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'Only a rort if you're not in on it': Inside the Big Build scandal · The Morning Edition

0:07
S1: The Victorian government has staked its reputation to a large
0:10
S1: extent on an ambitious infrastructure programme termed the big build
0:14
S1: by state labour. The programme includes major road and rail
0:18
S1: projects totalling billions of dollars. The series of projects stretches
0:23
S1: across the state from the controversial suburban rail loop to
0:27
S1: the regional rail revival. Victoria Police, however, say there is
0:31
S1: no doubt gangland linked corruption has infiltrated the big build.
0:36
S1: I'm Benjamin Price filling in for Samantha Selinger Morris and
0:40
S1: you're listening to Morning Edition from The Age and Sydney
0:44
S1: Morning Herald. Today's guest is investigative reporter Nick McKenzie. It's Wednesday,
0:49
S1: July 1st. So the state labor government has sought to
0:57
S1: spruik its big build infrastructure program at every opportunity level
1:01
S1: crossing removals, new roads, the Melbourne Metro rail tunnel, they're
1:05
S1: all part of the big build. But your reporting has
1:08
S1: revealed that not all is what it seems here. So
1:11
S1: can you tell us how is corruption worked its way
1:13
S1: into these infrastructure projects? It's very.
1:17
S2: Simple. The labor government for many years gave the CFMEU
1:21
S2: carte blanche free rein over the big build. And when
1:26
S2: it did that, the CFMEU was in league or at
1:28
S2: least parts of it in league with serious organised crime,
1:31
S2: with gangland figures, with gangland figures like Mick Gatto.
1:35
S3: Union corruption on the Allen government's signature big build projects
1:39
S3: has cost Victorian.
1:40
S4: Industrial scale corruption on Melbourne's big build projects. The premier.
1:45
S5: Jacinta Allan, is coming under renewed pressure over big build
1:49
S5: corruption claims, with fresh, high level calls for a.
1:52
S2: So they use this unhealthy relationship to profit from these
1:56
S2: large infrastructure projects. The CFMEU could decide which companies. When
2:00
S2: on the big build which companies could not get on
2:03
S2: the big build. And that meant that Mick Gatto could
2:05
S2: decide which companies got on the big build and which
2:08
S2: didn't through that union relationship. And of course, being a
2:12
S2: very cunning, astute player in the gangland for many years,
2:16
S2: he monetised that relationship. He's not the only gangland fixer
2:20
S2: involved in these sorts of dealings. There are many. But
2:24
S2: the key point to make is this not this would
2:26
S2: never have happened if not for the Labour government giving
2:31
S2: the CFMEU free and lawless rein over its big build.
2:40
S1: So can you tell us a bit more about Mick
2:42
S1: Gatto's involvement here? What's he actually done? And what, if anything,
2:46
S1: have taxpayers got for the money that's been spent that's
2:49
S1: flowed to him?
2:51
S2: Well, they've got a more empowered gangland and a wealthier
2:54
S2: Mick Gatto and a wealthier set of bikie clubs. That's
2:57
S2: what the public's got. What has he actually done? The
3:00
S2: easiest way to explain it is in the labour hire
3:03
S2: area because it's the worst case study. It's the worst
3:05
S2: area of wrongdoing. I call them the Dirty Dozen. There's
3:09
S2: a 12 or so labour hire companies and only 12,
3:13
S2: despite there being over a hundred with a licence to
3:16
S2: operate on the big build, only 12 got the imprimatur,
3:20
S2: the stamp of approval from the CFMEU in the form
3:22
S2: of an A, B, A and Union backing to operate
3:25
S2: on that big build. Now, how did they get that?
3:27
S2: We know that of this dirty dozen, three Labour hire
3:32
S2: companies paid Mick Gatto around $2 million in a retainer.
3:39
S2: What was that for? It was for making sure the
3:41
S2: union supported these companies as they operated on the big bill.
