Previous month:
October 2014
Next month:
December 2014

November 2014

Our local under 14s cricket team, their coach Dave and the spirit of Baggie Green 408

Dave is a bit of an EveryMan.   He's a paramedic and he arranges his shifts so that every Tuesday he's at cricket training and every Saturday morning he's at the game with the boys.

Saturday nights he updates the scores on the internet.   And all day, every day, he inspires a team of young fellows to grow into good men.

I know one of his young charges, Tom.   Tom was first drop in the batting order today and he batted out the whole innings after the opener went early.   Tom told me he watched the Phil Hughes instructional video on YouTube this week and that's why his footwork was better and his attitude to the ball so much more positive.  And he's got the runs on the board to prove it.   Thanks Phil.

At 8AM Dave the paramedic lined up two local teams of assorted roughnuts, bookworms, athletes and one future jockey.   24 young boys who'd never lined up together until today.   And in very simple words, the sorts of words that a paramedic might say to a grieving mum while he's still on scene, Dave told those young blokes why they were about to share a minute's silence.   Each of those boys checked his black tape armband, then together they stared at the grass and grappled with the enormity of possibilities around them.

It only took a minute, but Dave led those blokes in a few great leaps forward to adulthood today.   Then they played cricket like men possessed.   I was privileged to have a quick chat with Dave just after his team, "The Butchers" brung home the bacon.






Very serious error in Senior Counsel Assisting's Submission in Reply

On 14 November 2014 I responded to Counsel Assisting's final submission about the relevant entity the AWU WRA Inc. 

Counsel Assisting submitted that Thiess's WA Government contract for the Dawesville Channel was awarded after a public tender process.  

My submission to the Royal Commission said Counsel Assisting was wrong.  I say that after lobbying, Carmen Lawrence's Labor Government cancelled any tender process and gave the $60M contract directly to Thiess.

The AWU WRA was set up to receive money from the Dawesville contract.   Its income flowed from the WA Government, through the Dawesville contract with Thiess and into bank accounts that Wilson controlled.  Complete inquiries into the AWU WRA Inc should include commentary on whether or not that contract was awarded after tender.   Counsel Assisting saw fit to raise the matter of the tender in his submissions, it's just that his submission is wrong.

On 21 November 2014 the Commission published(page 17) Counsel Assisting's response to my 14 November submission.    CA said (my bold emphasis):

(Michael Smith) has overlooked that these paragraphs of Counsel Assisting’s Submissions in Chief were based on the unchallenged evidence of Mr Blewitt, which was to the effect that there was a tender,  that the AWU played a role in that tender process and that Thiess was the successful tenderer.

Mr Blewitt was examined by his legal advisor on 13 May 2014 and this evidence was
not sought to be corrected. Nor was there any cross examination of Mr Blewitt on this
issue.  Nor did any other witness put on evidence contesting Mr Blewitt’s evidence on this point.  Mr Blewitt was a senior official in the WA Branch at the time and would
have had personal knowledge of its affairs.  His evidence was that the AWU was
involved in the tender process.  On the face of it this evidence was given on the basis of
his personal knowledge.  There was nothing to suggest that this evidence was erroneous, or even controversial. The upshot of this was that the evidence in respect to this point of detail was not challenged.

Given the material contained or referred to in the submissions now received it appears
that Mr Blewitt’s evidence on this point is open to doubt (although none of the
documentation referred to in the submissions is in evidence and no concluded view can
be expressed at this stage). However since this issue was not debated in evidence in the Commission for the reasons set out above, it is not taken further here.


I'll try to answer Mr Stoljar's points in order.  


What did Blewitt actually say?

Here is Blewitt's evidence, Page 10 of the transcript 12 May, 2014

Q. Was there a tender for the work?
 4 A. I believe so, yes.

 6 Q. Who won the tender, to your knowledge?
 7 A. Thiess Contractors ended up with the contract.

Blewitt says "I believe so" about the tender.   The basis of his belief is not explored, but it connotes an absence of certainty. 

Mr Stoljar's submission then misquotes Mr Blewitt a little, submitting that Blewitt "gave unchallenged evidence" "that Thiess was the successful tenderer".   Blewitt actually said, "Thiess Contractors ended up with the contract". 

On the final point Mr Stoljar made about Blewitt's evidence, Ralph agreed with Mr Stoljar that the AWU played a role in what Stoljar referred to as "the tender process".   Blewitt went on to describe Wilson's lobbying efforts on behalf of Thiess with members of the Cabinet.

Mr Blewitt's standing on this issue

Blewitt had no role in the contract negotiations between the WA Government and Thiess.  He wasn't in the Cabinet that made the decision.   The AWU was not a party to the contract.

Anything Ralph "believes" about the tender must be hearsay.

Mr Stoljar puts much faith in the recollected "belief" of a man who in this matter was a bystander - which might be fair enough if there was no other evidence.


Was there other evidence available to the Commission? Was Blewitt unchallenged?

Stoljar says Blewitt's evidence was

  • "unchallenged"
  • "Nor did any other witness put on evidence contesting Mr Blewitt’s evidence on this point"
  • "There was nothing to suggest that this evidence was erroneous, or even controversial. The upshot of this was that the evidence in respect to this point of detail was not challenged".

