self-styled CFMEU fixer and business consultant Harry Korras claiming he could funnel large cash payments and regular kickbacks to his “good friends” in the CFMEU.

In return, he said, the union would push favoured firms onto construction sites involved in the Big Build program, which is being funded by both the Victorian and federal governments.

Korras’ comments recorded on tape contrast with his strong denials to this masthead that he had ever arranged CFMEU agreements in return for union payments. He said he “didn’t have a clue” about the building industry.

Asked by this masthead if he had ever helped a company get a CFMEU enterprise bargaining agreement in return for union kickbacks or payments, Korras said: “Absolutely not.”

The fallout: Union officials and governments respond

CFMEU national secretary Zach Smith said on Monday that he would lead the clean-up of the affected branches and placed the Victoria-Tasmania branch into administration, followed by the South Australian branch on Wednesday.

“We have zero tolerance for criminality. Anyone found to have engaged in criminal conduct while representing the CFMEU will be identified and removed,” he said in a statement published online on Monday.

However, he praised Setka and defended the union overall, saying it “will never tear down an official who is doing a good job for construction workers simply because they are seen as unsavoury by people who have never set foot on a site”.

“We will never turn our backs on people who want to help workers, regardless of their past,” he said.

ACTU secretary Sally McManus said the CFMEU should act to expel anyone accused of criminal conduct from the ranks of the union.

CFMEU flags fly from a crane near the Sydney Harbour Bridge on Tuesday.Credit: Peter Rae

Victorian Premier Jacinta Allan and NSW Premier Chris Minns have both moved to suspend the CFMEU from the state Labor parties and called for a pause on political donations from the union. They have also backed calls to sack prominent figures under criminal investigation.

The federal government announced on Wednesday that an independent administrator would be appointed to take control of the union. Workplace Relations Minister Tony Bourke said he had written to the AFP asking it to investigate allegations.

The federal opposition called for the union to be deregistered and for the federal government to re-establish the Australian Building and Construction Commission.

Additionally, Victoria’s truth-telling inquiry, the Yoorrook Justice Commission, will probe allegations that First Nations workers have been mistreated on building sites, following revelations that the CFMEU banned Indigenous firms that weren’t aligned with the construction union.

Other key players under fire

Besides Setka, two other senior members of the union have come under fire: Derek Christopher, who is positioning to replace Setka as the Victoria-Tasmania leader, and NSW branch boss Darren Greenfield.

Christopher received about $200,000 in free labour and supplies from major building companies and remains the subject of an ongoing police corruption probe. He has not been charged and there is no suggestion an offence has been committed.

Meanwhile, video surfaced of Greenfield allegedly being passed a $5000 bundle of cash as part of a suspected kickback deal involving money traded for union backing. Greenfield has been charged over the issue and is defending the case, which remains before the courts. There is no suggestion that Greenfield is guilty.

The reporting will continue over the coming days.

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