When Prime Minister Tony Abbott announced a royal commission into union corruption back in February, he claimed it would shine a spotlight onto the dark corners of the labour movement. It was all about honest workers and honest companies getting a fair go, Abbott assured us, and ensuring everyone could go about their business without worrying about being stood over by a burly union official or having their hard-earned spent on blue movies and prostitutes. The Labor Party, still reeling from an electoral defeat, would be further humiliated by having its former leader plonked in the royal commission’s hot seat.
The unions claimed the exercise was a political witch-hunt and a chance to lay the foundations for industrial relations reform. “This government is not genuinely interested in dealing with corruption. It is only interested in weakening unions,” said Australian Council of Trade Unions (ACTU) president Dave Oliver. Abbott had already flagged the need for a return of the Australian Building and Construction Commission (ABCC), the regulatory body instituted following the 2003 Cole royal commission into the building and construction industry. The Cole commission’s findings included a four-page shopping list of “inappropriate” behaviour by the Construction Forestry Mining and Energy Union (CFMEU) but ultimately did not lead to a single prosecution of a union official or delegate. Abbott’s commission was given a broader scope, covering several ACTU-affiliated unions such as the Health Services Union (HSU) and the Australian Workers’ Union (AWU), as well as the headline-catching CFMEU.
As the public hearings come to a close, it’s worth reflecting on the current commission’s progress. The terms of reference directed the commission to investigate the governance and financial management of five Australian unions. They include those mentioned, plus the Transport Workers’ Union of Australia (TWU) and the Communications, Electrical and Plumbing Union of Australia (CEPU). It was HSU president Kathy Jackson who initially brought attention to union corruption in 2008 by organising investigations into the conduct of former HSU general secretary (and former Labor MP) Craig Thomson. Thomson was alleged to have misused nearly $30,000 of members’ money on travel, personal expenses (including in-house adult movies) and, most notably, escort services. In February this year, just after the unions royal commission was announced, he was convicted on 65 charges and jailed for 12 months with nine suspended, pending an appeal.
The Coalition seized the opportunity to try to tar then-prime minister Julia Gillard with the same brush by repeatedly bringing up allegations she helped set up, and then benefited from, an AWU slush fund controlled by ex-boyfriend Bruce Wilson in the early 1990s. If anyone was looking for a mea culpa from Gillard under oath, they didn’t get one. Gillard faced the commission and calmly denied any wrongdoing, as she had all along. In the end it was whistleblower Jackson who turned in the commission’s most compelling appearance. Expecting to get a cushy ride, Jackson was suddenly confronted by lawyers about a $50,000 payment to her former husband made from an HSU account. “I was given a completely contrary impression about what this matter was going to be about today, and I wish the opportunity now to seek legal representation to enable me to properly respond to these matters as I’ve been ambushed,” Jackson responded. In a later appearance, Jackson claimed she was uncomfortable because she had once slept with the barrister cross-examining her. But with new reports claiming Jackson allegedly misappropriated $1.4 million in HSU funds, the commission (and her “charity shag”) is probably the least of her worries.
“If they can be proven, the allegations against the CFMEU probably represent the best chance for criminal charges to come out of the commission’s hearings outside of the Bruce Wilson/AWU affair…”
While it remains to be seen whether criminal charges are likely to be laid as a result of the union royal commission’s findings, some serious allegations have been made. Wilson is currently under investigation by Victoria Police for charging payments relating to training services that were never delivered. It is also alleged Wilson set up a slush fund as a device to obtain those funds, some of which he used to build a home. Meanwhile, the CFMEU has come under scrutiny for its dealings with underworld figure George Alex, including allegations the union was receiving weekly kickbacks of $2500 from labour-hire and scaffolding companies linked to the businessman. However, none of the commission’s witnesses have been able to say with any certainty the payments ended up in the hands of the union. The CFMEU, for its part, flatly denies receiving payments from anybody. Douglas Westerway, former director of an Alex-owned scaffolding company, also testified that Alex had guests including known bikies and convicted terrorist Khaled Sharrouf in his home. Alex was called to appear before the commission to face questions about the payments to the CFMEU, but has been excused until late October for health reasons.
If they can be proven, the allegations against the CFMEU probably represent the best chance for criminal charges to come out of the commission’s hearings outside of the Bruce Wilson/AWU affair. But given that some witnesses have said they were too scared to testify, and emails were reportedly deleted, it may prove difficult. National secretary of the TWU Tony Sheldon might also be in trouble after allegedly using a union slush fund to bankroll election campaigns within other unions. Further, the TWU has been accused of using its own resources to fund a campaign within the union, a possible violation of the law. The Age had previously revealed the TWU’s Queensland division, controlled by Labor Left, was smashed in a takeover bid by a Labor Right hit squad funded in part by the TWU’s own funds. Most recently, the commission has heard testimony alleging the Maritime Union of Australia (MUA) was the recipient of large payments from companies involved in gas and oil projects in exchange for industrial peace. The MUA’s lawyer, Steve Crawshaw, denied the union takes bribes: “There’s not a skerrick in this evidence … and we’ve seen it all, to suggest that the MUA has been involved in anything illegal or unlawful,” he told the commission.
In 2003, the Cole royal commission’s final report contained more than 200 recommendations, the bulk of which related to amending legislation in the building and construction industries. Abbott was the workplace relations minister at the time, and in 2005 got his wish with the introduction of the ABCC. Along with WorkChoices, it formed the centrepiece of John Howard’s industrial relations reforms. The latter, of course, would cost Howard his prime ministership, largely due to the massive Your Rights At Work campaign organised by the ACTU. When the commission hands down its final report on December 31, Abbott’s first challenge will be to get reforms through a hostile and unpredictable Senate. His second challenge will be to keep the public on side once the sensational headlines have disappeared.