Royal commission in Australia to investigate violations in Victoria's construction industry
In the Australian state of Victoria, a forthcoming royal commission will investigate serious allegations of wrongdoing at major public construction sites. The issues include the alleged infiltration of members of biker gangs and representatives of organised crime into the CFMEU construction union and companies working on infrastructure projects under the government's Big Build programme.
As ABC News Australia reports, barrister Geoffrey Watson SC, who investigated the industry's situation for the CFMEU administrator, estimated potential taxpayer losses from alleged corruption at $15 billion. Former Victorian Premier Jacinta Allan disputed this estimate.
Claims concerning Mick Gatto
Watson's report mentions businessman Mick Gatto, who provides mediation services in the construction sector. Watson stated that Gatto had considerable influence over the Victorian branch of the CFMEU and could halt work at construction sites. The barrister also described the so-called “Gatto extortion model”: according to his version, contractors could have been asked for money under the threat that the CFMEU would initiate an industrial dispute and stop construction.
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Gatto rejects these claims. In a podcast with Karl Stefanovic, he said that, in his view, most of Watson's report was nonsense. Gatto also stated that he does nothing illegal and is accustomed to constant attention directed at him.
Search and forthcoming investigation
In June, police investigating the construction industry searched the home of Gatto and his wife in Mount Martha. Law enforcement officers seized computers and phones, detained the couple, and later released them without charges. Gatto described these actions as information gathering which, he said, produced no results.
In a conversation with radio station 3AW, Gatto explained that builders pay him to settle conflicts with the union in order to avoid lost productivity and work stoppages. One construction business owner who spoke anonymously to ABC described Gatto's work as professional. At the same time, Watson estimated Gatto's annual income from working with more than a dozen construction companies at no less than $5 million.
