Hi there, I’m Samantha Selinger-Morris the host of The Morning Edition, the daily news podcast from The Age and the Sydney Morning Herald.
We’re bringing you the best episodes of 2024, before your Morning Edition team returns in early January.
Today we’re taking you to the start of such a big story that the fall-out from it is still reverberating - the CFMEU scandal.
Investigative reporter Nick McKenzie, who broke the story, explains how the powerful construction union was infiltrated by criminals.
Hi there. I'm Samantha Selinger Morris, the host of The Morning Edition, the daily news podcast from The Age and The Sydney Morning Herald. We're bringing you the best episodes of 2024 before your Morning Edition team returns in early January. Today, we're taking you to the start of such a big story that the fallout from it is still reverberating the CFMEU scandal. Investigative reporter Nick McKenzie, who broke the story, explains how the powerful construction union was infiltrated by criminals. We're releasing it for you today on December 30th. So, Nick, before we get into bikie gangs and the underworld criminal infiltration of the construction wing of the CFMEU, can you tell me more about the construction union and how it actually got so powerful?
Well, it's been a very militant and effective power in the trade union movement for many, many years and a storied history of militancy, but also of, at times, dirty dealings. Uh, very influential in the ALP. With that political and industrial power has come the opportunity for corruption. Wherever there's political industrial power, that's obviously an open thing. And what we've discovered most recently in a bit of a repeat of the past, but things have got much worse, is that elements of the construction union have abused their power, have transferred their power to gangsters, bikies, ne'er do wells in a way that's really corrupted what should be the heart of the Union, which is to stand up for the working man and woman.
And so take me into who exactly is John Setka? Let's start there, because he's obviously at the heart of the power of this union.
Well, he was he resigned on Friday from the union, but he's left in his wake, a union that he built in Victoria. The CFMEU construction wing is is his baby. He's stacked it with his mates and cronies. There are some good people there, some independent people. But there's plenty who are not. Where does he come from? He's a product of the big bad old BLF that the Builders Labourers Federation back in the day, a union that was ultimately deregistered by the Hawke government because of corruption allegations. He was a hard man back then. He's built on that reputation to take over the CFMEU. He's been at the helm in Victoria for 12 years and it's been scandal after scandal after scandal.
And John Setka has now been removed as a member of the Australian Labor Party.
I have never, ever said I support mandatory vaccination. Never ever. I don't know what the latest allegations are, nor do I really care, to be quite honest. I'm just sick of it. Right. And my job is to protect the union and its members.
But in the last 18 months or so, things have changed, turned from bad to the Wild West. And this is where you've seen outlaw bikie bosses trading their bikie colours to become union delegates. You've seen gangsters is given the push by the union to represent companies in union disputes. You've seen organized crime outfits in Victoria and New South Wales build alliances with union officials in those states to win valuable subcontracts on state government jobs. And you've seen an absolute lack of appropriate response from state and federal labor until now.
Okay, I want to get into the response soon, but let's dig a bit deeper into the underworld figures that John Setka in particular, and the Union more broadly have been involved with. Because Mick Gatto was featured extensively in your investigation. He, of course, was one of the more notorious gangland figures in the 1990s. So can you please tell me more about his influence in the construction sector and the nature of his relationship with former CFMEU boss John Setka? Well, Mick.