That's just wrong, evidence from two central players was available but somehow Mr Stoljar missed it.  The two most senior Thiess executives responsible for securing and delivering the Dawesville Channel contracts have given sworn evidence (in Affidavit form) that Thiess was directly awarded the contract and there was no tender.

On 28 June 2013 the former Thiess General Manager for WA Nicholas Neil JUKES made a statement to Victoria Police about the AWU WRA.  The statement was available to the Royal Commission and is located in Jukes's sworn evidence here.

At Page 57, paragraph 7 Jukes states:

Par 7 jukes statement to victoria police

He confirms the fact the Dawesville Channel project was directly awarded to Thiess without tender in paragraph 13 on the same page:

Par 12 jukes statement to police tender

Jukes confirms that Thiess's contract negotiations for the Channel and Bridge were directly with the WA government.

Para 6 jukes

Nick Jukes was the GM for Thiess, and he admits his company got the contract without tender.   It beggars belief that Counsel Assisting the Commission might prefer the line or two of hearsay from Blewitt over the direct evidence of Jukes.

But it's not just Nick Jukes.

Bruce Wilson's brother in law Joe Trio says the same thing, there was no tender, Thiess was directly awarded the contract.

On 11 April 2013 Joe Trio made a statement (with the penalties of perjury if untrue) to Victoria Police - he's adopted and sworn that evidence with further affidavit material filed here.

This paragraph follows a lengthy description of the process leading to the contract:

Para 22


It's chilling that Senior Counsel Assisting could submit that:

since this issue was not debated in evidence in the Commission for the reasons set out above, it is not taken further here.

"This issue" is central to the genesis of the AWU WRA Inc.    Why did Carmen Lawrence's Cabinet intervene to overturn a tender process and directly award a $60M contract to Wilson's mates in Thiess?   Why did Thiess pay Wilson precisely $300,000 in monthly payments, spread over the anticipated 36 months duration of the contract, even when the work was finished 8 months early? Thiess's profits must have been considerable, they were paid a fixed price for a fixed term of 36 months of work.   Without a competitive process, who knows how much time or money other like companies would have tendered?   Thiess was laughing, it was overpaid for 8 extra months of work it didn't have to do.

The centrality of the Dawesville contract in inquiries about the AWU WRA Inc becomes crystal clear when you turn to Bruce Wilson's evidence about why he was so keen to set the association up:

I did some research to inform myself about how to go about setting up a legal entity to
receive the monies from the DCP (the Dawesville Channel Project). I may have asked
someone like my accountants, or Stephen BOOTH or Julia GILLARD. I got as much
information as I could about how to go about it from various sources. After informing myself
I believed that the entity should be an incorporated association.

The AWU WRA Inc and the Dawesville Channel project are inextricably bound.  The slush fund money came from the Dawesville project.   Wilson says the slush fund was set up to receive that money.   Carmen Lawrence's cabinet made the decision to give that contract to Thiess, in secret and without competitive process.

The career path of ambitious union leaders is often crowned by a seat in a parliament.   Because of the dependencies and links between unions and the Labor Party when in government, inquiries into union corruption must traverse "political" and uncomfortable ground.   I sense in the Submissions from Counsel Assisting an aversion to pursuing relevant matters if to do so might generate political or media controversy.   This is one instance where the Commission's terms of reference properly direct it to make those inquiries.   If the evidence of Jukes, Trio and the potential evidence in my submission is ignored in favour of Blewitt's belief, the Commission will be a laughing stock.

The AWU WRA Inc is the first and most notorious "relevant entity" the Commission is directed to inquire into.   That job should be done properly.  Counsel Assisting's submission that the Commission "not take the issue (of the $60M earthwork and bridgebuilding for mates without tender contract) any further" should be revisited or the Commission should ignore it.

Vale the late Phillip Hughes - he was everything I'd hope my own boys might become

Death is hard for people to deal with at the best of times.   University types say most people react with denial, then progress through 5 stages of a grief process that leads to acceptance.

In the death of the late Phillip Hughes, I'll be stuck on denial and disbelief for a very, very long time.

Every death of a young person is a tragedy.   But in Phillip's case that tragedy is compounded by the random and unforseeable way his life was accidentally ended playing our national sport.

Like most blokes of my vintage born in Australia, I love cricket.  I played cricket as a kid and now Hughie my 8 year old plays every weekend.   Cricket is central to our national character and in my mind it's always been a wholly good thing.

We all have a stake in the game of cricket and its tremendous influence in shaping our shared values and national character.   Phillip's death reminds us it takes courage and skill to play the game at the highest levels.   Cricket's not easy, it can be dangerous but that's part of its intrigue.  While nothing can bring Phillip back, we should all take some comfort from the fact that he lost his life doing something worthwhile - playing cricket.

Cricket is more than a game, it's a repository of customs, etiquette, standards of behaviour, teamwork, competitiveness and a striving for excellence that's shaped our men for generations.   When boys grow into men playing the great game they are inculcated in the ways of cricketers, it's part of being in the team.   Cricket has been a driving force in maintaining so many of the positive character traits Australians treasure, handed down from coach, captain and elder players to the next generation of youngsters.

Phillip died playing a game we all own, a game we value as a national asset. I think that's why the public outpouring of grief has been so prominent.  Perhaps as we reflect on the life and character of a great young man, we might pause to think as well about the great game itself and the way it helps make us who we are.

