Fraud and corruption: 56 active allegations on Big Build projects receiving federal funds

Eleven of the biggest infrastructure projects in Victoria – including the multibillion-dollar Suburban Rail Loop and North East Link – are now the subject of 56 separate allegations of fraud, corruption, theft and criminal behaviour after a rise in reports of suspect conduct.

Figures revealed at a Senate estimates hearing reveal the $26 billion North East Link is the project responsible for the most complaints, just 24 hours after Premier Jacinta Allan said was “no evidence” bikies had benefited from that project.

Department officials told the Senate committee on Monday that new guidelines required states to report serious allegations made to authorities and under investigation if they related to projects receiving federal cash. More than half of the 63 allegations reported nationally were received in the past fortnight.

The Commonwealth officials said they had been notified of 28 allegations related to the North East Link, relating to corruption, undisclosed conflicts of interest, fraud, breaches of workplace laws and criminal behaviour. The federal government has put $5 billion towards the project.

On Sunday, Allan told reporters there was no evidence of project funding ending up with bikies, when she was asked about this masthead’s reporting that a bikie-linked company secured contracts as the leading women-led supplier of female workers on Labor’s Big Build.

A landmark report into CFMEU corruption, released three months ago, found bribery and bikie gangs had infiltrated major government infrastructure projects.

The premier said she had given Victoria Police and the Labour Hire Authority the powers needed to investigate claims if they are made.

However, the figures released at Senate estimates show fraud, theft, corruption and criminal behaviour allegations continue to be a serious issue across the Big Build and are being investigated.

Allegations were also more prevalent in Victoria, which accounts for 56 out of the 63 allegations reported to the federal government from around the country under the new process.

The Suburban Rail Loop has 16 allegations which related to fraud, bullying, corruption, breaches of workplace laws and criminal behaviour.

Officials also revealed that just four of these allegations about the rail loop were reported before it was announced the Albanese government would tip $3.8 billion into the project in its most recent budget.

Then, last week, Victoria notified the federal government of another 12 allegations. These statistics are reported monthly and were made on time, the officials said.

Federal infrastructure secretary Jim Betts wrote to the Victorian government asking about this high number of reports in the state. The Allan government responded in writing on May 15.

When asked about Victoria’s over-representation, Betts said the issues reflected in the data were being investigated by the appropriate authorities, but data was now being shared with the Commonwealth through the new guidelines.

“We are not the police, and we are not the Fair Work Ombudsman, but we can make sure through the leverage that we have through our funding contributions, that those jurisdictions comply with the rules that the current government has put in,” he said.

Betts said federal officials would use this leverage by “working with our Victorian government colleagues to ensure that things are reported to the appropriate regulatory and … investigatory authorities in a timely fashion”.

Deputy secretary Jessica Hall said the information would be considered and inform a decision on any further steps, which could include looking for evidence any Commonwealth money was caught up in corruption or fraud.

“We have done that previously to get assurance in projects of that sort before … We have withheld funding previously before we have received assurances,” she said. “We will have a look, and we will see if any conditions need to be placed on the funding.”

She said it was encouraging that there were more reports of problems on projects as it meant people felt comfortable reporting problematic behaviour.

“We’re actually getting information provided to us that allows us to understand what’s actually happening in the system and get the system itself to target the actions.”

She also pointed out that the allegations related to 18 projects out of 600 major projects in the federal government’s infrastructure program.

Nationals senator Bridget McKenzie said the level of systemic corruption and harassment on these projects had never been seen before and the $3.8 billion in extra funding for the Suburban Rail Loop should be halted.

“Not a dollar should leave the Commonwealth Treasury to this project until you can be assured that it’s in line with other states,” she said.

“This is unprecedented. Victoria has nearly 89 per cent of the problem behaviour. Now, in any other matrix of assessment of risk that screams systemic.”

Department officials did not detail the specifics of each allegation, because the claims are still being dealt with by authorities and the officials did not want to prejudice those investigations.

Outside Victoria, the Federal Department of Infrastructure and Transport was notified of four allegations related to four projects in NSW, and three allegations linked to three projects in Queensland.

Labor senator Malarndirri McCarthy told the committee that the government had “moved swiftly in terms of any behaviour, illegal or otherwise, in terms of infrastructure and construction right across the country”.

A Victorian government spokesperson issued a statement that did not respond directly to the evidence at the Senate but pointed to its actions to strengthen the police and Labour Hire Authority powers in dealing with the construction sector.

“Criminal activity on worksites undermines every worker and offends every Victorian, and anyone engaged in it must face the full force of the law,” the statement said.

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