3:45
S2: Without that support, without that union imprimatur, without that union
3:48
S2: stamp of approval. Care of Mick Gatto in the in
3:51
S2: the wings. These companies would never have been able to
3:55
S2: operate as they did on the big build. What does
3:58
S2: that mean for the public? Or two things. Obviously Gatto
4:01
S2: got his cut. Some of these companies would never have
4:05
S2: got on the big build if not for Gatto's involvement
4:08
S2: and the involvement of dodgy CFMEU people. It meant these
4:12
S2: companies are winning contracts with turnover of hundreds of millions
4:15
S2: of dollars taxpayer dollars. These companies, these dirty dozen companies
4:21
S2: charged more than their competitors. We know the government has
4:25
S2: paperwork showing that, for instance, one of the companies labour
4:29
S2: hire companies, women in construction that was paying Mick Gatto,
4:31
S2: was charging up to 25% more than its labor hire
4:36
S2: competitors of on the big build. What could it get
4:38
S2: away with this ramped up price? Well, it had Gatto
4:40
S2: and the CFMEU pushing the company onto the big build,
4:43
S2: and the government prepared to give the CFMEU the power
4:46
S2: to do just that.
4:47
S1: To what extent has the government acknowledged that these corruption
4:52
S1: instances that you've uncovered and described just now have inflated
4:57
S1: the price of the big build and the cost to taxpayers,
5:00
S1: the public?
5:02
S2: Well, the, the government hasn't acknowledged that, which is concerning
5:07
S2: because this lack of acknowledgement is happening in the face
5:09
S2: of overwhelming evidence. We have documents, we have government documents,
5:12
S2: correspondence which make it clear that this was going on
5:15
S2: utterly clear and the government won't acknowledge it. What does
5:18
S2: the government do? It says, oh, well, if there's allegations
5:20
S2: of criminality, it should go to the police force.
5:22
S6: I want to say this this morning really clearly. After
5:26
S6: all this time, if there is any evidence of any
5:30
S6: allegation of criminal behaviour that includes corruption and extortion. I
5:36
S6: don't understand why that wouldn't be immediately provided to Victoria Police,
5:41
S6: because as Victoria.
5:42
S2: That's at the heart of Premier Jacinta Allan's response to
5:45
S2: all this corruption scandal. But the problem now is the
5:49
S2: police force have come out publicly and said, hang on,
5:52
S2: this gray area, corruption, this wrongdoing, some of it's not
5:55
S2: even criminal. It's wrong. It's corrupt, but not criminal. The
5:58
S2: cops can't do anything. Despite our best efforts, the place
6:03
S2: are not the answer. Now, if you want the place
6:04
S2: to be the answer, they say, give us the power,
6:06
S2: give us the the laws to be able to to
6:09
S2: criminalize this stuff and therefore take out the bad actors involved.
6:13
S2: They don't have those powers at the moment. So the government,
6:16
S2: by not acknowledging it and by handballing it to a hospital,
6:19
S2: handpass to the police, what's the effect of that? The
6:22
S2: total effect is ultimately a cover up.
6:24
S1: Mhm. I wanted to get to the laws that police
6:26
S1: are calling for in a moment. But first, I just
6:29
S1: wanted to touch on Jacinta Allan's insistence that she's got
6:33
S1: zero tolerance for wrongdoing and corruption. You're essentially saying, by
6:37
S1: the sounds of things, that the result of this zero
6:39
S1: tolerance approach is nothing.
6:43
S2: Well, it cannot be zero tolerance. If her actions are
6:46
S2: allowing gangland figures to still profit from the big build.
6:49
S2: We have proof, and we publish proof a few days
6:52
S2: ago that Mick Gallo and other gangland figures are still
6:54
S2: making money from big build subcontractors today for two years.
6:59
S2: The Premier has said she has zero tolerance. Well, clearly
7:02
S2: she has some tolerance for people like me making money
7:04
S2: from big build subcontractors. It's still going on this zero
7:09
S2: tolerance phrase. It's a neat political phrase, but it's utterly
7:12
S2: meaningless in the face of verified evidence that the wrongdoing
7:16
S2: continues to this day.
7:18
S1: So Jacinta Allan can hardly claim sort of plausible deniability here,
7:23
S1: can she? I mean, she's been premier for almost three years,
7:26
S1: and before that she was transport infrastructure minister. So it
7:29
S1: was her job to be across all of these infrastructure projects.
7:34
S1: She can't throw her hands up and say I didn't
7:36
S1: know about it, can she?