Every parent will be feeling apprehensive about tomorrow's Saturday-morning-taxi-shuttle to the sports grounds.   I'll be telling my son that it takes courage and character to walk out and face a fast bowler on a quick wicket.    That's part of cricket.  It's also why young boys get the message about safety gear drummed into them - pads, gloves, box, helmet for the older players and protection from the sun too.

Phillip Hughes's death is a reminder about that serious side of sport.   Next time you feel the need to yell at the TV you might remember it's hard and often dangerous work for the blokes on the field.  We get so much from sport, cricket in particular, and (beyond their pay) those who actually play it at the highest standards are often a bit taken for granted.

Cricket Australia has a marvellous webpage where you can leave your reminiscences about Phillip - it's here.   They've put together some video and other snippets from the short life of a great bloke and it's well worth a visit.  There's video of Australian test captain Michael Clarke reading a statement from the Hughes's family here.

Thank you Phillip Hughes for being the sort of bloke you were.  The sort of bloke I'd hope my boys might become - a great Australian.

Here's Muso of WA with his tribute.

Leighton (Thiess) was involved with corrupt payments to win business during the time of the Dawesville process

The Gyles Royal Commission found that Leighton (parent company of Thiess) routinely engaged in corrupt and unlawful collusive behaviour in order to improperly enrich itself.   The conduct was ingrained and took place over a lengthy period.   Here is a link to the Australian Competition and Consumer Commission's webpage describing Leighton's behaviour:

Heavy Construction Tenders and ‘Loser’s Fees’

The tender for the Commonwealth Office at Haymarket, Sydney, in 1988 led to the exposure of long-term collusive practices by large construction firms. Before the close of tender, the industry association, the Australian Federation of Construction Contractors, called a meeting of the four firms bidding for the contract. It was agreed that the winning firm should pay the three losers $750 000 each, and the AFCC $1 million. The project was worth around $200 million. The transactions were to be concealed by invoices for consultancy services.

The arrangement was exposed by a New South Wales Royal Commission into the construction industry. The Federal Court issued penalties of $1.75 million on the companies and individuals involved. It came out in the case that ‘loser’s fees’ were a common arrangement in the industry.

The court found that there was an expectation (thus an agreement) that these fees were levied in addition to the contract price. As such, they were an imposition on the developer, in this case the Commonwealth government, and therefore on the taxpayer.

An industry association was central to this case:

Industry association legal cases

ACCC v CC Constructions and others (1999)

The tender for the Commonwealth Office at Haymarket, Sydney, in 1988 led to the exposure of long-term collusive practices by large construction firms.

Before the close of tender the industry association, the Australian Federation of Construction Contractors (AFCC), called a meeting of the four firms bidding for the contract. It was agreed that to enable recovery of overheads associated with preparing tenders the winning firm should pay the three losers $750 000 each, and the AFCC $1 million. The project was worth around $200 million. The transactions were to be concealed by invoices for consultancy services.

The arrangement was difficult to detect because it added fixed price components to the final tender prices, which were otherwise prepared in competition with each other. The competitive positions of each of these companies were not disturbed.

The arrangement was exposed by a New South Wales Royal Commission into the construction industry. The Federal Court issued penalties of $1.75 million on the companies and individuals involved. It came out in the case that ‘loser’s fees’ were a common arrangement in the industry.

The court found that there was an expectation (thus an agreement) that these fees were levied in addition to the contract price. As such, they were an imposition on the developer, in this case the Commonwealth government, and therefore on the taxpayer.

The Anti Competitive behaviour section tells us about Cartels - illustrated with case studies and examples.

Cartels case studies & legal cases

Read about cartel activities the ACCC has investigated.

Corrupt unions in combination with corrupt construction companies make for powerful cartels.   The Commission's CFMEU hearings have made that crystal clear.  Union monopoly coverage of labour with the power to inflict huge financial damage on construction companies means specialist investigative and enforcement authorities are needed to uncover corruption.   Like this Royal Commission.   For some years after Gyles, then Cole things would settle down in corrupt construction/union affairs.  Then like termites, back comes the corrupt behaviour.  

Cartels are just part of the anti-competitive smorgasboard available to people who don't like to compete, here is  a link to the ACCC on Anti-Competitive Agreements.

(As an aside, the legal authorities the ACCC quotes as setting out the test for "agreements" or "understandings" between people are fascinating, particularly in the context of Ms Gillard apparently coincidentally doing what Wilson says he wanted without ever knowing why or what he was up to):

.....they involve the development of a plan of action between two or more people that may not be enforceable at law but they have every intention of following.

In relation to the 'arrangement', the court has said:

... when each of two or more parties intentionally arouses in the others an expectation that he will act in a certain way, it seems to me that he incurs at least a moral obligation to do so. An arrangement as so defined is therefore something whereby the parties to it accept mutual rights and obligations.

TPC v Nicholas Enterprises Pty Ltd (No 2) (1979) FLR 83

As to 'understanding':

An understanding must involve the meeting of two or more minds. Where the minds of the parties are at one that a proposed transaction between them proceeds on the basis of the maintenance of a particular state of affairs or the adoption of a particular course of conduct, it would seem that there would be an understanding ...

