COVER STORY: by Peter WestmoreNews Weekly
Union-related corruption: the issue that won't go away
, March 1, 2014
The announcement of a royal commission into union-related corruption, particularly in the building industry, marks the fourth such inquiry into this industry.
Earlier inquiries in New South Wales and federally had unearthed much illegality, but led to few prosecutions, and their recommendations were reversed when Labor governments later came to power.
The response by union leaders and federal Labor leader Bill Shorten to the announced royal commission indicates that they will take a similar view to this inquiry.
Shorten argued that allegations of impropriety were a police matter, and should be pursued by a police taskforce, ignoring the fact that both state and Commonwealth police have been incapable of responding to recent well-publicised reports of illegality and misconduct by union officials.
Shorten dismissed the Royal Commission into Trade Union Governance and Corruption as a “political stunt”.
The establishment of the royal commission followed sensational allegations by a former building union official that he had received death threats after expressing concern at the involvement of organised crime figures with unions, and the use of outlaw motorcycle gang members as enforcers in the building industry.
These followed the long-standing allegations by officials of the Health Services Union (HSU) that its former presidents, Michael Williamson and Craig Thomson, had used hundreds of thousands of dollars of union funds for personal purposes.
There were also persistent rumours that Julia Gillard, when she was a partner at a Melbourne law firm, established a “slush fund” for her then boyfriend, Australian Workers Union (AWU) secretary Bruce Wilson, who had allegedly used the fund for personal purposes.
Julia Gillard denied any wrongdoing, and said that she had severed her connection with Wilson after the allegations came to light.
Despite these allegations, no disciplinary proceedings have been commenced by the Fair Work Commission, nor has anyone yet been successfully prosecuted.
Independently of the royal commission, the Abbott government has announced that it will seek to re-establish the Australian Building and Construction Commission.
The first judicial inquiry into the building industry was conducted over 30 years ago, when a royal commission was established into the Builders Labourers Federation (BLF), then led by Norm Gallagher.
The second was conducted by Roger Gyles QC in NSW over 20 years ago.
He listed the variety of illegal and improper activities found to exist in that state. It included physical violence and intimidation; corrupt, improper and irregular payments; fraudulent conduct; theft; extortion; tax evasion; stoppages, bans, boycotts and secondary boycotts; sabotage and bomb hoaxes; restrictive trade practices; unfair practices; engagement of reputed professional criminals; and breach of safety and award provisions by employers.
In 2001, the Howard government appointed a former NSW Supreme Court judge, Terry Cole QC, to conduct a national inquiry into illegality in the building industry.
His 23-chapter report was a scathing indictment of criminal behaviour, and led to the establishment of the Australian Building and Construction Commission by the Howard Government, to rein in such conduct.
Despite its effectiveness, the building unions hated it; so the commission was abolished by the Rudd Government after Labor’s election win in 2007.
Since then, criminality has flourished in the industry.
In announcing the Royal Commission into Trade Union Governance and Corruption, Prime Minister Abbott has made clear that it will have a wide brief.
He said, “This will not be an inquiry into trade unionism or the day-to-day activities of honest trade union officials.
“Instead, it will address increasing concern arising from a wide range of revelations and allegations involving officials of unions establishing and benefiting from funds which have been set up for purposes which are often unknown and frequently unrelated to the needs of their members.
“We don’t want honest workers to be ripped off by dishonest union bosses.”
The Prime Minister said that, before the election, the Coalition had promised to establish a judicial inquiry into the AWU slush-fund scandal. This announcement honours that promise.
Mr Abbott continued: “A number of similar allegations have also been raised in relation to many other funds established by officials of other unions. These strongly indicate there are systemic issues involving secret funds, commissions and kickbacks that need to be considered.
“In addition, recent allegations of corrupt behaviour, unlawful kickbacks and standover tactics in the construction industry have made it clear that there is a need for serious scrutiny of allegedly corrupt conduct, wherever it may occur.
“As a result, the terms of reference are not limited to any particular organisations, particular allegations or particular industries. The inquiry will be able to go wherever the evidence leads it. This means that union officials, employers and any other persons who are involved in such conduct will be subject to equal scrutiny.”
The problem with royal commissions such as that being established by the Abbott government is that they are perceived as simply a vehicle for political advantage by the Coalition government.
This would be a tragedy, and will ensure that the recommendations of the Royal Commission into Trade Union Governance and Corruption are reversed by the next Labor government.