Full fascinating judgement of the Federal Court on Cesar Melhem taking the fall on the AWU's phantom memberships
The big question that jumps out of this case is "Where's Bill Shorten?"
During Shorten's time at the helm (up until November 2007 when he entered parliament) the AWU was notorious for receiving bulk payments from employers to pay union fees for employees who had no idea they were being enrolled in the union.
Melhem appears to have continued, rather than initiated the practice, but he's the only person against whom legal action was taken.
One of the matters that Melhem's been fined for is Bill Shorten's deal with Netball Australia's players (he was the interim CEO of the netballers association), another was Victoria's jockeys - both of those groups and their inflated AWU membership numbers appear in the judgement below - but the court only looked at the AWU's offending from Dec 2007/Jan 2008 onwards, just after Shorten had left the union for his seat in parliament (read a little of Shorten's history in the articles I've reprinted below the court's judgment).
Love to know what it took to get Cesar to take the fall alone.
HE boasted of signing up top sporting stars to the ranks of the Australian Workers Union.
Except there’s a problem with union chief turned Labor leader Bill Shorten’s bragging — it never actually happened.
As AWU national secretary, Mr Shorten claims to have pioneered the strategy of signing up celebrity athletes.
But that has come under scrutiny in the Royal Commission into Trade Unions, which last week found those athletes — including top netballer Liz Ellis and later Melbourne Cup winning jockey Michelle Payne — were never actually proper members. In 2005, Mr Shorten spruiked the arrangements in a press release titled: “Australia’s top netball stars have joined the AWU in a new alliance to improve the incomes and health and safety conditions of netball players.”
Mr Shorten said: “The AWU’s experience in representing other elite sportspeople such as horseracing jockeys will help us to better represent the interests of some of the most talented women in Australian sport.
But according to the royal commission the athletes themselves were never members, with their industry organisations simply making ex-gratia payments to the AWU.
“Were the netballers ever members of the AWU? Clearly they were not. No membership applications were completed and the required membership contributions were not made,’’ the final report states.
According to the AWU’s John-Paul Blandthorn, the arrangement was negotiated by athletes on behalf of the Australian Netball Players Association and the royal commission found that it was never reduced to writing.
“What, if anything, did the arrangement require of the AWU? This is quite unclear,’’ the commission report states.
“John-Paul Blandthorn said that his understanding was that the netballers who became members of the ANPA did not fill out any membership application forms to become members of the AWU. Cesar Melhem did not recall whether any such forms were provided. The commission has sought production of AWU membership application forms in respect of ANPA members listed on the invoices. No membership forms were produced.’’
In June, Mr Blandthorn gave evidence to the royal commission that linked Mr Shorten to the “ex gratia” payments to the AWU.
“I want to put this to you: in or about 2008, Mr O’Keeffe (of the Victorian Jockeys Association) had a conversation with you whereby he said, ‘Look, you really need to be compensated in some way for all the work that you have been doing and has been done by your predecessor, Mr Shorten, for the Jockeys Association’.
“You then said, ‘Look, I won’t accept any money for doing what I do, but you could make a payment to the AWU in return for the services that I provide,’ or words to that effect. Would you agree that that conversation took place or could have taken place?”
Blandthorn: “Yes. Yes.”
The government has described the arrangement as a “dubious deal’’ which enabled the AWU to add the names of netballers and jockeys to its membership list.
A spokesman for Mr Shorten said he was proud of the work he did on behalf of jockeys and netballers in improving their pay and conditions.
“In particular, he is proud to have contributed to promoting and professionalising women’s sport,” he said.
“The Liberals’ royal commissioner made no adverse findings against Mr Shorten. The Liberal government are desperate to accept every outcome of the report except that one.”
Here's a link to The Australian's coverage of the Shorten developments
Australian Workers Union ‘scams’ haunt Bill Shorten
Bill Shorten has been challenged to reveal any connection to allegations besetting his former union of fraudulent transactions and scams that boosted its political power by signing up phantom members.
The Opposition Leader came under pressure in parliament for the second day running to reveal any knowledge of claims before the trade union royal commission that the Australian Workers Union was involved in sweetheart deals, ghost memberships and fraudulent accounting. Mr Shorten has refused to comment on events before the commission, saying he will not “provide a running commentary’’.
Yesterday the commission heard fresh claims that Mr Shorten’s former union, led at the time by his political and industrial ally Cesar Melhem, doctored invoices to help conceal the fact that $225,000 was used to bolster memberships and the AWU’s influence on Labor’s conference.
Leader of the House Christopher Pyne increased the pressure for a full explanation from Mr Shorten, as he urged Labor to pass key industrial relations legislation through the Senate to ensure greater financial accountability of unions and other registered organisations. “The Leader of the Opposition needs to explain what he knew about these matters, and when,” he said.
Mr Pyne mocked the ALP leader, who was AWU Victorian secretary from 1998 to 2006, over a deal he announced that signed up netballers as union members without their knowledge.
“The Australian Workers Union, led by Cesar Melhem and the state secretary at the time — who was Mr Shorten, state secretary in 2005 — signed up the entire membership of the Australian Netball Players Association, and then sent them an invoice for $9000, without their knowledge, to boost their (the AWU’s) membership numbers so that they would get more votes inside the ALP for preselections … You can just imagine the poor old netball mums turning up on Saturday morning to play, expecting to get their goal shooter bib or their goal defence bib and instead getting a high-vis vest and a hard hat.”
It's quite a long story - you'll need to go to The Australian to read it all - here's an extract about Shorten's evidence to the Cole Royal Commission.
The pressure comes amid evidence in the commission that Mr Shorten had a relationship with the boss of a builder, Winslow Constructions, that had a long-time practice of paying union dues to the AWU on its workers’ behalf.
Winslow founder Dino Strano told the commission this week his firm had had an association with the AWU and its leadership over several decades. Mr Shorten was a signatory to the 2004 enterprise bargaining agreement with Winslow Constructors.
“There’s been a variety of people from, you know, Bill Shorten, Peter Smoljko, Cesar and various organisers over the years,’’ Mr Strano said when asked who he dealt with. “At the end of the day, we paid the membership, the guys got the benefit of being well-represented and it enabled our company to have a certain degree of stability.”
Mr Shorten testified at the Cole royal commission into unions in 2002 that the AWU did not receive money from employers to be deployed on memberships.