CFMEU, health union probed over alleged millions spent on ghost printing

Two of Australia’s most prominent trade union figures, ex-CFMEU boss John Setka and the Victorian head of the Health Services Union, Diana Asmar, are facing a multi-agency investigation into allegations that more than $3 million of union money was paid to printing firms for non-existent or ghost services.

Asmar, a one-time Labor Party powerbroker who has sought credit for exposing corrupt former health union head Kathy Jackson, is now also separately facing questions over almost $200,000 of members’ funds she allegedly spent on work expenses, including Gold Class movie tickets, alcohol, meals and items from IKEA.

The Health Workers Union and its secretary, Diana Asmar, are being investigated by the Fair Work Commission.Credit: Luis Enrique Ascui

The allegations of ghost printing payments and Asmar’s work expenses create a fresh headache for the Albanese government, calling into question previous efforts to clean up unions exposed at the Heydon royal commission.

Documents seen by this masthead outline serious alleged malfeasance at the HSU’s Asmar-led branch, and also raise the prospect that the Fair Work Commission may force it into administration, mirroring efforts to install administrators over several crisis-plagued CFMEU branches.

The Building Bad investigation by this masthead has confirmed Victoria Police and the Fair Work Commission are investigating a money trail of more than $3 million in alleged ghost services.

The Asmar-controlled Victorian branch, known as the Health Workers Union, allegedly funnelled through the scheme almost $2.8 million in union dues paid by some of the nation’s lowest-paid healthcare workers. It is also alleged the CFMEU separately sent $180,000 in members’ fees via the scheme now being probed by the FWC and detectives.

Information was provided to police in relation to allegations of false invoices linked to a union and a private company.

Victoria Police statement

The funds were allegedly sent to select printing firms after false invoices were issued, with investigators still working to determine how the funds were later used.

One line of inquiry being pursued by the FWC is whether the $180,000 sent by the CFMEU to a printing firm might have been redirected to support Asmar’s union election campaign in 2022 – a campaign in which she was elected unopposed.

A candidate had nominated to contest Asmar at the union election, but was struck out of the race months before voting started.

In response to questions, Victoria Police said it was running an active fraud investigation and that detectives from its financial crime squad had executed two warrants in May.

CFMEU national secretary Zach Smith outside the Federal Court in Melbourne on Monday.Credit: Eamon Gallagher

“The investigation commenced in October 2023 after information was provided to police in relation to allegations of false invoices linked to a union and a private company,” the police statement said. “As the investigation is ongoing, it would be inappropriate to comment further at this time.”

While Fair Work Commission general manager Murray Furlong said he could not provide details about an “ongoing operational matter”, he stressed that “deliberate or fraudulent alleged conduct relating to the misappropriation of funds will give rise to swift, focused and well-resourced investigation and enforcement action”.

Setka and the union’s national secretary, Zach Smith, have both declined to comment on why the CFMEU purportedly sent funds via a printing company to support Asmar’s uncontested election.

Smith attended the Federal Court on Monday as the CFMEU fights the federal government’s attempt to install administrators.

Asmar also declined to comment.

Confidential documents seen by this masthead reveal that Victoria Police and the Fair Work Commission are probing whether a firm called Southern Publishing was used by the HWU to corruptly divert money for personal enrichment, including political gain.

Investigators are examining why Southern Publishing – one of three aligned printing companies that received funds from the HWU and CFMEU – issued multiple invoices to Asmar’s union branch that were paid for on the same day but in the alleged absence of any documents showing the company performed any work.

When contacted by this masthead, the director of the print firms said he was advised by his lawyers not to provide comment.

The HWU, representing 16,000 hospital cleaners, orderlies and clerical staff, is the largest of the Health Services Union’s four Victorian branches and was previously headed by Kathy Jackson’s ex-husband Jeff Jackson.

In 2020, it masked almost half a million dollars in losses by, legally, counting a L’Oreal pandemic giveaway to hospital workers as revenue in its financial report.

