Stoljar - the proposal that Thiess John Holland make dodgy payments to the AWU came from Bill Shorten.

 66. Moreover consideration of the objective logic of events supports the proposition that at least a general discussion concerning the provision of financial support by TJH (the Thiess John Holland joint venture)  to the AWU would have taken place involving Mr Shorten and Mr Sasse. Each was the senior person in the negotiation. Each in due course handed over the negotiations to another, Mr Shorten to Mr Melhem and Mr Sasse to Mr Rzesniowiecki. Mr Melhem and Mr Rzesniowiecki in due course negotiated and reached agreement on a specific amount, as set out further below. It seems unlikely that this agreement would have sprung into existence on the sole initiative of Mr Melhem and Mr Rzesniowiecki; it is more likely that such an agreement put into effect a proposal that had already been canvassed between their respective superiors.

He says this about Mr Melhem - when you read the word "Melhem" ask yourself why "Shorten" isn't there too 

para 94 .....there is no reason for Mr Melhem to have participated in the falsification of invoices if the agreement was simply to provide services that were in fact delivered.

Cesar Melhem acted dishonestly within the meaning of this section. Despite his protestations that all invoices were in relation to services that were in fact delivered, that is demonstrably not the case. Cesar Melhem must have known this to be the case. Moreover, to the extent that the invoices did reflect a service in fact delivered in whole or in part, Cesar Melhem knew that they concealed an entirely different arrangement, namely, payment for the dedication of organisers to the project. He did so with a view to producing a gain for the AWU in the sense that the purpose of the invoices was to procure payments of money to the AWU.

.........what was in reality no more than a very large donation from TJH to the AWU must inevitably have weakened the AWU’s bargaining position, both in relation to the 2005 EBA and in relation to the AWU’s engagement with the workers on the Eastlink site over the life of the project. It compromised the AWU’s capacity to represent the interests of its employee members when it came to industrial relations issues that may arise on site. That is because the relevant organisers and officials were effectively in the pay of the employers (whose idea was that again Jeremy?)

203. The fact that the payments were described as being for the purpose of compensation or defraying of expenses involved in maintaining a presence on the site does not cure the apparent conflict for the reasons stated above. Moreover, the fact that the terms of the 2005 EBA, and the commitment of organisers and other officials to the Eastlink project, may have been of benefit to the workers, is irrelevant to the question of whether negotiation of a side deal produces a conflict of interests. It ignores the potential of such side payments to affect the capacity of the AWU to represent the interest of its members, both when undertaking negotiations and in dealing with TJH over the course of the project. Once a side payment is sought and made, the question arises as to whether a better result might have been obtained had there been no side deal that compromised the AWU’s bargaining position.

204. Moreover, there is no suggestion that the agreement was disclosed to the AWU members at any stage of the project.308 Cesar Melham contends that the union made a profit on the invoices which allowed it to provide additional resources to the project site,309 but in the absence of any disclosure of the arrangement to the members there was no means by which the members employed on the Eastlink project could be satisfied of this.

205. It is submitted that the AWU and Mr Melhem each owed fiduciary duties to members employed by TJH. The AWU, in entering into the arrangement and seeking payments pursuant to it, acted in a position of actual conflict of interest and duty or where there was a real and substantial possibility of such conflict. The AWU’s self-interest conflicted with its fiduciary duties to the TJH employees. Mr Melhem advanced the interests of the AWU in circumstances where those interests conflicted, or where there was a real and substantial possibility of conflict, with his duties to the members of the AWU who were or would be TJH employees.

Unlawful commissions - how is Shorten not mentioned here?

206. Section 176 of the Crimes Act 1958 (Vic) relevantly provides:

(1) Whosoever being an agent corruptly receives or solicits from any person for himself

or for any other person any valuable consideration—

(a) as an inducement or reward for or otherwise on account of doing or forbearing to do or having done or forborne to do any act in relation to his principal's affairs or business; or

(b) the receipt or any expectation of which would in any way tend to influence him to show or to forbear to show favour or disfavour to any person in relation to his principal's affairs or business; or

(2) Whosoever corruptly gives or offers to any agent any valuable consideration—

(a) as an inducement or reward for or otherwise on account of doing or forbearing to do or having done or forborne to do any act in relation to his principal's affairs or business; or

(b) the receipt or any expectation of which would in any way tend to influence him to show or to forbear to show favour or disfavour to any person in relation to his principal's affairs or business—

shall be guilty of an indictable offence, and shall be liable if a corporation to a level 5 fine and if any other person to level 5 imprisonment (10 years maximum) or a level 5 fine or both.

207. A detailed analysis of the above provision is detailed in counsel assisting’s submissions in relation to Cleanevent.310 Significantly, a union official engaged to act on behalf of members is an agent for the purposes of s 176 and a corporation may be an agent for the purposes of s 176 of the Crimes Act 1968 (Vic). 

208. The AWU is and was a body corporate by operation of s 27 of the Fair Work (Registered Organisations) Act 2009 (Cth) and its predecessor legislation. In the present case, Cesar Melhem was as Assistant Branch Secretary, by the rules of the AWU, empowered to act consistently with the objects of the Union in relation to representing the interests of members in the course of their employment,312 and was, consistently with authority and the definition of agent in the Crimes Act 1968 (Vic), an ‘agent’ within the meaning of s 176.313 He was, in that sense, the directing mind and will of the AWU ( from MPS - just a reminder about poor old left out Bill Shorten).

