[Theme Music Starts]

DANIEL:

From Schwartz Media, I’m Daniel James. This is 7am.

When footage of a CFMEU “health inspector” assaulting a woman was made public last week, it shocked a lot of people. But many union members weren’t surprised.

It’s been six months since the CFMEU, one of Australia’s most powerful unions, was put under federal administration. But now the lawyer tasked with investigating corruption is openly saying not only has it not improved, it’s worse than he could have imagined.

Today, associate editor of The Saturday Paper Martin McKenzie-Murray, on the union members fighting back and whether the CFMEU can be saved.

And just a warning, there’s some strong language in this episode.

It’s Monday, March 24.

[Theme Music Ends]

DANIEL:

Marty, you got a lot of contacts within the CFMEU, so I imagine you were getting hounded last week after the 60 Minutes exposé. What were you hearing?

MARTIN:

There are a lot of conversations, but the footage, for instance, of a dubiously appointed health inspector to the CFMEU bashing a woman on site might have shocked the public. It didn't shock anyone I was speaking to.

Audio Excerpt - CFMEU health inspector:

““F---ing smash you, f---ing c--t.”

Audio Excerpt - Reporter voiceover:

“What it showed was utterly shocking.”

Audio Excerpt - Unidentified woman:

[screams]

Audio Excerpt - CFMEU health inspector:

“You f---ing stabbed me, you f---ing dog. I promise you’ll pay, you're f---ed.”

Audio Excerpt - Reporter voiceover:

“It’s a cowardly attack on a woman, carried out by a CFMEU Health and Safety Representative.”

MARTIN:

In fact, one person said to me, see, I've been fucking telling you these gangsters have gone fucking nowhere. And the surprise appearance of the eminent barrister, Geoffrey Watson who was appointed by the administration to investigate corruption, his surprising appearance was very pleasing to people because they saw a man at pains to describe the scale of corruption.

Audio Excerpt - Geoffrey Watson:

“You can see what's happened. It's just become a place of, a resort or retreat, for bikies to come in and take control over business. It's like a cancer spreading.”

MARTIN:

The next day, following Sunday evening 60 Minutes, national secretary Zach Smith issuing a call. An emergency meeting amongst shop stewards would be held the next morning, that is Tuesday at 10am, and attendance was compulsory.

DANIEL:

So the meeting was called as a matter of urgency, it was compulsory. What came out of that emergency meeting?

MARTIN:

So, I knew a number there and soon after the meeting ended, I saw the three resolutions that emerged from that meeting.

There's two rather thin pages comprised of these three resolutions and, I got to say, number one and number two were kind of thin and platitudinous and unsurprising. So, in the first resolution they resolved to denounce the bashing of women, unsurprisingly. Number two, resolve to denounce the insinuation of gangsters in their union. Well, of course, that was... they were obliged to say that. But resolution number three interested me. For one, it spoke to a proposal to revise the eligibility criteria of shop stewards. This might seem like a small or trivial or prosaic matter, but it actually speaks, I think, to the heart of corruption. And the reason it surprised me is that the proposed eligibility criteria for shop stewards, which included the fact that they should be members of the union for at least five years, that they should demonstrate certain values that accord with the union, that they sign the national code of conduct and critically, that they be nominated and voted on by their own peers, were all proposals. Now this is offered as evidence of their commitment to reforming the union. But it begs the question, this is what I find interesting. The revised eligibility, these standards are so basic that it begs the question of why they weren't imposed earlier, and why indeed they weren't imposed by the administration itself, given its six month lifespan so far.

DANIEL:

Tell me what it is a shop steward actually does and why this proposal is so significant.

MARTIN:

So a shop steward is one of the most basic elemental critical positions in the union. They're the union representative on the floor of a site. So let's say a factory floor, union members on that site should, ideally, theoretically, that doesn't happen, vote upon their union representative who on that work site will represent them to management. What's happened, what's one of the many processes that have been corrupted, is that democratic process of nomination and appointment has more or less been discarded.

When you circumvent the democratic process, incredibly dubious people are appointed. Gangsters, people with heavy, heavy criminal convictions, people allegedly dealing drugs from sites and, critically, people with tiny or no experience in the industry.

DANIEL:

So they've got these new resolutions and peers will now pick the shop stewards. It all sounds pretty basic. So changing that, even if it should have happened much earlier, it's a step forward nonetheless?

MARTIN:

Well, I'm not so sure about that. The three resolutions are quite scant, and one thing you'll notice in resolution number three is it doesn't speak to whether or not these new criteria would apply retrospectively. Now, I seriously doubt that they will, and the reason for that is not many current shop stewards would actually fulfil the new proposed test. Now what's more, as one official pointed out to me, and this is a direct quote, you've got to be fucking kidding me. He says, what's the likelihood of, they open up this democratic process that should have always existed, but the problem being that the current shop steward on a site is a bikie. So what are the chances of someone now standing up to them and saying, I challenge you.

DANIEL:

Doesn't pass the much-vaunted pub test.

MARTIN:

No, no, and as one former leader said, if that resolution is not applied retrospectively, and they doubt it will be, then it's simply window dressing, what's been proposed.

DANIEL:

Coming up after the break – union members fight back.

RUBY:

Hi, Ruby Jones here.

7am tells stories that need to be told. Our journalism is founded on trust and independence.

And now, we're increasing our coverage.

Every Saturday until the election, we’ll bring you an extra episode, to break down the biggest political moments of the week.

If you enjoy 7am, the best way you can support us is by making a contribution at 7ampodcast.com.au/support.

Thanks for listening and supporting our work.

