Allan releases CFMEU letter as opposition says its royal commission would include government culpability

A referral letter sent from Premier Jacinta Allan to the state’s corruption watchdog has been released publicly for the first time, as the government seeks to cast claims of a $15 billion corruption blowout on the Big Build as an attack on workers.

At the same time, the opposition released the terms of reference for a royal commission it plans to call into misconduct within the CFMEU, which includes delving into the flow of taxpayer funds to organised criminals and the government’s culpability. A new construction sector watchdog, Construction Enforcement Victoria, would also be set up under Liberal leader Jess Wilson’s plan.

A report last week into the CFMEU, by integrity expert Geoffrey Watson, SC, alleged serious criminal behaviour, including drug distribution and sexual exploitation, on the state’s Big Build program, while a redacted section criticised the government and authorities for failing to address the problem.

Allan responded to the report and these criticisms by repeatedly stating that she has referred all allegations of misconduct that came her way to relevant authorities.

She also has said she only became aware the behaviour was systemic following this masthead’s Building Bad investigation in July 2024, when she referred matters to the Independent Broad-based Anti-corruption Commission.

The government provided a letter to the media on Sunday after requests for it to be released amid criticisms that the government failed to act on graft on taxpayer-funded projects.

“I am concerned to ensure that any allegations of serious corruption that are within the remit of IBAC, are identified, investigated and appropriate action taken by IBAC,” says the letter dated July 14, 2024 – a day after the Building Bad media investigation was published.

“Given these serious allegations relate to major projects commissioned by the Victorian government, I request that IBAC use its investigatory powers to assess, investigate and take action where there is any serious corrupt conduct within IBAC’s jurisdiction.”

Allan said in the letter the allegations included that a CFMEU health and safety official was using a car assigned for their job for “bikie gang activities” and that a person used a car from a state government project to drive to Footscray Hospital while bleeding from a gunshot wound.

Other allegations she outlined were that bikie gang members and associates were employed in union delegate roles and influencing the operations of contractors on major projects, and that CFMEU officials were advising companies to hire bikie-controlled subcontractors or retain standover men.

Finally, the premier raised the allegation that the CFMEU was using its influence to ensure work was awarded to companies that had enterprise or labour-hire agreements backed by the union.

“Accordingly, I am referring these matters to IBAC for investigation,” the letter says.

IBAC does not comment on investigations under way and told a parliamentary inquiry last year that under its rules it could not confirm whether a probe was under way as a result of this letter.

Allan’s government has been under increasing pressure to tackle ongoing issues within the CFMEU, particularly from the opposition, which has promised to crack down on the militant union and curb its influence.

On Sunday, Opposition Leader Jess Wilson unveiled her terms of reference for a royal commission into CFMEU misconduct that a Coalition government would hold if elected.

These include an investigation into the “nature, extent, and impact of misconduct involving the CFMEU on Victorian Government projects, particularly the quantum of the cost to taxpayers”.

Other terms include the flow of funds from these projects, particularly towards organised crime, and investigating connections between CFMEU misconduct and departmental management practices.

“We are announcing a royal commission to get to the bottom of this $15 billion dirty deal activity that’s been occurring on Victorian government work sites,” Wilson said.

“And we have a commitment to Victorian taxpayers: to every criminal out there that has made money off Victorian taxpayers, to every bikie that’s made money off Victorian taxpayers, to any associated organisation that has made money off Victorian taxpayers, we are going to get you.

Wilson decried how long it had taken the Allan government to properly respond to the allegations aired by this masthead 20 months ago.

“After days of deflection and denial by Premier Allan, Victorians still don’t have the straight answers they deserve,” Wilson said.

“Only a royal commission will get to the bottom of this shameful saga, identify how much taxpayer money has been rorted and ensure corruption on this scale is never allowed to occur again.”

IBAC chief Victoria Elliott has already asked Allan for powers to follow taxpayer dollars to subcontractors not directly employed by the government, an area where much of the alleged misbehaviour has taken place.

Since 2022, IBAC has also asked the government to lower the threshold needed to launch investigations.

Last week, Watson provided a rough estimate that the cost of corruption on Big Build worksites had added $15 billion to the total cost of the state’s infrastructure program, a figure Fair Work Commission chief Murray Furlong said was in line with what he had been told by government officials.

CFMEU administrator Mark Irving excluded this claim from the final version of Watson’s report, arguing it was untested, but released the redacted comments to a Queensland inquiry following questions from this masthead about their removal.

Allan has dismissed the figure as unsubstantiated, a sentiment echoed by a government spokesperson on Sunday.

“These claims don’t stack up. That’s why the independent administrator dismissed them,” the spokesperson said.

“Here’s what this is really about: in Victoria, we pay workers properly and some people don’t like that.

“Tens of thousands of workers doing dangerous, highly skilled jobs received a pay rise through lawful enterprise agreements negotiated by their union.

“We’re cracking down on dodgy labour hire businesses that underpay or exploit workers, and bosses who expose their workforce to serious injury or worse.”

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