Top Performance Motors Ltd v Ira Berk (Qld) Pty Ltd (1975) 24 FLR 286

To arrive at an understanding or to make an arrangement it is not necessary for anything to be written down. In fact, such agreements are often not put into writing. Nothing need even be expressed—a ‘nod and wink’ is sufficient.

If necessary, the court will infer the requisite 'meeting of minds' from circumstantial evidence such as evidence of joint action, similar pricing structures, or even from evidence of opportunities the parties had to reach an understanding.

It is important to consider both what is actually said and what each party understands to be the position.

Consider Wilson and Thiess/Leighton in the context of what you've just read about proving arrangements/understandings/agreements.

The ACCC's predecessor took Leighton and its competitors along with some executives before the Federal Court, some of the links to the cases are here:

Trade Practices Commission v Cc (New South Wales) Pty Limited Formerly Known As Concrete Constructions (Nsw) Pty Limited, Peter Woollard, Holland Stolte Pty Limited, Graham Ronald Duff, Multiplex Constructions Pty Limited, Geoffrey Thomas Palmer, Leighton [1995] FCA 1236 (5 May 1995)

Here is the then Trade Practices Commission's pleaded statement of facts, accepted by the Federal Court in its sentencing processes.

"The following is an account of the facts alleged by 
the Commission in the amended statement of claim. 
At all material times Concretes, Hollands, Multiplex 
and Leightons carried on business as building and 
construction contractors in New South Wales and were 
members of the AFCC. On or about 11 August 1988, 
Australian Construction Services ('ACS'), part of 
the Commonwealth Department of Administrative 
Services, for and on behalf of the Commonwealth of 
Australia, invited Concretes, Hollands, Multiplex 
and Leightons ('the Tenderers') to submit tenders 
for the Haymarket Project. 
In or about September or October 1988, John 
Cunningham ('Cunningham'), Director of Special 
Projects with the AFCC, for and on behalf of the 
AFCC, contacted the Tenderers and notified them of 
his intention to conduct a meeting of them in 
relation to the Haymarket Project prior to the 
closing date for tenders. The Tenderers accepted 
Cunningham's invitation. The intention of 
Cunningham and of each of the Tenderers in the 
setting up of, and agreement to attend the meeting, 
was that the Tenderers would be enabled to take into 
account in the preparation of their tenders any 
matters agreed at the meeting, which they expected 
would include arrangements or understandings on the 
subjects of a 'special fee' payable by the 
successful Tenderer to the AFCC, and unsuccessful 
tenderers' fees payable by the successful Tenderer 
to the three unsuccessful Tenderers. 
Prior to the proposed meeting, Richmond instructed 
Cunningham to propose that the successful Tenderer 
should pay to the AFCC a special fee of $1,000,000. 
The meeting took place in September or October 1988 
and was attended by Woollard of Concretes, Duff of 
Hollands, Palmer of Multiplex, Dixon of Leightons 
and Cunningham of the AFCC ('the Meeting') when it 
was agreed that each Tenderer would, if its tender 
was accepted, pay a special fee to the AFCC of 
$1,000,000 ('the Special Fee'), would take its 
obligation to do so into account in the preparation 
of its tender, and would not disclose to ACS the 
terms of the arrangement or understanding or the 
fact that the Meeting had taken place (para 21 of 
the amended statement of claim). 
After that agreement ('the Special Fee agreement') 
had been reached, Cunningham was asked to leave the 
room which he did and the Meeting resumed between 
the four representatives of the Tenderers who agreed 
that the successful Tenderer would pay to each of 
the unsuccessful Tenderers an unsuccessful 
tenderer's fee of $750,000 ('the UTF'), and that 
each Tenderer would take this obligation into 
account in the preparation of its tender, and would 
not disclose to ACS the terms of the arrangement or 
understanding or the fact that the Meeting had taken 
place ('the UTFs agreement') (para 24 of the amended 
statement of claim). 
The Tenderers did take into account the arrangements 
or understandings reached at the Meeting in the 
preparation and submission of their tenders; ACS 
awarded the contract to Hollands; Richmond caused or 
procured the AFCC by its National Executive 
Committee to ratify and levy the Special Fee on 
Hollands; in or about January or February 1989 
Hollands paid $200,000 or $300,000 to the AFCC as 
part of the Special Fee; subsequently over a period 
from 24 July 1989 to 1 February 1990 the AFCC sent a 
series of seven invoices of $100,000 each to 
Hollands which it paid on account of the Special 
Fee; Concretes, Multiplex and Leightons each sent to 
Hollands a series of invoices which represented 
parts of the respective UTFs and totalled, in 
respect of each of the other three tenderers, 
$750,000 which Hollands paid. Each of the invoices 
sent by the AFCC and by Concretes, Multiplex and 
Leightons to Hollands purported to be claims for 
'consultancy services' which had not been provided 
and which were never intended to be provided. 
The amended statement of claim further alleges that 
the conduct pleaded constituted various 
contraventions of the Trade Practices Act 1974 ('the 

This case shows that Leighton routinely engaged in corrupt practices to win business during the 1980s/early 1990s.   In order to make profits, Leighton was prepared to take or pay money in bribes/incentives/secret commissions.   In the Commonwealth Building case Leighton was the recipient of money as a result of the unlawful arrangement with its competitors, had it won that tender it was prepared to pay money out in order to maintain the arrangement.

