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.
The release of the referral letter aims to head off criticisms that the government failed to act on graft on taxpayer funded projects.
A report last week into the CFMEU, by integrity expert Geoffrey Watson, 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.
Following requests to see the referral, the premier’s office provided a copy of the letter to media on Sunday.
“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, 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 underway and told a parliamentary inquiry last year under its rules it could not confirm whether a probe was underway as a result of this letter.
But Commissioner Victoria Elliott has asked Allan for powers to follow taxpayer dollars to subcontractors not directly employed by government, an area where much of the alleged behaviour takes place.
Since 2022, IBAC has also asked the government to lower the threshold needed to launch investigations.
“We have a very high definition of corruption, the highest in the country,” Elliott told this masthead in November.
“The test is too high in the sense that it doesn’t allow us to look at the level of seriousness or systemic issues that I think the public would expect us to be looking at.”
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’d 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.”
Opposition Leader Jess Wilson on Sunday unveiled her terms of reference for a Royal Commission into CFMEU misconduct 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.
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