7:38
S2: Jacinta Allan was the minister for the big build. Now
7:41
S2: she's the Premier as the minister for the big build
7:45
S2: and now as Premier, there's two options for her. Either
7:48
S2: she was doing her job as minister and she knew
7:49
S2: of the corruption, the widespread systemic corruption and lawlessness that
7:54
S2: was going on on the projects she was ministerially responsible
7:58
S2: for or she didn't know, but she should of. So
8:01
S2: there's been a lapse there. The other two options, you
8:05
S2: either knew and didn't act, or you weren't up to
8:08
S2: the job, and therefore you didn't know and should have known.
8:11
S2: And both of them are fairly disappointing outcomes.
8:16
S6: Well, I accept that there is there are allegations and
8:20
S6: evidence that some of it is true. I accept that
8:22
S6: there is there has been allegations made that there are
8:26
S6: allegations that claim to have evidence behind those allegations. And
8:31
S6: in order for there's a lot of a lot of
8:33
S6: evidence and in order. Well, Paul, in order for that
8:36
S6: evidence to be proven, that is the task of Victoria Police.
8:42
S6: It is not for me as a member of Parliament
8:45
S6: or perhaps you as a journalist, to step into the role.
8:49
S2: Into our Westminster system of accountability means the minister has
8:54
S2: responsible for wrongdoing that happens in her ministerial or ministerial patch. Now,
8:59
S2: we've seen none of that accountability. The Premier has said
9:03
S2: Alan has said, well, I am a cannibal. Well, how
9:06
S2: is the Premier been meaningfully accountable for her lapses or
9:10
S2: her support of wrongdoing as minister? One way we could
9:14
S2: have accountability is to institute a proper process to find
9:17
S2: out what precisely Allen did or did not do to
9:20
S2: stop this wrongdoing. Did she support it? Did her bureaucrats
9:23
S2: support it? Did they try to fight it and and
9:27
S2: was stopped? Did she know about it? All these questions abound.
9:30
S2: No answers because there's no system of proper accountability.
9:34
S1: There have been calls for a royal commission into corruption
9:36
S1: on the big build. What would a Royal commission achieve
9:40
S1: and who is calling for a royal commission?
9:44
S2: Well, we've had, one must say, predictable calls from the
9:48
S2: opposition for a royal commission. But what's really the game changer?
9:52
S2: The two former heads of the key integrity agencies in
9:55
S2: the state, former senior judge and the former head of
9:58
S2: the independent broad based Anti-Corruption Commission, Robert Redlich, a really
10:02
S2: highly esteemed judicial Anti-Corruption figure says a royal commission is
10:07
S2: needed now and the former state ombudsman, the Victorian Ombudsman,
10:11
S2: the former Victorian ombudsman, Deborah Glass, has said the same.
10:14
S2: They've joined forces to say that there are very credible people.
10:17
S2: I mean, they've devoted their lives to public service in
10:21
S2: the interest of bettering Victoria. Why are they saying a
10:24
S2: royal commission is needed? Well, two years into this massive
10:27
S2: scandal and the wrongdoing that has been clearly exposed has
10:32
S2: not been dealt with. And what's worse, it continues. A
10:36
S2: royal commission is a desperate measure, but it seems like
10:39
S2: it's the only way to ensure accountability. In Victoria two
10:42
S2: years ago, the Premier, Jacinta Allan, could have acted with
10:46
S2: some proper commission of inquiry, some sort of investigation with
10:50
S2: the right powers to get to the bottom of this
10:52
S2: two years ago and to stop it happening two years ago.
10:55
S2: That's not happened. So what are we left with at
10:58
S2: the moment? We're left with a situation where gangland figures
11:01
S2: continue to get rich from the big build, and taxpayers
11:03
S2: continue to line the pockets of bikie gangs and gangland
11:07
S2: figures in the state of Victoria.
11:10
S1: After the break.
11:12
S2: The most infamous case study we've exposed is a company
11:15
S2: called Women in Construction. Its motto was led by women
11:18
S2: for women. In fact, it was run by two men
11:19
S2: with criminal convictions.
11:30
S1: The timing for some kind of inquiry right now would
11:32
S1: also be particularly inconvenient for the government, wouldn't it, considering
11:36
S1: that there's an election coming around in November.
11:38
S2: Well, it also could be very beneficial. That's right. It's convenient.
11:41
S2: But we have seen royal commissions in the past. They're
11:44
S2: easy to bag at the moment. The Premier is saying
11:46
S2: it's a lawyers picnic. There's been some tremendous royal commissions
11:49
S2: in this country. The Costigan Royal Commission exposing serious organised crime,
11:53
S2: police corruption, royal commissions, especially in Queensland and New South Wales,
11:57
S2: one that brought down a Queensland Premier. We've seen the
12:00
S2: Royal Commission into child institutional abuse, tremendous Royal commissions, game changes.