The construction industry has relatively tight profit margins.   Beyond the costs of bidding for jobs (covered by the arrangement above) once a contract is won and underway, profitability is exquisitely sensitive to industrial disputes. If you're prepared to act corruptly on a relatively low cost exposure, the temptation to act corruptly to avoid killer-costs like industrial action must have been hard to resist.

It seems to me inevitable that a corrupt company like Leighton would gravitate towards a corrupt union official like Wilson.  Leighton was prepared to systematically and corruptly take or pay money to its competitors to provide a small financial return on its costs of bidding for projects, in the order of a few hundred thousand dollars.   Strike action could cost it millions, or the entirety of its profits on certain projects.   We have established what Leighton was - a company that would engage in corrupt payments to its competitors.  What remains to be proven is the character of its payments to the corrupt union boss Mr Wilson.

The proposition that Thiess/Leighton believed they were getting workplace reform/training services from Wilson/Blewitt and their strange corporate structure stretches credulity.   Invoices were backdated to describe training from several months before any agreement was reached, indeed the invoices covered some months before the project was active.   The invoices continued 8 months after the project was cut off.  No training ever took place.   That means no training could be seen or assessed for financial signoff of Wilson's invoices.  No pretence at training took place.   Thiess got nothing, yet no one in Thiess raised any alarm bells.  

The Federal Court case highlighting Leighton's corrupt practices shows us Leighton was itself prepared to raise dodgy consultancy invoices in order to trigger corrupt payments.   It understood the dodgy invoice caper very well.

In that context it's common sense that the payments to Wilson's dodgy association were more likely corrupt than genuine.  The Federal Court tells us Leighton was corrupt, add the corrupt Wilson, the corrupt lawyer Gillard and the "persuadable" Carmen Lawrence government and you get the "pefect storm" for fraud.    It's certainly worthy of investigation rather than the recitation of implausible cover stories from people in nice suits.

Corruption arises from culture and Leighton's was corrupt.   Wilson/Gillard were too.  Hugh Morgan tells us then Premier Carmen Lawrence did what Wilson said in fear of losing her job as Premier.

I hope the Royal Commission, like me, is still on the case.

Wilson and Gillard were arguing for the AWU WRA Inc just as the Gyles Royal Commission report was released

In July 1990 the Greiner Government set up the Gyles Royal Commission of Inquiry into the construction industry in NSW.  It ran for 19 months and cost more than $20M (1991 money).   

It delivered its final report in May, 1992.

On 27 May 1992 The Canberra Times published the following story.

During May, 1992 Gillard was in correspondence with the WA Corporate Affairs Commissioner.  It's hard to believe that the Gyles report didn't prompt her to ask more questions of Wilson.  Gillard was an IR professional and reports about the Gyles Commission were front page news.  It would have taken some effort to miss reading about his findings and recommendations. 

So read on as if you were an IR lawyer who had just been asked to set up an "unconventional" slush fund.  Any bells ringing?   Your slush fund says its purpose is to "encourage workplace reform for workers in the construction industry" (as per the 6 March 1992 ad) or "development of changes to work to achieve safe workplaces" (as per the incorporation application made on 22 April 1992) but you knew all along it was really "a slush fund to raise money for Bruce's personal election expenses".

Gyles jungle

Gyles jungle two

On 28 May, 1992 The Canberra Times ran this story (click here for the full story, it's a partial grab below):

Gyles may something

On 13 June, 1992 the following story was published - just as Wilson and Gillard awaited the arrival of their Certificate of Incorporation for their Construction Industry slushy.

Gyles june

In March, 1992 authorities started to lay criminal charges as a result of the Commission's findings.   This story is from Friday, 20 March, 1992.

Charges laid

None of the reports, recommendations, charges or widespread community outrage slowed Gillard or Wilson down one bit.   None of it triggered any questions from her.  It beggars belief.

No wonder Wilson was attracted to the construction industry.


Here's part of a speech given by John Murray of the Master Builders Association in 1998 about Commissioner Gyles's findings on the construction caper in 90-92.

Murray mba

As part of the Royal Commission into Productivity in the Building Industry in NSW,
Commissioner Gyles inquired into and reported on the extent of illegal activities in the
construction industry.  Whilst the phrase “illegal activities” has a wider meaning than “crime”,
a vast majority of the illegal activities found to exist by Commissioner Gyles involved criminal
conduct to some extent.  His Report was released in 1992.  Given the comprehensive nature of
the Report this paper proposes to examine his findings and to analyse what changes have
occurred since the release of his document (this speech given in 1998).

The Table of Contents for that part of his Report dealing with illegal activities included the

• physical violence and intimidation;
• corrupt, improper and irregular payments;
• fraudulent conduct;
• theft;
• extortion;
• taxation;
• 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 reference to this table of contents Commissioner Gyles stated

“The table of Contents for this part of my Report gives the conspectus of the nature
and extent of illegal activities that occur within or in relation to the building industry in
NSW.  Reference to it relieves me of the necessity to summarise the types of activity
involved.  They range from physical violence and a threat of physical violence at one
end to petty pilfering of building materials at the other.  In between there is a great
variety of illegal activities, essentially economic in nature or effect, from collusive
arrangements involving giant corporations and industry associations to labour-only sub
contractors paying small amounts of graft to project managers.  Those involved range
from managing directors of large corporations to labourers on site.  No sector of the
industry has been immune.”