During that year, Asmar’s branch spent $484,965 on printing, dwarfing the $17,000 to $20,000 average print spend of its sister union, the Health and Community Services Union, which has 11,000 members. The HWU went on to spend more than $500,000 a year on printing in 2021 and 2022.

Disclosure statements show that from June 2020 to June 2022, Asmar’s salary increased by 17 per cent, from $171,000 to $200,000, excluding superannuation.

Previous ALP slush fund and corruption scandals have involved printing firms or other service providers allegedly being used to conceal the improper movement of union funds.

The revelation that the CFMEU is allegedly involved in the ghost printing scandal broadens the crisis already engulfing the construction union.

The FWC is seeking to place the CFMEU’s Victorian, NSW, Queensland and South Australian branches into administration following a months-long investigation into the CFMEU by this masthead, 60 Minutes and The Australian Financial Review, which has uncovered infiltration of the union by bikies and organised criminals, intimidation and allegations of corruption.

For the Health Services Union, the revelations raise questions about why previous investigations and attempts to reform the union – which included the charging and conviction of several of its former senior officials – failed to clean up the culture within its largest Victorian branch.

Asmar, who has run the branch since 2012, used her political influence to back the career of federal Labor senator Kimberley Kitching, who died suddenly in March 2022, and was formerly a driving force in an ALP Right faction that wielded influence in the party’s federal and state ranks.

However, political sources said Asmar had been increasingly isolated from the party as former key backers, including senior minister Bill Shorten, severed their ties with the union leader.

Documents seen by this masthead also reveal Asmar is facing serious allegations that she misused union funds to pay for personal expenses and attempted to cover up her conduct by doctoring receipts.

A March 2024 memo written by a Fair Work Commission investigator reveals the union watchdog holds “concerns relating to the payment of reimbursements to Ms Diana Asmar by the Branch”, and is investigating an amount “totalling over $198,000 … received by Ms Asmar” between 2017 and 2021.

“About $124,000 in payments to Ms Asmar are wholly unsupported by any documentation able to be produced by the branch,” the commission’s letter alleges.

In respect to some of the receipts provided by the union to justify Asmar’s expenses, the commission has uncovered “a number of anomalies”, including reimbursements paid to Asmar prior to her buying the goods in question, “deletions or redactions” to documents, and instances in which the same receipt appears to have been used to justify two different expenses.

“There are some instances where the same expenditure appears to have been claimed on two separate claim forms, and Ms Asmar has received the benefit of payment of the same amount twice, resulting in an apparent unjust enrichment,” it said.

One case study documented in the FWC memo involves Asmar’s apparent purchase of Gold Class movie tickets at Crown casino, an expense investigators have queried may not “relate to a proper business expenditure” of a union.

The commission also cites records that it said showed Asmar’s movie ticket purchase occurred “more than two years after it was purportedly claimed by Ms Asmar on a reimbursement claim form”.

Union funds were allegedly spent at a Squires Loft restaurant.

The commission has also uncovered receipts that suggest Asmar was reimbursed by the union for goods actually bought by her husband, including a $1695 camera lens bought in Sydney in 2016.

Asmar also allegedly claimed for expenses related to purchases made by another union employee at a pancake restaurant, a liquor store and a Squires Loft steak house.

On another occasion, Asmar was reimbursed $268 by her union for a purchase made at IKEA “523 days before the reimbursement date”.

Several union sources, who spoke to this masthead on condition of anonymity, said the discrepancies and allegations being pursued by the FWC had alarmed the union’s national executive and interstate branches, who are pushing for Asmar to be held to account for any proven misbehaviour.

The commission has also been investigating allegations the HWU secretly funnelled union money into a training organisation, the Health Education Federation (HEF), which was investigated by Victoria’s Independent Broad-based Anti-corruption Commission.

That IBAC investigation found HEF was improperly awarded a $1.2 million contract by the Victorian government on the eve of the 2018 state election. It found the office of then-premier Daniel Andrews, Asmar and ministerial staff had pressured the department to do so, they said, but the union’s finances were outside the watchdog’s remit.

In 2015, the HWU was linked to Labor Party branch stacking, with its computers used to pay for multiple Labor memberships with anonymous gift cards.

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