[Advertisement]

DANIEL:

When all this blew up, an administrator was appointed, Mark Irving KC. Can you tell me what his brief was and what he's done so far?

MARTIN:

So to clean up corruption, I mean this was the line that was offered a lot, to clean up corruption thoroughly and then return the union to members.

Audio Excerpt - Mark Irving KC:

“It is a core function of a union to make sure its own ranks are free of corruption. And, even though they might've been asleep on the job, part of the administration is to go in and to address wrongdoing within its own ranks and then within industry in general.”

MARTIN:

About Mark Irving himself, the same complaints have been made to me by so many people across several states. And that is that he is aloof, he gives the appearance of arrogance and he has repeatedly failed to communicate very basic things. Now, what has been done broadly? Well, Geoffrey Watson would say to us, not much on the corruption front, that the insinuation of gangsters on work sites, particularly in Victoria and particularly on government, state government projects, is as pregnant as ever.

DANIEL:

Marty, the union's progress in cleaning up its own act has been slow, but there's been some developments outside of the union. Can you tell me what's been happening there?

MARTIN:

So I learnt some months ago of this idea to run a class action against former Victorian leader John Setka as well as the union itself. This week, that proposed class action was finally made public by a Melbourne law firm called Adiro Law. So for about two months now, they've been speaking to, I think, several dozen current and former CFMEU members who have been blacklisted for a variety of reasons, but usually they're opposition to Setka himself, or a bunch of dubiously appointed delegates, shop stewards. They suspect the figure of allegedly blacklisted members could be about 300, and they're unaware of any legal basis for this.

DANIEL:

And what could some of the possible outcomes be from it?

MARTIN:

So one of the parties to this class action, a current member who has not worked for some time, is very excited about this and they're excited because they feel that in the process of discovery there could be the coercive powers of revealing phone records, for instance. So who called who at this point when suddenly a number of bikies arrived on site? Not only that but what government knew, particularly the Victorian state government, and trying to kind of sketch out some causality between the timing of calls and the appearance of certain people on sites.

DANIEL:

So you've just mentioned the state government who were funding a lot of the projects where this corruption was taking place. What's been their reaction to the latest revelations and this class action?

MARTIN:

In a word, pathetic, I think. What we've seen recently was rather farcical. Nine series of stories, that ran about seven months ago, and that triggered the appointment of a national administration. Obviously incredibly important and influential. But stories of the insinuation of gangsters on sites, the use of underworld figures to provide quote-unquote industrial relations services but which is effectively, allegedly, racketeering, this is an open secret. It has been for an extremely long time. But after the 60 Minutes story aired, Jacinta Allan announced a new police operation called Operation Hawk that would look into the allegations raised by Geoffrey Watson on 60 Minutes.

Audio Excerpt - Jacinta Allan:

"What we saw last night, with further revelations and information, was again shocking and completely unacceptable. Which is why this morning I met with the acting Chief Commissioner of Police, and it's why I support the actions that the Victoria Police are taking to immediately establish Operation Hawk. Operation Hawk will investigate these new allegations, but also to pursue a focus…"

MARTIN:

The problem with that, is that operation began about nine months ago. Now this embarrassed Victoria Police who had to put out a statement saying, well actually this operation already exists and has been going for some time, which exposed the government's kind of bizarre ignorance of it. And as I've reported before, as many, many members, officials, former leaders know, the union corruption cannot flourish on its own. It must be in party with others, dodgy developers and gangsters, and there's a fourth party. And that is the state government that has, one, enjoyed donations from this union, and two, for a long time, has tethered its ambitions to major public works. When the big build was announced, which is, you know, a range of civic works valued at about $100 billion, very conspicuous projects all over Victoria, particularly Melbourne, the Victorian government did not want a disruptive, uncooperative, aggressive union. They wanted a cooperative one. So there is a question to be asked here about the specific powers of state police, federal police, but also the motivation, curiosity, interest of the state government. One potential solution that has been floated by Peter Dutton, there's no detail on this, but I know of plenty in the union who actually consider it a good idea, is anti-racketeering legislation. Something that resembles what was introduced in America to combat gangsterism and particularly the Teamsters union.

I mean plenty think that if Peter Dutton-led government is elected, the CFMEU won't much longer exist.

DANIEL:

And if it does continue to exist, Marty, what will it take to clean it up in your view?

MARTIN:

I couldn't possibly say. If Geoffrey Watson looks like he has vertigo looking at the scale of corruption and when I see the political response in curiosity and kind of farcical media handling of stuff, I'm not sure I see an environment in which this can be effectively and quickly cleaned up.

DANIEL:

Marty, thank you so much for your time.

MARTIN:

Thank you sir.

[Advertisement]

[Theme Music Starts]

DANIEL:

Also in the news...

Australian households and about one million small businesses will get a $150 subsidy on their energy bills from July 1, the treasurer has announced.

The rebate is an extension of the government’s current subsidies and will run until the end of 2025 at least, with Jim Chalmers leaving the door open to extending them further.

And,

The head of the National Anti-Corruption Commission Paul Brereton has continued to hold senior roles in the Army Reserves, despite the watchdog investigating matters relating to defence.

When contacted by the ABC, the NACC confirmed Mr Brereton had recused himself of investigating six defence matters, but did not say whether he was involved in a referral relating to a $45 billion federal defence contract for building frigates.

The commission did confirm that Mr Brereton is self managing his own potential conflicts of interest. The revelations come ahead of the NACC appearing before a senate committee on Thursday.

I’m Daniel James, this is 7am. Thanks for listening.

[Theme Music Ends]

[Advertisement]