Gatto is a notorious underworld figure. Must be said. He has no serious criminal convictions, but he's been aligned with the underworld for as long as anyone can remember in Victoria. He was caught out in the Cole Royal Commission in 2002 into the building industry as a Standover man, allegations he denies. But as for the last two decades, he's used his connections in the CFMEU, which are deep and abiding, to run a business as a building industry fixer. Got a problem with the union? You pay Mick Gatto, he'll sort it out chasing a debt from a building company. You pay Mick Gatto, he'll sort it out and it should be an obvious thing to say, but it perhaps should be said nevertheless. You shouldn't have underworld figures in bed with union officials or supported by union officials because the union's transferring its power to them. That you are legitimising these sorts of people. We expose the case of a guy called Sammy the Turk. Sam Urquhart, notorious gangster, Standover man in prison right now for a violent extortion until he was jailed a couple of weeks ago. He was running around Melbourne going to building firms, saying with the imprimatur of the union. In fact, pushed by one select union official. Union official says to company A used Sammy the Turk, he'll sort out your union or bikie problems. Pay him. She'll. She'll all be good. But. But even worse, the corruption, cronyism, jobs for mates, going to jobs, going union delegate jobs, going to bikies on state government jobs. The Victorian government's big build, our biggest rail and infrastructure projects this state has seen for for many years infiltrated thanks to union support and the involvement of some dodgy building companies infiltrated by organized crime underworld figures. Similar situation in New South Wales with state government projects there and a real ugly cartel type arrangement, dodgy unionists, dodgy company figures and policing agencies, and state and federal political forces governments doing nothing, all combining to create one hell of a rort.
You know, you mentioned there that Mick Gatto specifically, I wanted to ask you about this because you've had your own personal dealings with Mick Gatto. You interviewed him on a previous occasion, and he said to you, you'd better print the truth. And if you don't print the truth.
Now I know that. No issue with you. You don't print the truth. I've got a problem with you. And if I ever see you, I'll deal with you. You know, that doesn't.
Sound very nice, Mick.
Well, I mean, you know, I'll probably spit at you or something, you know?
So in light of that threat, how did you feel about taking on this story? I mean, did you have any reservations?
Listen, the story is not about me. I mean, I'm doing my job as a journalist, ultimately. Those I worry about are the whistleblowers and the guys who had the courage to stand up. We have the national secretary of the Cfmeu's manufacturing Division, Leo Shonduras, uh, on camera on the front page of The Age and the Sydney Morning Herald calling out corruption in the construction wing of the Union. I mean, what an absolute brave and principled person for doing so. But I worry about the blowback he will face because he's upsetting a lot in the union movement, the crooked elements. He's upsetting the bikie and underworld gravy train. So that's where my concern lies. Subcontractors, Small business owners have been getting stood over by a union aligned elements for a couple of years now in Victoria and New South Wales, and you worry about them.
So did you not even have a moment's pause after having a dealing with someone like that, an underworld figure, not even a moment of God? Is there a risk to me here?
Of course you think about that. But, um, I am just doing my job, and that's. And we shouldn't get distracted by by that. I think really what's important is to look at the victims of all this. And what they faced is a culture of fear and intimidation. And today of people talking to me, saying from the union, saying, I want to help you. I'll give you stuff off the record. But, you know, my wife has told me not to stick my head up because I'm scared the bikers will come after me, the gangsters will come after me. And that to think that's a state of affairs in Australia at the moment is pretty terrifying. Now, hopefully the changes that are being flagged and it's a bit of a moveable feast at the moment. But federal and state labor have said today they don't stand for this cronyism, intimidation, standover. And they're implementing different actions to they say get rid of the rot. Will it work? Well, we need to keep the scrutiny on his reporters.
We'll be right back.
Hi. Morning edition listeners, if you're looking for a series to binge over the break, I want to recommend Trial by Water. It's a podcast by some of my colleagues at The Age and the Sydney Morning Herald. It's about a man, Robert Farquharson, who was convicted of murdering his three sons by driving them into a dam, and about the people who are now questioning that conviction. Trial by Water is a compelling and informative podcast series that will make you question the way our justice system operates. So please take a listen and recommend it to your friends. Thanks. Well, let's talk about what happens next, because as you've just mentioned, there has been some movement from the government just before we started recording just now. Victorian Premier Jacinta Allan has asked the Victorian Police and IBAC, the independent broad based Anti-Corruption Commission, to investigate the allegations that your report has revealed. So, I mean, does this give you faith that finally people will stop turning a blind eye to the alleged corruption that people have been talking about for years?
