The Victorian branch of the construction union is “caught up in a cycle of lawlessness” and has been “infiltrated” by bikie and organised crime figures, according to an independent probe launched by the union before it was put into administration.
On Monday the union’s administrator, Mark Irving, released an interim report by barrister Geoffrey Watson stating that information he uncovered “supported the accuracy” of allegations of criminal and corrupt conduct first aired on 60 Minutes and in Nine newspapers.
But Watson warned his investigation is “incomplete” in part due to alleged “threats of violence” against those who participated and lack of powers to compel witnesses and evidence.
“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,” Watson’s report said.
Watson cited an incident caught on video in which a Victorian branch organiser “threatened two owners of an Indigenous labour hire firm, saying, among other things: ‘I’ll fucking take your soul and I’ll rip your fucking head off’”.
“When I raised that incident with officials in the Victorian branch, my impression was that they regarded it as unexceptional.”
Victorian branch officials had “also been subjected to threats, violence or abuse in connection with their work for the union”, he said, including one incident in which two organisers were bashed at a site in Hawthorn East, resulting in one losing his sight.
In July the national secretary, Zach Smith, called Watson in to investigate seven allegations including that senior bikie figures have been parachuted into lucrative roles as union delegates, and alleged kickbacks for union pay deals.
Watson concluded that “on the information available to me, I consider that the Victorian branch has been infiltrated by OMCG [outlaw motorcycle gangs] and by organised crime figures”.
Watson said the industrial relations environment is one in which “employers can be financially motivated to offer inducements to Victorian branch employees” to “give” a union pay deal, giving union officials a power that “is capable of being misused to confer favours or to fulfil corrupt bargains”.
Watson said in one instance a union pay deal was “treated as a financially valuable commodity, given to an underworld figure with no industry background who was close to Mick Gatto”, Faruk Orman.
Measures taken before the union was put into administration to weed out bikies and their associates were “inadequate”, Watson warned. Removing 12 delegates or work health and safety representatives with alleged bikie links after a “superficial” investigation “would not have captured all OMCG members”.
Watson said this process was “ineffective” with “almost all” retaining their influence in new roles and said he was “unconvinced” the Victorian branch had “a real intention to fix this problem”.
Watson revealed that “part-way through my investigation, I was told that threats of violence had been made, including against members of the executive team of the Victorian branch”.
“Because of those threats, I was instructed to refrain from contacting certain third parties”, he said, including journalists, employers and former delegates.
“Because my investigation is incomplete, I am unable to make specific findings about the conduct of particular officers or employees of the [Construction Forestry Maritime Employees Union].”
Watson made seven recommendations, many calling for further investigation.
In a statement, Irving noted that Watson’s investigation had been “limited by his powers and by the scope of the engagement”. “I will give a detailed response to the report in the coming days.”
The workplace relations minister, Murray Watt, said “even a report commissioned by the union itself has demonstrated [allegations of] widespread corruption, widespread infiltration by bikies and widespread violence connected to the CFMEU and the construction industry”.
“I think this is a demonstration of why it was so important that the CFMEU construction division was put into administration,” Watt told reporters in Canberra.
In August the Albanese government passed legislation to appoint an administrator to the CFMEU, which former officials are challenging in the high court, a case likely to be heard in November.
