Since 2011, the Liberals have viewed ‘union corruption’ as both their ticket to power and as a central tool in their attempt to condition the Australian public for their industrial relations agenda.
It’s easy to forget the ferocity of the Liberal campaign against then federal Labor MP and former leading Health Services Union official Craig Thomson that was unleashed in 2011. The opposition bayed for blood and fostered a media frenzy over allegations of his corrupt behaviour as a union official in the belief that the minority Labor government, which then held power in the federal parliament by a single seat, would fall.
Liberal strategists saw the opportunity to tarnish then prime minister Julia Gillard with the same brush of ‘union corruption’ by dusting off old rumours about legal advice she was alleged to have provided in connection with the Australian Workers’ Union slush fund. Weak as the evidence was, and tenuous as the ‘union corruption’ link was, it would have to do.
Still apprehensive about the united and effective Your Rights at Work campaign that forced the Howard Liberal government from power in 2007, the AWU and HSU scandals combined did not quite amount to the ammunition the Abbott government needed to mount a full-scale attack on the trade union movement immediately following his election in September 2013.
Fairfax & ABC’s ‘joint investigation’
But the ABC and Fairfax Media stepped in to provide the government with the justification it needed to broaden its promised judicial inquiry into the AWU into a fully-fledged royal commission which targeted five trade unions and demanded the last seven years’ worth of financial, contractual and personnel records from every branch of the named unions.
A joint investigation by the ABC’s 7.30 Report and Fairfax Media resulted in a series of stories being published and aired on January 28 and 29, 2014, which alleged widespread criminality, intimidation and corruption in the construction industry. Dramatic CCTV footage of Comanchero bikies apparently trying to collect a debt from the Master Builders Association’s Trevor Evans at his home opened the 7.30 Report. The reporter failed to explain how this incident was connected with construction workers or their union.
Since January last year, the 7.30 Report in particular has provided a platform to anyone with a grievance against the Construction, Forestry, Mining and Energy Union (CFMEU). This has ranged from disgruntled union officials to dodgy builders, from organised crime figures with scores to settle to the head of the Fair Work Building Industry Inspectorate (FWBC), Nigel Hadgkiss.
The central allegation reported in Fairfax Media in January last year was: “Union officials have formed corrupt relationships with organised crime figures, receiving kickbacks in exchange for arranging lucrative contracts in the construction industry.” The ABC alleged “systemic bribery” of union officials. The investigation claimed that six Victorian CFMEU officials had received bribes.
Victorian organiser Danny Berardi resigned from his position when journalists provided evidence that he had accepted free renovation work in exchange for helping two companies get contracts. However, aside from Berardi, no other details or names were provided: “For legal reasons specific details cannot be aired,” the ABC said.
The 7.30 Report ran a story on 28 January featuring an interview with CFMEU NSW official Brian Fitzpatrick who alleged that there were links between NSW union officials and companies run by alleged crime figure George Alex.
The following night it ran a story featuring an interview with Victorian builder Andrew Zaf, who claimed he had provided $10,000 in roofing material to CFMEU Victorian Secretary John Setka, then a union organiser, in the mid-1990s. He also claimed he had written a cheque for $10,000-$12,000 to pay for Sinn Féin leader Gerry Adams to visit Australia. Against footage of Adams’s 1999 visit, reporter Nick McKenzie said: “When the union brought Irish republican leader to Australia, Zaf was asked to chip in.”
Widening the scope
The ABC and Fairfax both claimed credit for the government’s move to establish the Heydon Royal Commission into Trade Union Governance and Corruption, which was announced less than a fortnight after their joint investigation. “The scope of the inquiry was dramatically widened into a royal commission after extensive reports in Fairfax Media,” Fairfax journalists wrote in a subsequent article.
In the same edition of the 7.30 Report on 29 January that featured Andrew Zaf, host Leigh Sales later interviewed Treasurer Joe Hockey and helpfully opened with: “The revelations of union corruption have given the Abbott Government ammunition to argue both the case for more union oversight and for an inquiry into corruption.” Then, to Hockey: “Do you think that a royal commission into union corruption is warranted?”
He replied: “Well certainly we promised before the election to have a judicial review, but there is mounting evidence now that there are systemic problems in the union movement that need to be fully exposed and addressed.”
Later in the year, businessperson Jim Byrnes starred in an episode of the 7.30 Report in which he claimed he had seen his rival George Alex pass an envelope, which conveniently had “$3,000” written on it, to NSW CFMEU organiser Darren Greenfield at a meeting. Byrnes’s is to date the only “eyewitness” account of a union official accepting a bribe. Greenfield denies ever having been in any meeting together with Byrnes in his life.
The royal commission itself has since shown many of the claims made by the ABC and Fairfax to be either totally false or unsubstantiated.
There’s a big difference between widespread corruption in the construction industry and widespread corruption in the construction union.
CFMEU leaders said they were in full agreement with the view that organised crime was rife in the industry, and that they had been pressing for years for the police and the corporate regulator, Australian Securities and Investments Commission (ASIC), to investigate criminal activity. It also pointed out that the union plays “no part in deciding whether particular labour hire companies got contracts on construction projects,” nor is it “in a position to check the property, or other interests or connections of employers and managers of companies”.