12:05
S2: They can work. They need to have the right terms
12:08
S2: of reference, the right people running them, and the right powers.
12:11
S2: Labour could turn this into a significant win by saying,
12:14
S2: let's have a Royal commission into organised crime in the
12:16
S2: construction sector in the state of Victoria. Get rid of
12:19
S2: the politics. Let's not make it a union busting exercise which,
12:22
S2: quite frankly, a coalition royal commission. We've seen union busting
12:26
S2: exercises under Howard and Abbott in the past. Let's make
12:29
S2: this a royal commission into organised crime in the construction sector,
12:33
S2: and let's expose those corrupt wrongdoing actors and what they're
12:38
S2: up to even today. That could be a real positive
12:42
S2: win for this state labor government. Call it get rid
12:45
S2: of organised crime figures out of the construction sector. Give
12:49
S2: the police the laws they need. The danger is by
12:52
S2: not doing that. If the coalition assumes power or wins
12:56
S2: power at the November election, the royal commission it calls,
13:00
S2: won't look anything like the royal commission. A labor government
13:02
S2: would call, uh and it will be far worse politically
13:08
S2: for Labour in the long run. If it's the other
13:11
S2: side of politics dictating the terms of this judicial commission
13:16
S2: of inquiry. That is very likely to happen at some
13:18
S2: time or another in Victoria.
13:20
S1: So the police tasked with tackling corruption on the big
13:23
S1: build have told you there's no doubt that corruption has
13:26
S1: infiltrated the program. Can you talk a little bit more
13:29
S1: about the laws they say are needed so that they
13:32
S1: can actually do something about this?
13:35
S2: Well, one thing they say is industrial relations fixers who
13:39
S2: operate in the construction sector, especially on government projects, should
13:42
S2: be licensed. They should have a fit and proper person test.
13:45
S2: So Mick Gatto, his company is called Arbitrations and Mediations proprietary, limited.
13:51
S2: He says, I'm the IR guy. I'm the industrial relations guy.
13:54
S2: I'll sort out your problem with the union. The police
13:58
S2: say we should not have a notorious veteran gangland figure,
14:02
S2: the former head of the Carlton crew, a man whose
14:05
S2: name evokes fear in most legitimate parts of society, dictating
14:10
S2: an IR outcome on a government project. Yet it's lawful
14:13
S2: for him to do that in Victoria right now. That's
14:17
S2: one just one change the police say is needed for
14:19
S2: them to get rid of the gallows, who are populating
14:22
S2: the construction sector in this state, and have done so
14:24
S2: for many years. The police are also saying we need
14:27
S2: government contracting partners, the big tier one companies working with
14:31
S2: the government to build the big build. We need them
14:34
S2: to actually make their procurement supply chains resistant to organised crime.
14:38
S2: At the moment, they're hiring companies run by bikie gangs,
14:42
S2: run by known gangland figures. Why are they doing this?
14:45
S2: Because they're getting pressure to do it, sure, but they're
14:47
S2: doing it. And the police are saying there's got to
14:50
S2: be a huge change there in the way that these
14:54
S2: big build mega labor, government contractors are also acting. That
14:58
S2: could be through legislation, it could be through contracting changes,
15:02
S2: and ultimately it is through a cultural change. And that's
15:05
S2: not the business of police. That's the business of government
15:07
S2: to make sure that happens.
15:09
S1: What do people in the construction industry mean when they
15:12
S1: say everybody eats?
15:15
S2: Well, everybody eats. You know, a very senior union figure
15:20
S2: put it like this it's only a rort if you're
15:24
S2: not in on it. So if your snouts in the trough,
15:27
S2: if you're getting your extra 10%, 20%, that's added to
15:30
S2: a government funded contract. Happy days. You're making a fortune.
15:35
S2: Mick Gatto was paid by one labour hire company alone
15:40
S2: on the big build over $1 million, and he's working
15:44
S2: for over, or has worked for over a dozen big
15:48
S2: build subcontractors. I'm sure he doesn't think it's a rort.
