Lawlessness, violence: Anti-corruption expert unveils interim CFMEU findings

Victoria’s CFMEU branch was caught in a cycle of “lawlessness” where violence was accepted while the union’s management lost control because of underworld connections, a leading anti-corruption expert says in a report.

An interim report by Geoffrey Watson, SC, a barrister appointed to investigate allegations against the CFMEU, was released by the union’s administrator on Monday.

Geoffrey Watson, SC, has released his interim findings in an investigation into the CFMEU’s Victorian branch.Credit: Rebecca Hallas

In the report, Watson said his interim findings backed the revelations in the Building Bad investigation by this masthead, The Australian Financial Review and 60 Minutes of alleged criminality and intimidation in the union’s NSW and Victorian branches.

Watson said while his investigation was incomplete, “the information I uncovered supported the accuracy of the allegations of criminal and corrupt conduct raised in the Building Bad series”.

“Based on the information uncovered during my investigation, the Victorian branch has been caught up in a cycle of lawlessness, where violence was an accepted part of the culture, and threats of violence were a substitute for reasoned negotiations,” the report said.

The report cited one example in which an organiser for the CFMEU’s Victorian branch introduced himself as someone who worked for the union and then allegedly threatened the owners of an Indigenous labour-hire firm.

The organiser allegedly told the owners, “I’ll f---ing take your soul and I’ll rip your f---ing head off”, and was an incident other union officials regarded as “unexceptional”, Watson said.

There was a general acceptance among union officials that threats, intimidation and violence were part of the landscape of the Victorian branch of the CFMEU, he said.

Officials held a “stubborn refusal” to get police involved as they were regarded as almost the enemy.

“One senior official said he could give me ‘1000 cases where workers have been stood over and bashed’ and said that ‘all the police do, is turn around and go after unions’,” Watson said.

He noted the scope of his investigation was curtailed by threats of violence made against senior union officials who were seen to be “lagging” or giving people up to police.

Because of this, Watson was instructed to avoid contacting third parties including journalists, employers and former delegates in his investigation to avoid creating a risk of violence.

“It appeared to me that, in this cycle of intimidation and violence, the CFMEU had lost control,” Watson said.

The anti-corruption expert made seven recommendations in the report, including that the Victorian CFMEU branch build relationships with police, and administrators look further into instances of violence, threats and abuse.

Mick Gatto (left) and then-CFMEU leader John Setka in 2018.Credit: AAP

The report found the Victorian branch was infiltrated by outlaw motorcycle gangs and organised crime figures, and one senior official said underworld figure Mick Gatto “came with the furniture of the job”.

Some officials said they saw or met with Gatto or Faruk Orman – a former Melbourne gangland figure – at the CFMEU’s Melbourne offices, with enterprise bargaining agreement (EBA) paperwork sometimes brought to Gatto. Others described Gatto as a friend.

The Victorian branch has entered into several EBAs with entities owned, controlled by or associated with Orman, the report said.

Through that process, an EBA was “treated as a financially valuable commodity, given to an underworld figure with no industry background who was close to Mick Gatto”, Watson’s report said.

Integrity expert Geoffrey Watson, SC, investigated allegations of criminality and intimidation in the CFMEU.Credit: Alex Ellinghausen

Gatto declined to discuss the report when contacted on Monday, other than to say they were “rubbish”.

“I have been looking after builders for 30 years. I don’t work for the union,” he said.

Watson noted the Victorian branch had moved to remove some bikies from their positions after the Building Bad series was published.

But he branded as “superficial” the branch’s investigation to find out who were members of outlaw motorcycle gangs.

He also said the “process was ineffective at removing the influence of these men” because they had swapped their union roles for jobs with the project companies, and they remained on building sites.

“Almost all of the people on the list remained with the same employer, in a different capacity (for example, switching from paid employment as a union delegate to paid employment working for the employer directly as a health and safety officer),” Watson said in the report.

The EBA process was vulnerable to corruption, the report said, as organisers were tasked with assessing whether an entity should be “given” a CFMEU-endorsed EBA.

“Based on the information provided to me, there was no formal criteria that governed an organiser’s assessment of an entity’s suitability and no requirement to keep any record of the approval decision or the reasons for the decision,” Watson said.

Watson said he was told union officials believed it was helpful to have connections with bikies and organised crime figures as a counterweight to intimidation tactics used by employers.

Union officials claimed company bosses, including large contractors, engaged organised crime figures and bikies to stand over and scare them.

“One official told me that a ‘whole heap of bosses employ standover people’,” the report says.

A spokesperson for the Master Builders Association Victoria would not address the allegation that contractors used criminal figures to intimidate unionists. However, the spokesperson said other elements of the report showed “the magnitude of the task ahead” to reform the CFMEU.

Protesters at the CFMEU rally in Melbourne on August 27.Credit: Jason South

CFMEU national secretary Zach Smith appointed Watson, who was a counsel assisting the NSW Independent Commission Against Corruption, to investigate the allegations against the union.

Federal Workplace Relations Minister Murray Watt said the interim report showed the government had taken the right step putting the union into administration.

“The report also makes clear that industry figures outside the union also require investigation of their conduct and we support this occurring,” Watt said.

Tens of thousands of CFMEU members and supporters are expected to down tools and rally in Melbourne’s CBD on Wednesday to protest against the union’s administration, after a similar rally that drew about 50,000 people last month.

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