Well, it's a start. I think the federal government, the Albanese government as well, has said it's a start.
They need to clean up their act. I have zero tolerance for it. The revelations that have been made in recent days need to be condemned in the strongest possible terms. The job of a union.
We've seen the national wing of the CFMEU, the construction wing, say it's going to place the state branch Victorian branch into administration.
Isn't unionism it's thuggish, unacceptable behaviour at its worst?
We've seen calls from the ACTU that those facing serious criminal allegations should stand aside. That should knock out the head of the CFMEU in New South Wales and the deputy head of the CFMEU in Victoria, both facing very serious criminal allegations, credible allegations, although of course will need to be tested in the judicial system in time. We've seen the Victorian government promise new anti-bikie laws to put them back on, on the table to ensure that an independent type inquiry looks at the giving of Ebas in Victoria. Has have they been corrupted? So there's a whole range of different changes that are being promised. But will they go far enough that this is an open secret? What we've uncovered, I'd love to say where you know the best journalists sleuths in the planet. It's not the case. This was an open secret. Everybody in the ALP, everybody in the construction sector knew about it. All we've done is put it on the table, say the broader community can take a glimpse. And frankly, what we what we put on the table was a tip of the iceberg. So given that's the case, then we can say that the agencies responsible have failed. The policing agencies haven't done enough. The regulatory agencies haven't done enough. And ultimately, the politicians who've known about this for a long time have not done enough.
And tell me just in terms of why our listeners should care about this. Can you tell us about, I guess, the role of the taxpayer in all of this? Because I'm assuming, you know, we are taking a hit as well because of the costs of building and construction. When the CFMEU gets involved. So can you walk me through that?
Well, people should care about it because they're paying for it. They are paying for the bikies to get jobs as union delegates on state government jobs. I mean, we gave the case of Joel Levitt, bikie figure locked up in Queensland, came down to Victoria, gets a cushy job, 250 K a year on a state government big build job. His union role is only discovered when the police uncover his involvement in a bikie war. He uses his big build government paid for car to drive to hospital bleeding. This bloke was a was a bikie with his bikie mates, exploiting state government jobs and getting paid by guess who, you and me and the taxpayer. And there's stories in abundance of that happening in Victoria. In New South Wales, there are significant labour hire companies controlled by organised crime getting pushed onto state government sites by the CFMEU. In New South Wales, we're paying for that, the taxpayers of New South Wales. We're all paying for that. Why else should we care? Well, the CFMEU has exercised great political power in this country. They affect to some degree in Victoria, for instance, Pre-selections, who gets to sit in Parliament. They get to affect labor ALP policy. Yes. Their political influence has been diminishing because of the scandal after scandal after scandal, but nevertheless they've helped shaped the labor political movement. That's why we should care.
So I'm just wondering, were you surprised then, that Treasurer Jim Chalmers, just on Monday morning, he was asked by Nine News whether the government would stop taking donations from the CFMEU, and he wouldn't say that he would. He said, you know, there are good reasons that ministers don't get involved in these decisions taken by party organizations. Overwhelmingly, the trade union movement is a force for good in our society and so forth, and that, you know, they'll do whatever necessary to clean it up. So what did you make of that comment? Well, it's.
A classic politician's answer there. I mean, I think everybody knows what's going on, a bit of ducking and weaving. But today, Premier of Victoria Jacinta Allan said she would suspend or ban for the time being donations from the CFMEU and also turf out the CFMEU, from from the ALP, the Victorian branch. I think the previous rush by which people have taken CFMEU donations is will be coming at least to a bit of a standstill for the time being, although we do know the power of money and donations and politics, which is again why we need to to keep the scrutiny of of this. The sad thing about this story is you could have looked at the state of the CFMEU in 2014, when there was a Royal commission called by the then coalition federal government and the gangsters and rorts and corruption and kickbacks that were going on back then. Over ten years or ten years have passed, and it's worse now than it was then. And that's after a royal commission, and that's after multiple police investigations. Well, I really.