Before the Fitzpatrick allegations about CFMEU officials in NSW collaborating with George Alex were publicly aired, the claim was already the subject of an internal union investigation and the NSW branch of the union had recovered $250,000 in unpaid workers’ entitlements from Alex companies.
As the CFMEU legal team wrote in their response to the final submissions of Jeremy Stoljar, Counsel Assisting the Commission, “The investigation into allegations made by Mr Fitzpatrick about the relationship between the NSW Branch and the Alex Companies is ongoing. The most serious of the allegations arising from that investigation, that officers of the NSW branch received cash bribes, was, as Counsel Assisting submits, unsubstantiated. There was insufficient evidence. A similar allegation by [Lis-Con boss Eoin] O’Neill that officers in the Queensland branch sought cash payments is also described as unsubstantiated.”
Jim Byrnes, who later repeated his allegations before the Commission following his September appearance on the 7.30 Report, admitted on air that he had fallen out with Alex and said: “I’d like to see him in prison. Cause I’d like, I’d like him to have someone just lean over his shoulder and whisper my name in his ear.” Byrnes served time in jail for supplying heroin and assault before acting as an adviser to notoriously corrupt and bankrupted businessman Alan Bond, and has been banned by ASIC twice from managing companies.
An allegation – reported as fact by the Herald Sun in August 2014 and repeated by Victorian Police Assistant Commissioner Stephen Fontana to the Heydon Royal Commission in September 2014 – that one of the Comancheros collecting a debt in the 7.30 Report’s January 2014 footage, Norm Meyer, was a CFMEU official, was categorically denied by the union.
Fontana claimed in the Commission that he had police intelligence that showed several “union officials” were “members of outlaw motorcycle gangs”.
In a cross-examination by CFMEU counsel John Agius, which really ought to be immortalised in song, Fontana admitted that by “union officials” he meant “union official”, specifically Norm Meyer, and by “police intelligence” he meant a photo of a union rally he had seen in the Herald Sun.
After Agius informed him that not only was Meyer not a union official, he had not even been a financial member of the union for the previous two years, Fontana admitted: “I got that wrong. I apologise.” Pressed further by Agius who asked, “So there’s no intelligence or evidence that any union officials of the CFMEU are members of an outlaw motorcycle gang?,” Fontana replied, “Not to my knowledge.”
Fontana then conceded under questioning that no CFMEU official had ever been charged with blackmail, corruption or drug crimes despite his opening claims that he believed union officials were involved in these crimes. This didn’t stop the Herald Sun from running an utterly dishonest editorial on 20 September 2014 in which Fontana’s initial claims, but not his retractions, were reported. It was titled, “Muzzle union things now”.
And as for Andrew Zaf, he has emerged as the most thoroughly discredited witness to appear before the Commission yet, with the exception of Kathy Jackson. The trip by Gerry Adams to Australia that Zaf referred to was organised independently by Irish solidarity organisations, not by the CFMEU, and the international air fares were purchased by Sinn Féin’s Belfast office.
Zaf had claimed in January that he paid for the trip that occurred in 1999; before the Commission on 17 September 2014 he said his records from ANZ Bank show he had written a cheque for $10,000 in 1997, and moments later he said he wrote this cheque prior to 1994. It’s on the public record that Adams was denied an entry visa to Australia until 1999, after the Good Friday Agreement was signed in 1998.
In July Zaf told the Commission he had “no personal enemies” only to be threatened by Hells Angels over a disputed debt four days later. In his September appearance Zaf was forced to deny having pulled a gun on then CFMEU organiser Maurice Hill in 1994. Evidence was produced showing the Victorian Trades Hall Council had passed a motion condemning the incident at the time.
Finally, in November, Slater and Gordon lawyers acting for the CFMEU wrote to the Commission enclosing a statement from Victorian Trades Hall Council Secretary Luke Hilakari that included information about Zaf from a former associate that challenged the evidence he had provided to the Commission. Heydon agreed to omit any reference to Zaf’s allegations from his interim report.
Shoddy and unsubstantiated
So what was actually demonstrated by the ABC-Fairfax joint investigation was that motorcycle gangs and organised crime figures are involved in the construction industry, and that one junior CFMEU official acted corruptly and immediately resigned after the union leadership was made aware of this. Hardly a justification for a royal commission into the entire trade union movement.
Generally when a media outlet claims it cannot publish specific details or name names for “legal reasons”, that means it doesn’t have the evidence to back up an allegation that could withstand a defamation suit. Given the dubious quality of the “whistleblowers” the ABC and Fairfax are relying on for these “specific details”, and the unbelievably woeful fact-checking of the journalists, you’ll forgive me for looking at their entire investigation with a healthy amount of skepticism.
These sensationalist, poorly researched and unsubstantiated articles, which were enthusiastically seized upon by the Abbott government to launch the Heydon royal commission, should be a source of embarrassment to the ABC and Fairfax Media, not a source of pride.