15:51
S2: He thinks it's a great pay day. There are companies
15:54
S2: run by serious organised crime figures that have made or
15:59
S2: turned over tens of millions, if not hundreds of millions
16:02
S2: of dollars on the big build. They don't think it's
16:05
S2: a rule. It's the best payday of their lives. Detective
16:09
S2: Superintendent Dave Cowan, who runs the Hawk Police Task Force
16:12
S2: looking at this stuff, said there is no doubt select
16:15
S2: organized crime figures have created a business model to get
16:19
S2: as much money as they can from the big bill
16:21
S2: that's coming from the cops. That's what the police have found. Uh.
16:25
S2: Everybody eats. It means everybody's snout is in that trough.
16:30
S2: And you know what? That trough is full of our money.
16:31
S2: Taxpayer money that the government's been handing over without the
16:36
S2: proper checks and balances.
16:38
S1: And this is really the point at which the public
16:40
S1: loses out, isn't it?
16:42
S2: Well, the public's funding this the public is ultimately underwriting
16:46
S2: the movement of money from the state of Victoria to
16:50
S2: some of the worst bikie gangs in this state. That
16:52
S2: is a fact. But who else is losing out? I'll
16:55
S2: tell you who else is losing out. Honest companies can't
16:58
S2: get a foot in the big build door because dishonest
17:02
S2: companies make payments to dodgy middlemen to get through and
17:07
S2: that the honest players, honest mum and dad companies and
17:09
S2: bigger companies are missing out. The union workers union members
17:14
S2: are getting rorted here, because I'll tell you what, a
17:16
S2: company prepared to pay a gangland figure to get onto
17:19
S2: a project doesn't give two shits about looking after a
17:23
S2: union members pay and conditions. We know as a fact
17:26
S2: that Mick Gatto has represented many companies that exploit their workers.
17:31
S2: Why do they pay Gatto? Because he has a dodgy
17:34
S2: deal with the CFMEU to keep the CFMEU at bay,
17:36
S2: where it should be looking after these workers. So who
17:40
S2: pays workers pay? Who else pays? Women pay? The most
17:44
S2: infamous case study we've exposed is a company called Women
17:47
S2: in Construction. Its motto was led by women for women.
17:50
S2: In fact, it was run by two men with criminal convictions.
17:53
S2: Both were convictions for violence against women, one a notorious
17:57
S2: drug trafficker. Women in that company were exploited, mistreated and
18:05
S2: preyed upon. And that's according to Geoffrey Watson, the corruption investigator.
18:10
S2: But sources of mine have said the same thing. It's
18:13
S2: a fact the general manager of that company got out
18:16
S2: of jail, was appointed general manager of women in construction.
18:19
S2: Then he left. The company was charged again with the
18:21
S2: drug trafficking offences, which for which he was previously jailed
18:24
S2: and is now sitting in jail for violence against women.
18:26
S2: These are facts. So women on the big build female
18:30
S2: Victorians have also paid a price.
18:32
S1: So, Nick, where does the scandal go from here?
18:34
S2: Well, the Premier is now under immense pressure, I think,
18:37
S2: to change up her response to these ongoing revelations of
18:41
S2: serious wrongdoing. The police have come forward and said, we
18:43
S2: can't do it alone. We can't deal with this without
18:45
S2: new laws. And even if we have these new laws,
18:47
S2: there's a vast amount of this corruption on the big
18:49
S2: build that exists that is outside of the police remit.
18:52
S2: It's untenable now for the Victorian Premier to do nothing.
18:56
S2: In the face of those police comments. Her own colleagues
18:59
S2: are saying to her, you've got to change up. The
19:02
S2: Victorian public aren't seeing a labor government actually tackling this
19:07
S2: very serious problem that arose when you were the minister
19:10
S2: responsible for the big build. So the pressure's on, and
19:13
S2: I think there's also pressure that's building immense pressure about
19:18
S2: whether Jacinta Allan actually is the person to keep leading labor.
19:22
S2: As these questions continue to mount, so the next few days,
19:25
S2: weeks will be absolutely crucial in understanding what the Premier
19:29
S2: will do to respond to this latest round of fresh
19:32
S2: evidence and what her party will do in response to
19:36
S2: her response, and whether they will have her back in
19:39
S2: the coming days.
19:42
S1: Nick, thank you very much for joining us on The
19:45
S1: Morning Edition.
19:46
S2: Pleasure to be with you.
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