Back
Politics

Report and Scrutiny Detail Extensive Allegations of Corruption and Organized Crime Infiltration in Victoria's "Big Build" Infrastructure Program

Generated on: Last updated: 47 sources
View source

Victoria's "Big Build" Corruption Scandal: A Crisis of Oversight

A series of reports, legal proceedings, and disclosures have detailed allegations of systemic corruption, organized crime infiltration, bribery, and cost blowouts within Victoria's "Big Build" infrastructure program.

The allegations have intensified scrutiny of the Victorian Labor government's oversight, the role of the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU), and the effectiveness of law enforcement and anti-corruption bodies. Multiple official reports, media investigations, and political responses have contributed to an ongoing public debate about the scale of the problem and the appropriate response.

Allegations of Corruption and Organized Crime

The Watson Report

Corruption investigator Geoffrey Watson, SC, was appointed by the CFMEU administrator in 2024 to probe allegations of crime and corruption. His report, titled "Rotting from the Top," alleged widespread corrupt conduct within the CFMEU's Victorian branch. Key findings included allegations that:

  • The union, under the leadership of John Setka, enabled systemic corruption, drug trafficking, bikie gang activity, and the sexual exploitation of women on major projects.
  • Patched members of outlaw motorcycle gangs, including the Bandidos, Rebels, Hells Angels, and Mongols, were employed as union delegates and health and safety officials.
  • Workers paid bribes to union officials to secure jobs, and "ghost shift" schemes involved union representatives being paid by multiple firms simultaneously.
  • Labour hire firms paid large sums to secure CFMEU Enterprise Bargaining Agreements (EBAs) necessary for winning contracts.
  • Gangland figure Mick Gatto was described as a "fixer" earning millions annually from builders.

The report estimated that corrupt conduct added approximately 15 percent to project costs, providing a "very rough" estimate of $15 billion in costs to Victorian taxpayers.

Findings Removed from the Watson Report

CFMEU administrator Mark Irving, KC, directed the removal of specific sections from Watson's report prior to its public release. These removed chapters reportedly concluded that the Victorian Labor government was aware of corruption and organized crime on the "Big Build" projects and chose not to act, fearing industrial action that could halt construction.

Irving stated he removed the sections because he was "not satisfied that they were well-founded or properly tested." Watson confirmed he was directed to make the changes and maintained the chapters were essential. These removed sections were later released and presented to a Queensland commission of inquiry.

Specific Allegations and Incidents

Donations and Connections to Labor Party

Multiple reports detailed political donations to the Victorian Labor Party from firms subsequently linked to police probes or organized crime figures. These include:

  • B K Labour: A traffic management firm whose owner, Bernard Kearney, was charged with fraud related to allegedly fake Big Build invoices. The firm donated at least $3,264 to Victorian Labor in May 2022.
  • Anthony Ciccone (Cycon Civil and Project Labour Solutions): Donated $3,264 to Victorian Labor in 2022. Ciccone engaged Mick Gatto to assist in a dispute involving his Big Build operations. His co-owned firm employs the wife of a former union boss.
  • CCL: A labour hire firm listed as donating $3,264 to state Labor. Watson's report states that CCL agreed to hire former Bandidos boss Johnny "Two Guns" Walker as a CFMEU health and safety representative while he was serving a manslaughter sentence.
  • Other firms, including one involved in two federal police probes for allegedly bribing a former union boss, also made donations.

A Victorian Labor spokesperson stated that the donations were made prior to the surfacing of the allegations and complied with legal requirements.

Arrests and Charges

  • Joel Leavitt: A former CFMEU official and patched Bandidos member was arrested by Taskforce Hawk in connection with an alleged blackmail incident. He was charged with demanding $663,000 from a man in January 2026. The Watson report alleged Leavitt required payments from prospective employees for jobs and was a "brutal criminal with a bad criminal record."
  • John Setka: The former CFMEU boss was charged by Taskforce Hawk with using a carriage service to menace, harass, or offend administration officials, including Geoffrey Watson. He was also charged with committing offenses while on bail.
  • Taskforce Hawk: Established by Victoria Police in 2025 as an evolution of Operation Hawk, the taskforce has laid over 70 charges against more than 15 individuals in connection with alleged criminal activities in the construction industry.