Commissioner Gyles specifically found that there was evidence of wide spread theft of building
materials and plant and equipment.  Scaffolding was one example that was followed up in
other hearings.  He concluded that in respect of scaffolding that there must be an active and
well organised black market in operation.

Commissioner Gyles also stated that there was strong evidence that members of trade unions
in the industry were prepared to use and threaten the use of direct industrial action and the
consequent economic harm inflicted on companies and individuals to achieve their objects for
the time being regardless of and often in breach of the law.

Perhaps most disturbingly he made the following conclusions in relation to employers in the
industry.  Commissioner Gyles stated

“there is evidence of widespread lack of integrity and probity amongst the management
of contractors and others involved in the industry...This is reflected, for example, in the
offering of dishonest inducements to union officials, workers, council inspectors,
Workcover inspectors and those able to procure work; soliciting or accepting
dishonest inducements from those seeking work; involvement in collusive and anticompetitive behaviour, including surreptitious receipt and payment of special and
unsuccessful tenders fees; the exploitation of the subsidy of a group apprenticeship
scheme; the manufacturing and use of false documents to cover up illicit or unlawful
payments; the obtaining of free or discounted work and materials, either in fraud of the
employer or the revenue, or as a result of pressure on sub contractors and suppliers;
the engagement of persons of ill repute to solve industrial or commercial problems by
actual or threatened violence or other illegal means; continuing to trade whilst
insolvent in fraud of creditors; and cutting corners and safety regulation legislation and
industrial awards requirements”.

Commissioner Gyles went on to state that some of the behaviour listed above was explained
by, if not excused by, the activities of trade unions.
Commissioner Gyles also stated

“Observance of the law and law enforcement in general play very little part in the
industry.  The law of the jungle prevails.  The culture is pragmatic and unprincipled.
The ethos is to catch and to kill your own”.

Commissioner Gyles concluded this part of his Report by saying:

“The effect of illegal activities upon the culture of the industry and upon the
commercial and industrial morality of participants in it is, in the long run, greater than
the direct economic consequences.  Once it becomes acceptable to break, bend, evade
or ignore the law and ethical responsibilities, there is no shortage of ways and means to
so.  Those who pay and suffer the other consequences of disruption  in the end are the

Much more soon.

James Glissan for the TWU - the TWU is pretty much perfect and the Royal Commission is purely political

Yesterday James Glissan QC appeared at the Royal Commission to make oral submissions for the Transport Workers' Union.

Each of the bullet points below is a direct quote - I've tried to set out his major points using his own words - he said he wanted to talk about:

  • the nature of the Commission itself..... both the flavour and the nature of the position of the Commission to date.

He submitted that the Commission is a conservative, political exercise pre-ordained to demonise unions:

  • (The Royal Commission itself) might be described as an unhealthy conservative political polemic in relation to trade unions.
  • there is no evidence in relation in relation to the union movement generally of any systemic corruption which would require legislative interference; and that there is no material properly analysed and the evidence properly considered which would indicate that there was a need for increased governance in relation to unions
  • some instances of conduct that could be described as corrupt and certainly some conduct that could only be described as dishonest........common human experience indicates that there will always be found some dishonesty and some corruption from any such aggregation.
  • in terms of corruption, there have been individual instances as I have advanced, but there is no evidence of any systemic corruption which would require a legislative interference. As I saw the Terms of Reference, they themselves contained within them some indicia of pre-determination
  • The Terms of Reference were summarised by the Commission itself, and indeed the Commissioner sits under the Coat of Arms and next to it is the "Commission into Trade Union Governance and Corruption". That assumes, by its very title, a conclusion that the matters to be inquired into exist both as to deficiencies in governance and to the existence of corruption, not, as I have said, into whether corruption exists or governance issues exist, and the Terms of Reference, as they have been expressed, assume that systemic issue.
  • There has been at present, however, a failure to consider the apparent probity of unions with regard to the general corporate community as to both the incidence and the degree of corrupt activity.
  • there is a need to carefully distinguish between the philosophical disagreement with elements of the union movement and a systemic failure which requires legislative interference or changes to the governance arrangements......the process.....must be making evidence based findings divorced from philosophical constructs and then arriving at conclusions based upon the evidence that has been clearly established.

He thinks Senior Counsel Assisting is in on the conservative agenda:

  • (on) Counsel Assisting's submissions, we would make the general proposition that those are submissions that are predominantly based on a philosophical rather than an evidence based analysis of the material before the Commission.

The TWU believes that the current criminal law and police processes are sufficient, there was never any need for this inquiry:

  • The evidence has revealed that any union corruption is to be associated with individuals rather than with the movement itself, and that any corruption within unions has not been shown to be systemic, but, more importantly perhaps than either of those things, the evidence that has been before the Commission and has so far been the subject of submission and to a degree pronounced upon establishes that the laws both civil and criminal are adequate to combat corruption where it occurs.
  • Without moving into the irrelevant, there is an appeal being conducted in Melbourne in relation to the corruption of a union official. There was an exhaustive analysis of the behaviour of a former Prime Minister in this union which was found not to be corrupt. Those are things where the adequacy of the present legal regime has been demonstrated, strongly demonstrated, and argues strongly against any need to increase the level of regulation that is to be imposed on what are, after all, very important political voluntary associations, however structured.

