Corruption and Fear Stalked Setka-Era CFMEU: Report

A scathing report submitted to the Commission of Inquiry into the CFMEU and Misconduct in the Construction Industry in Queensland alleges the Victorian branch under John Setka as an organisation that devolved from militant unionism into a “crime syndicate”.

The report, authored by Geoffrey Watson, argued the branch’s collapse was leadership-driven, fuelled by a concentration of power among a small group of officials and amplified by the financial tidal wave of Victoria’s $100-billion Big Build.

“The cause of the collapse … was not from within, it came from the top,” the report said, squarely attributing responsibility to the Setka-era executive.

The report documents more than 2600 industrial law breaches and more than $28 million in fines since 2003, alleging that penalties had little deterrent effect. 

Instead, the report says, fines became “part of the business model”.

At the centre of the deterioration was a “perfect storm” created by unprecedented government infrastructure spending, labour shortages and increased bargaining power, according to the report.

“All of a sudden there was too much government money … and, from that, too much power generally,” one industry figure is quoted as saying.

Victoria’s anti-corruption watchdog has now confirmed it will assess the claims of widespread corruption across the Allan Government’s Big Build sites. 

Victorian Premier Jacinta Allan has drawn fire for refusing to apologise to Victorian taxpayers for the alleged $15 billion cost blowout on the Big Build.

Allan rejected claims that $15 billion has been lost in Big Build rorts and rejected calls for a Royal Commission into the matter.

The report alleges that power was concentrated among about 20 “powerbrokers” within a 30,000-member branch.

It also claims that enterprise bargaining agreements were manipulated, labour hire arrangements were corrupted, and civil works sites—traditionally covered by the AWU—were aggressively taken over.

The report details alleged infiltration by outlaw motorcycle gangs, the use of threats and blockades to pressure contractors, and the use of industrial disruption for extortion.

“The CFMEU succeeded in casting a shadow of fear over the whole building sector,” the report concludes.

It also references the alleged influence of underworld figure Mick Gatto, claiming his association with union leadership became entrenched over decades and intertwined with industrial outcomes.

The administration imposed in August 2024 is described as a necessary “regime change”, with more than half of the Victorian branch’s employees departing or being removed since.

While the report is unambiguously critical of former leadership, it distinguishes the conduct of officials from the broader membership.

“There are over 30,000 members … 99 per cent of them are honest men and women,” it states. “This report is about the officials who abused the trust.”

The findings now form part of ongoing reform efforts aimed at restoring governance, compliance and credibility to Victoria’s most powerful construction union.

While facing the inquiry this week, Watson called for an audit of all delegates and a more democratic leadership election process within the union. 

Public hearings for the Commission of Inquiry into the CFMEU and Misconduct in the Construction Industry will return to the Brisbane Magistrates Court March 10-19.