Fraud and Alleged Gaps in Oversight

  • Metro Tunnel Fraud: An alleged $6 million fraud involving Swiss company Schindler was reportedly not formally reported to police by government officials. Schindler claimed payment for escalator replacements after a flood but, according to a review of CCTV footage, did not replace the damaged equipment. The company admitted the fraud, dismissed employees, and repaid the funds. Taskforce Hawk later opened an investigation after media reports.
  • Firebombings: A series of firebombings targeting construction sites and executives' vehicles have occurred in Victoria and New South Wales. In Sydney, the home of Hansen Yuncken CEO George Bardas was firebombed. The cause of these attacks and their connection to the broader allegations remain under investigation.

Role of Mick Gatto and Organized Crime

Leaked financial records obtained by media outlets indicate that multiple subcontractors on the Big Build made payments to Mick Gatto and his associates from 2020 to 2026. Subcontractors stated they paid Gatto for industrial relations services or mediation to resolve disputes with the CFMEU. Some firms acknowledged they felt they had no choice due to the union's power to block their access to worksites.

Government and Oversight Responses

Premier Jacinta Allan's Actions and Statements

Premier Jacinta Allan has faced repeated questions regarding her knowledge of the alleged corruption when she served as Minister for Transport and Infrastructure. Allan has stated she referred allegations to the Independent Broad-based Anti-corruption Commission (IBAC) in July 2024, as well as to Victoria Police and the Fair Work Commission. She has disputed the $15 billion cost estimate from the Watson report, describing it as untested and unsubstantiated.

Allan has rejected calls for a royal commission, stating that the government is focused on "taking action now" and that previous royal commissions have not resolved such issues. She has defended the government's actions, including the establishment of Taskforce Hawk, the cancellation of construction licenses by the Labour Hire Authority, and the commissioning of an independent review.

IBAC's Jurisdiction and Calls for Reform

IBAC confirmed that it did not investigate Premier Allan's 2024 referral, stating that the matters were outside its remit. Former IBAC commissioner Robert Redlich noted that the government should have been aware of IBAC's jurisdictional limits. The commission has previously requested expanded powers, including "follow-the-dollar" authority to trace public funds through subcontractors and a lower threshold for launching investigations.

In June 2026, Premier Allan announced plans to expand IBAC's powers, including "follow-the-money" authority, a broader definition of corrupt conduct, increased use of public hearings, and digital search capabilities. The government stated the changes would be the most significant overhaul of IBAC since its establishment, but they are not expected to be legislated until after the November 2026 state election. This timeline has been criticized by the opposition and integrity advocates.

Victoria Police and Taskforce Hawk

Victoria Police established Operation Hawk in mid-2024, which evolved into Taskforce Hawk in 2025. The taskforce has investigated organized crime and corruption in the construction industry. Police Minister Anthony Carbines has stated that the taskforce has the resources it needs. Australian Federal Police have warned that witness intimidation is hindering investigations into the building industry.

Labour Hire Authority

The Labour Hire Authority has intensified its regulatory actions, cancelling or refusing to renew licenses for multiple companies, including Women in Construction and 24-7 Personnel, citing "fit and proper person" concerns. The authority has reported significant increases in license cancellations and refusals since gaining new enforcement powers.

Calls for a Royal Commission

The opposition, led by Jess Wilson, has released terms of reference for a proposed royal commission and is advocating for its establishment. The opposition's proposed commission would investigate the extent and cost of misconduct, the flow of taxpayer funds to organized crime, and the government's culpability. Several Labor MPs have also privately expressed support for a royal commission. Former IBAC commissioners Robert Redlich and Stephen O'Bryan, along with former Ombudsman Deborah Glass, have publicly called for a royal commission.

Union and Industry Responses

The CFMEU administrator Mark Irving, KC, has taken actions including dismissing officials and implementing reforms. The administration stated that all individuals named as "bad actors" in the Watson report have been removed. The Electrical Trades Union defended the "Big Build" and disputed the $15 billion corruption claim.

Industry bodies, including the Australian Constructors Association, have advocated for a state-wide construction code and a "fit-and-proper-person" test for union health safety delegates, rather than a royal commission, arguing sufficient evidence already exists for legislative action.