He doesn't want any recommendations this December, leave it till next year please:

  • we strongly urge the Commission to make no recommendations at an interim level which suggests any significant changes or any increased regulation of the trade union movement in general.
  • The principal thrust of our submissions to the Commission and to my learned friend today is to commend caution to the Commission in that interim report in terms of any findings and in terms of any recommendations that might be thought to be made. We would respectfully suggest
  • that this is a time to defer rather than to make recommendations because the evidence is not yet complete.

If you are an office holder in the ACTU, or the Labor Party, you should be able to use your union slush fund more broadly than if you're just an office holder in one union:

  • It is important that those who control, operate and are involved in the general union movement rather than simply particular unions are recognised as having an interest in the whole, because the whole function of the union movement, as we hope we have demonstrated in our submissions in writing, where we put the early history of unions, their development through to the present time, has been the use of combination to place workers in a position where they can hope to compete and hope to achieve equality with those who employ them, where they can hope to establish, hope to create, and hope to maintain decent standards of safety of employment, of time in employment, and of wages.

And that means you should be able to use your slush fund to get a mate into a top job in another union, just like this:

  • Where the funds have been used more generally, they have been used for the benefit of the union movement as a whole, not for the advancement of an individual's personal interest. The clearest example of that is the involvement of McLean in the transformation from corrupt to one mightalmost say exemplary of the Health Services Union and its involvement in the removal of Michael Williamson and the advancement of Gerard Hayes.

Finally, there's no point trying to improve the TWU, it already has exemplary governance.   Thanks for your suggestions about ways to make it better, but Mr Glissan can't see how you could improve it, sounds like he's saying it's perfect!

  • Transport Workers Union has over many years striven to improve its governance, to improve its compliance, to improve its record keeping and that at this point it is difficult to discern current defects in its governance which would justify criticism of it.

You may remember Mr Glissan from his Inner-Game-of-Justice Master Class series - here's the episode on self-control.



The Royal Commission is required to inquire into the matters set out in its terms of reference

Here are the first couple of paragraphs of the Letters Patent that appoint The Honourable John Dyson Heydon AC QC as a Royal Commission of Inquiry.

Require and authorise

Note that he is a Commission of inquiry.   He is required to inquire into the matters set out in the Letters Patent.  

If an early and perfunctory inquiry is later contradicted by sound documentary evidence, the Commission should politely say so and continue to inquire - to get to the truth.   In the case of the Dawesville Channel contract, Senior Counsel Assisting the Commission appears prepared to accept the sketchy recollection of Ralph Blewitt, who says there was a tender process.   Senior Counsel Assisting makes the observation that documents referred to by me (that establish there was no tender process) are not in evidence before the Commission. 

All of that goes to prove that the Commission's Inquiry has been insufficient.

There should be no blame or hurt pride in admission of the bleeding obvious.  But damage could emerge if the Commission was assisted by its Senior Counsel to accept wholly inadequate evidence as accurately describing central facts.

I hope the Commission resolves to inquire further.

Craig Thomson admits he lied to me about paying for prostitutes with HSU money

On 4 August 2011 Paul Murray had me on his show on Sky - it's a good summary of the radio interview I'd done with Thomson a few days earlier, where he lied through his teeth.

I've copped heaps, Kathy Jackson copped heaps, anyone who stated the obvious - that Thomson was lying - copped heaps.

Now, as he faces gaol, Thomson has fessed up - here's The Australian today:

Craig Thomson ‘lied about prostitutes to divert attention from scandal’

DISGRACED former Labor MP Craig Thomson lied about using union credit cards to pay for ­prostitutes because he felt “under attack”.

The explanation emerged ­yesterday as Victorian County Court judge Carolyn Douglas heard Thomson’s appeal against his ­conviction for 65 theft and ­dishonesty offences relating to his use of Health Services Union ­credit cards while he was national secretary.

A parliamentary privileges committee is inquiring into ­whe­ther Thomson deliberately misled parliament during a statement in May 2012. The Leader of the House, Christopher Pyne, told The Australian: “I’d be surprised if the ­admission by Mr Thomson’s lawyers today wasn’t of great interest to the committee.”

Greg James QC told the court yesterday that Thomson was “not merely a member of staff” and was more like a chief executive.

Thomson had publicly lied when the allegations emerged in a bid to “divert” attention from the scandal. “He was under attack as allegedly misusing the money by spending it on prostitutes,” Mr James said. “To rebut that, he lies. He was under direct attack for moral turpitude ... he was lying to divert the inquiry from him in ­respect of that moral turpitude.”

Judge Douglas replied that she recalled the interview Thomson gave to journalist Laurie Oakes in which he denied using escorts and said factional enemies with access to his credit cards had threatened to set him up.

Thomson has opted not to fight the evidence of his credit card use in court, agreeing to a statement of undisputed facts that Judge Douglas will rely on to decide whether the charges are proven.

Thomson has repeatedly maintained his innocence, describing the ­undisputed facts as a tactic to save on legal costs.

Mr James said Thomson was entitled to spend cash withdrawn using his union credit card, and theft charges were inappropriate as the money had always belonged to the bank, not the HSU. “It’s neither here nor there that the money came from members originally.”