Wanted to ask you whether you think it's even possible to rid the CFMEU of corruption. And I'm thinking about what CFMEU national secretary Zach Smith said on Friday. He said the union, quote, unapologetically believes in second chances, and that construction was one of the few industries where those with a criminal history could find steady work. So I'm just wondering if criminality or a vulnerability to criminality is really embedded within the fabric of the CFMEU. And if that's the case, how do you rid it of corruption?
Well, that comment and that statement was, I thought, a really alarming statement. I said, I'm all for as as is everybody, every Australian giving someone who's done their time a second chance, a job in whatever sector, they can go and earn an honest living. But for God's sake, do not give the national president or vice president of the Mongols or the Hells Angels whose got out of jail or got a serious conviction for a bashing or drugs or whatever it might be. Don't give them a job as a union delegate, because as a union delegate, they're exercising the union's power. How on earth do those workers on those sites where these x very senior bikie bosses have been given cushy union delegate positions? How do those members, those ordinary workers, go to that union delegate and not fear a repercussion when they complain about something? We can give them a second chances, as in other parts of the construction sector. Don't give them your industrial power. Don't. Don't trade away the union's power to these crooks. What's really going on is there's criminal networks running a cartel like operation with some building companies and some within the union. And that should be. That should be absolutely stopped. The national secretary, Zach Smith, said, we don't stand for criminality. Well, right now, the secretary of the New South Wales branch is facing criminal charges. Of course they need to be decided by a jury. Is he guilty or not guilty? He may well be not guilty, but while he's facing the most serious of corruption charges, he should stand aside from his post leading the union. That's not happened in Victoria. The deputy head of the CFMEU, Derrick Christopher. Very serious, credible evidence that he took $200,000 plus of kickbacks and supply and labor from big company bosses. He should be stood aside until these allegations are tested. Ultimately, they've been with the police for many years now. The police have said he's still under criminal investigation, but he's not a fit and proper person at the moment to be in that union. And these are just the known alleged crooks. Until the union's serious about getting rid of those, then there is little chance the union itself can lead that reform process.
I really wanted to ask you what impact this entire investigation and the allegations might actually have on the Labor Party more broadly. Prime Minister Anthony Albanese has said that this is an indictment of the labor movement. So has this actually done damage to the Labour Party as a whole, do you think?
I think it's doing damage every day, but I think there is also opportunity that Labour can act. They can look to Bob Hawke and the de-registration of the BLF back in the day, the Builders Labourers Federation. It should be Labour and the trade union movement leading the clean up here from within. This is their opportunity. Don't squib it.
So, Nick, what's next then for the union? Obviously John Setka has stepped down. So who do you think might lead it now?
The issue here is will the old cronies of the bad old days simply just fill Secker's boots? And if Greenfields forced out, fill his shoes and its nothing changes? Or will the honest elements rise up and fill the void? At the moment your money would be on the old cronies because of the way that people like Setka has made sure the infrastructure of the union is according to his structure, his image. It's his people, it's his mates. So while that's the case, it will be difficult for there to be a genuine internal reform process.
Well, it's such an important investigation. So thank you so much for your time. Thank you. Today's episode of The Morning Edition was produced by Julia Katzel with technical assistance by Cormac Lally. Our head of audio is Tom McKendrick. The Morning Edition is a production of The Age and The Sydney Morning Herald. If you enjoy the show and want more of our journalism, subscribe to our newspapers today. It's the best way to support what we do. Search the age or Smh.com.au forward slash. Subscribe and sign up for our Morning Edition newsletter to receive a comprehensive summary of the day's most important news, analysis and insights in your inbox every day. Links are in the show. Notes. I'm Samantha Salinger Morris. This is the morning edition. Thanks for listening.