Controversial deal struck between Labor and unions in the lead up to the federal election
The CFMEU branch headed by union heavyweight John Setka has given a huge amount of money to Labor but the payments will not count as donations.
Labor received hundreds of thousands of dollars from the CFMEU branch headed by controversial union heavyweight John Setka to use towards its federal election campaign in a deal that settled legal bills from a failed lawsuit against the party’s federal intervention in Victoria.
Mr Setka, who heads the construction division of the CFMEU in Victoria, was one of the plaintiffs in a case brought by several Victorian unions that tried and failed to overturn the 2020 ALP National Executive decision to suspend the state’s branch in the wake of allegations of branch stacking aired by 60 Minutes.
The case and a subsequent appeal failed leaving the unions forced to pay close to a million dollars in costs to the ALP, according to sources familiar with the case.
But it is understood a deal was struck in the lead-up to the election by the unions and ALP National Secretary, Paul Erickson, which ended the dispute with the unions providing about$700,000 to the party’s federal secretariat to be put towards the campaign.
A Labor source said several hundred thousand dollars had also gone to the Victorian branch of the ALP.
The bulk of the money, believed to be about $500,000 in the case of the Feds, came from the CFMEU.
As the money was paid to settle the unions’ legal bill, it will not count as a donation.
But union official said the impending federal election had provided an impetus to settle the dispute.
“We made it clear to them that the longer this went on all that was happening was the costs were coming out of the pile we were going to give them,” a union official said.
A senior Labor source said the amount the unions had paid to the party was higher than they would have received if the matter had been arbitration.
“More than we would have got at taxation,” the source said.
In 2019 Mr Setka was forced out of the ALP by then Opposition Leader Anthony Albanese over remarks he made about domestic violence campaigner Rosie Batty.
Accepting donations from this union has in recent times become controversial.
Earlier this year South Australian Premier John Malinauskas forced the SA Labor to return a $125,000 donation from the union which the party had received ahead of the March state election.
The move was prompted by concerns about a Setka-led takeover of the state’s CFMEU branch.
The end of the court fight does not mean that peace has been restored between the Setka-led CFMEU and the ALP.
“We have resolved our litigation, I wouldn’t go further than that,” a federal party source said.
“It was in the party’s interest to bring that to a conclusion.”
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Originally published as Controversial deal struck between Labor and unions in the lead up to the federal election
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