The prosecution says that it is ­“utterly implausible” Thomson had authority to use the credit cards on personal expenses.

Judge Douglas will deliver her decision on December 15. She may uphold the existing one-year jail sentence, with nine months suspended, or impose a new sentence.

Thomson wrote this bulltish email to his parliamentary colleagues on 8 June 2011:

From: Thomson, Craig (MP)
Sent: Wednesday, June 08, 2011 12:39 PM
To: Thomson, Craig (MP)
Subject: Fairfax v Thomson

Dear Colleagues

I am writing to you as you may have seen reports in the Fairfax press regarding my defamation action. The article was totally inaccurate and wrong. The facts are as follows:

1. I took defamation action against the Health Services Union and separate action against Fairfax;

2. The HSU settled on a confidential basis with me some six months ago. Whilst it was a confidential settlement it was one that I was very happy with and as a consequence withdrew my legal action;

3. Over a month ago I reached a confidential agreement with Fairfax. This was reported in the press and the agreement filed in court as a settlement of my matters and again the legal matters where withdrawn. As with the HSU settlement I was very happy with the outcome.

4. An AEC investigation cleared me of the allegations raised by Fairfax regarding electoral spending

5. I have always strenuously denied the allegations made against me and I continue to do so.

It is clear that Fairfax have both defamed me again and breached and misrepresented a confidential deed that settled the matter between me and Fairfax. I have now been referred this matter again to my lawyers.

I thank you for your continued support in this matter and hope this corrects the grossly inaccurate and misleading reporting in the Fairfax media.

Yours faithfully

Craig Thomson

Graham Richardson and Sam Dastyari must have known that email was complete and utter crap, they organised the deal whereby the Labor Party paid his legal bills.

THE NSW Labor Party paid almost $350,000 in legal costs for Craig Thomson before the troubled MP was suspended from the party in May.

More than two-thirds of the amount - $240,000 - was paid to Fairfax Media, the publisher of the Herald, under a settlement reached a year ago when Mr Thomson withdrew defamation action he instituted in 2009.

Another $108,366.87 was to cover Mr Thomson's other legal expenses and some of Labor's own bills related to the case, taking the total the ALP paid to $348,366.87.

The ALP will divulge the figure at its annual state conference next month after internal pressure from the NSW senator John Faulkner, who argued that members had a right to know.


Here are a few links to the early days of the Thomson story.



Senior Counsel Assisting the Royal Commission unimpressed by Gillard's attack on witnesses

Here is Senior Counsel Assisting's response to Ms Gillard's submission.

Gillard one Senior counsel generic funds_009 Senior counsel generic funds_010 Senior counsel generic funds_011 Gillard two

If you prefer one journalist's interpretation to reading it yourself, here's Brad Norrington from The Australian.JULIA Gillard has suffered a ­setback in her bid to demolish ­allegations she received “wads of cash” from a corrupt union boss boyfriend in the 1990s, after the evidence of two key witnesses was accepted as reliable. The counsel assisting the royal commission into union corruption, Jeremy Stoljar SC, yesterday dismissed the former Labor prime minister’s argument her evidence should be given more weight than that of Wayne Hem, a former Australian Workers’ Union staffer, and Athol James, a retired builder who helped to renovate Ms ­Gillard’s home… Sticking with his view that Mr Hem and Mr James were telling the truth, Mr Stoljar yesterday gave “no probative force” to Ms Gillard’s request in a submission this month “to give significant weight to (her) good character and reputation” and to consider that the commission had little or no evidence about the character and reputation of two witnesses with accounts that conflicted with her account. The counsel assisting said that while Ms Gillard was someone who had “enjoyed a long and immensely successful career in public life”, the inference could not be drawn that because Mr Hem and Mr James were “private persons” without power and influence that they were “not of good character and reputation”.

Royal Commission to hear evidence at 2PM today

Commission outlines timetable for oral submissions

25 November 2014

The Royal Commission into Trade Union Governance and Corruption has announced its timetable for oral submissions.

Hearings will be held in the Commission’s hearing room, Level 5, 55 Market St Sydney on Wednesday 26 November and Friday 28 November.

The Commission received six applications for oral submissions, all of which were granted.

The following hearing schedule will apply:

Wednesday, 26 November 2014 (commencing at 2.00pm)

  • Transport Workers’ Union (45 minutes)
  • Maritime Union of Australia (30 minutes)

Friday, 28 November 2014 (commencing at 8.30am)

  • Brian Fitzpatrick (20 minutes)
  • Construction, Forestry, Mining & Energy Union (2hrs)
  • Brian Parker (45 minutes)
  • Peter Mylan (45 minutes)

Oral submissions can be watched live through the Commission’s webcast

During 2014, the Commission conducted 57 public hearings involving more than 200 witnesses in Sydney, Melbourne, Perth and Brisbane. The Commission has also held 14 private hearings.

Evidence has been heard in relation to the Australian Workers' Union (AWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU); Construction, Forestry, Mining and Energy Union (CFMEU); Health Services Union (HSU); Maritime Union of Australia (MUA); National Union of Workers (NUW); Shop, Distributive and Allied Employees Association (SDA); and the Transport Workers' Union (TWU).

The Commissioner will deliver his interim report to the Governor-General on Monday 15 December, 2014.