209. In light of the evidence of Messrs Sasse and Connell of the significance of the 2005 EBA to the project and the ongoing significance of the AWU maintaining a presence on the site (as accepted by Gordon Ralph) it is apparent that the payments agreed to and made by TJH:

(a) would objectively tend to influence Cesar Melhem and the AWU to show favour to TJH in relation to its attendances on site and its attitude to industrial relations issues arising in the course of the project;

(b) to make the promised commitments to dedicate organisers to the project to, inter alia, increase the influence of the AWU and reduce that of the CFMEU and promote industrial peace, being a step taken in relation to the business and affairs of the members; and

(c) was actually intended by Julian Rzesniowiecki and TJH to influence Cesar Melhem and the Union to do these things.

210. There is also a strong inference that Mr Melhem and the Union would have understood that Julian Rzesniowiecki agreed to make the payments comprehended by the side deal for the desired purpose of Union officials showing favour towards TJH, or dedicating organisers so as to ensure industrial peace. For the purposes of an offence against s 176(1)(b) it does not matter whether Cesar Melhem had any intention to show favour.

211. The elaborate scheme which was implemented to disguise the payment as payments for services, and to conceal the arrangement from the workers, supports the view that the payment was ‘corrupt’ according to ordinary standards of conduct (if it were assumed that was an element of the offence in Victoria). That is especially so when the means by which the payment was solicited by the AWU was by means of falsified invoices.  (NB from MPS - this only applies to Eastlink, not Dawesville.   Why?)

212. On his own evidence, Julian Rzesniowiecki caused the payments to be made for the purposes described above. Whether his conduct should be imputed to TJH requires consideration. TJH’s accounting records provide a prima facie basis for a finding that the payments were made by it or adopted by it in some way. Julian Rzesniowiecki’s role as the person with authority to cause expenses to be incurred in relation to human resources matters is clear, because on the evidence his approval of the invoices enabled them to be paid. In doing so, he acted in accordance with a budgetary allocation that enabled the expenses to be incurred without scrutiny, but on the basis that he was not entirely forthcoming as to the purpose of the payments.315 However, from at the latest early 2006, he had disclosed the nature of the agreement to Gordon Ralph, the Project Director, who had assented to the payment arrangement continuing.316 There can be no doubt that as Project Director Gordon Ralph was the directing mind and will of the company.

213. Accordingly, the Commission should conclude that:

(a) Mr Melhem may have committed an offence against s 176(1)(a) and/or (b) of

the Crimes Act 1958 (Vic) by soliciting a corrupt commission (Bill Shorten anyone?)

(b) Mr Rzesniowiecki may have committed an offence against s 176(2)(a) and/or

(b) of the Crimes Act 1958 (Vic) by offering a corrupt commission; and

(c) The AWU may have committed an offence against s 176(1)(a) and/or (b) of the

Crimes Act 1958 (Vic) by soliciting or receiving a corrupt commission.

So the AWU may have committed the offence.   But not Bill Shorten.  What the????

Liability of company officers for certain offences by company

(1) Where an offence committed by a body corporate under section 81, 82 or 83 is proved to have been committed with the consent or connivance of any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence, and shall be liable to be proceeded against and punished accordingly.

(d) TJH may have committed an offence against s 176(2)(a) and/or (b) of the

Crimes Act 1958 (Vic) by giving a corrupt commission.

The AWU on any view adopted Mr Melhem’s conduct by receiving the payments in question and dealing with them for its own benefit.318 That is sufficient to make the AWU potentially guilty of an offence under s 83 of the Crimes Act 1958 (Vic).

Liability of company officers for certain offences by company

(1) Where an offence committed by a body corporate under section 81, 82 or 83 is proved to have been committed with the consent or connivance of any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence, and shall be liable to be proceeded against and punished accordingly.

223. Cesar Melhem was in the position of being a director, manager, secretary or other similar officer of their respective bodies corporate. He caused or procured the creation of the false documents that attracted potential liability under s 83 of the Crimes Act 1958 (Vic).

224. For the above reasons, it is submitted that Cesar Melhem, the AWU and Julian Rzesniowiecki may have committed offences under s 83 of the Crimes Act 1958 (Vic) in respect of the creation of the false TJH invoices.

But not Bill Shorten?

Here are the AWU National and Victorian AEC annual financial disclosure statements for the year 2006/07.

The Thiess John Holland money stands somewhat amongst the $11K from Con Sciacca and the like.  There is simply no way that an accountable National Secretary of the AWU could have insulated himself from knowing about what was going on there.

Here's the AWU National Return for 2006/07

(I've edited out the income from AWU branches - that leaves the following)

And here's the Victorian Branch for the same year:

Note $134,500 from the Thiess John Holland JV listed as a donation?   Freudian slip.   Cesar slipped a supplementary return in to sort that out.

The $134,500 from Thiess John Holland is the biggest single source of income for the AWU in that last year of Shorten's time at the helm.

And finally where did at least some of that money go?  Well while Bill Shorten was enjoying his campaign staff funded by Unibuilt/Unibilt, he was also enjoying the financial support of the AWU along with Yvette D'Ath in Petrie and the unsuccessful AWU/Labor candidate who stood against the late Don Randall in Stirling, as this supplementary disclosure made by Paul Howes shows:

To Summarise

• The annual $100K payment from Thiess John Holland to the AWU was Shorten's idea
• Shorten was the Victoria State Secretary and National Secretary as the money came in
• Shorten was the senior executive of the AWU and responsible for its finances and financial reporting
• Shorten personally benefited from AWU money used in his campaign for a new job in the parliament
• The AWU should be charged with soliciting and receiving secret commissions
• Cesar Melhem should be charged
• Bill Shorten should walk free.

Capisce?   Good then please let me know how justice has been served.