A scathing report has laid bare a decade of systemic corruption, criminal infiltration, and brazen extortion within the Victorian construction division of the Construction, Forestry, and Maritime Employees Union (CFMEU), revealing how the state’s signature $100 billion Big Build infrastructure program became a feeding trough for organised crime, costing taxpayers an estimated $15 billion (that is 15,000 million dollars).
The report, titled “Rotting from the Top: The CFMEU in Victoria During the Setka Era,” was authored by barrister Geoffrey Watson SC and tendered to Queensland’s Commission of Inquiry into the CFMEU. It paints a grim picture of a union that devolved into what Watson describes as a “violent, hateful, greedy rabble” and a “crime syndicate” under the leadership of John Setka from 2012 to 2024 .
From systematic extortion rackets to the infiltration of outlaw motorcycle gangs, the report details a litany of abuses that turned government-funded construction sites into criminal enterprises. Here are the top 10 most audacious rorts carried out by the CFMEU Victoria on the Big Build over the last 12 years.
The Top 10 CFMEU Rorts on Victoria’s Big Build
1. The $100 “Charitable Donation” Weekend Shift Racket
Topping the list is a scheme of pure extortion disguised as charity. On the Melbourne Underground Rail Loop project, CFMEU delegates who organised weekend rosters required workers to “donate” $100 in cash for a “concocted charitable purpose” to be allocated a lucrative shift. With as many as 100 men working a weekend night shift, this racket could net the organisers $10,000 in cash per shift. The report, citing a witness, confirms the charitable purpose was a complete fabrication .
2. The Black Market EBA Scheme: “Everybody Gets to Eat”
The report exposes a black market for Enterprise Bargaining Agreements (EBAs), which are essential for any company wanting to work on a Big Build site. The CFMEU controlled these “licences to print money.” In a secretly recorded conversation, union-linked figure Harry Korras explained the process: “There’s a fee to get an EBA. I think the upfront fee is cash… And everybody gets to eat.” The going rate was between $100,000 and $250,000 per EBA. In one case, Mick Gatto’s associate Faruk Orman secured an EBA for a company in just three days—a process that normally takes months .
3. Ghost Shifts: Double-Dipping on Taxpayer Money
One of the most straightforward and fraudulent schemes involved “ghost shifts.” Union delegates would arrange to be paid twice for the same shift—once by a labour hire company and a second time by the primary contractor. This systematic double-dipping was funded entirely by the Victorian taxpayer .
4. Rail Occupation (OCCO) Extortion
The CFMEU weaponised time-sensitive rail occupations, where builders faced crippling financial penalties for delays, often thousands of dollars per minute. The union would demand triple or even quadruple pay for workers during these periods. An unskilled labourer could earn over $15,000 in a single week. The union would provide lists of unnecessary workers—friends and family—who had to be employed, or the site would be shut down .
5. Capturing the $1 Billion Labour Hire Industry
The labour hire industry on the Big Build, worth over $1 billion annually, was systematically corrupted. CFMEU officials showed blatant favouritism, directing lucrative contracts to specific companies. John Setka and John Perkovic assisted Top Up Labour, while Joe Myles favoured BK Labour. One contractor was recorded admitting, “I’ve paid [an official] 800 grand to get this job, so don’t stuff it up” .
6. Jobs for Bikies and Killers
The report details the shocking infiltration of outlaw motorcycle gangs (OMCGs) into the union. The CFMEU forced contractors to employ convicted killers, drug dealers, and violent bikies as delegates and health and safety representatives, often within days of them joining the union and with no qualifications. These OMCGs then turned government building sites into drug distribution centres. Watson notes, “Picture 200 or more men aged between 18 and 30, each earning over well over $100,000, confined within the area of a single building site – that is a drug dealer’s dream” .
7. Mick Gatto’s Phony Aboriginal Business
Underworld figure Mick Gatto established a company called Jarrah Resources Management, presenting it as an Indigenous-owned business to exploit social procurement programs. Despite Gatto’s ownership being an open secret, the company was awarded favored status on government projects before it was eventually liquidated. This scheme corrupted a framework designed to support First Nations people .
8. The Hawthorn East Bashing Cover-Up
In a sickening display of betrayal, the CFMEU leadership covered up a brutal assault on two of their own organisers. After the organisers were bashed by a group of thugs, the union executive, including John Setka, negotiated a $200,000 “compensation” payment with the attackers’ representative, Mick Gatto. The money was pocketed by the executive and never reached the injured men. Setka then told one of the victims not to go to the police and privately derided him for his resulting PTSD .
9. John Perkovic’s Corruption Empire
Senior CFMEU organiser John Perkovic amassed over $1 million in corrupt benefits from contractors he favored. This included a new house built by a corrupt ex-cop with no clear payment trail, a free block of land worth $550,000 transferred to his student daughter, a $100,000+ vintage Ford Falcon GT he was “storing” for a contractor, and a $100,000+ Range Rover his wife drove that was “owned” by another contractor .
10. The Unwanted Delegates Racket
The union systematically forced contractors to hire unnecessary and unwanted delegates, who were often friends and family of officials. These positions were so lucrative that unskilled workers could earn over $100,000 a year, with some making $15,000 in a week for jobs that sometimes didn’t require them to even show up .
A System in Decay
The Watson Report is a damning indictment of a union that, in the author’s words, became “rotting from the top.” The alleged corruption was not just a case of a few bad apples but a systemic decay that permeated the highest levels of the CFMEU’s Victorian construction branch. The report alleges that the Victorian Labor government was aware of the corruption and its multi-billion-dollar impact on taxpayers but turned a blind eye .
The full, unredacted report has now been referred to state and federal police and other relevant authorities. As the dust settles, Victorians are left to wonder how a union, meant to protect workers, became a vehicle for such staggering levels of crime and corruption, all while building the state’s most iconic projects.