Victorian infrastructure projects, collectively known as the "Big Build," are under scrutiny following extensive allegations of corruption, organized crime infiltration, and misconduct. Multiple reports and investigations have detailed claims of bribery, extortion, drug trafficking, and other illegal activities, primarily involving the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) and associated figures. The revelations have led to police action, internal government reviews, and intensified calls from opposition parties, integrity bodies, and some government MPs for broader inquiries, including a royal commission, and expanded powers for the state's anti-corruption commission.
Overview of Allegations and the Watson Report
An independent inquiry report titled "Rotting from the Top," authored by corruption expert Geoffrey Watson SC, detailed widespread allegations concerning Victoria's major road and rail projects. The report, commissioned by the CFMEU's federal administrator, alleged systemic corruption, drug trafficking, bikie gang activity, and sexual exploitation on government-funded sites. It specifically attributed the CFMEU's alleged role in enabling corruption to the leadership of former union boss John Setka and the scale of the "Big Build" program.
Key allegations from the report included:
- Systemic Corruption and Organized Crime: Allegations that major infrastructure projects enabled corruption, drug trafficking, bikie gang activity, and the sexual exploitation of women. Intelligence reportedly suggested bikie gangs utilized government sites for drug distribution.
- Bribery for Jobs: Reports of workers paying bribes, ranging from $500 to $1000, to union officials and delegates to secure jobs on Big Build sites.
- "Ghost" Shifts and Kickbacks: Allegations that union delegates and health and safety officials were paid by multiple firms simultaneously for "ghost" shifts. Labour hire firms reportedly paid large bribes, some between $250,000 and $1 million, to secure CFMEU Enterprise Bargaining Agreement (EBA) endorsements, which were described as essential for winning Big Build contracts.
- Underworld Figures: The report detailed the alleged involvement of figures such as Mick Gatto, described as a "fixer," and other individuals with alleged links to bikie gangs and organized crime. It suggested Gatto ran a "racket" that extorted money from contractors.
- Infiltration of Union Roles: Individuals with criminal backgrounds, including convicted and alleged killers and bikie members, were allegedly appointed as union delegates and health and safety officials, sometimes lacking relevant experience or qualifications. Specific individuals named in this context include Joel Leavitt, Luke Moloney, Jonny "Two Guns" Walker, Tyrone "Little Ty" Bell, and Muhammed Sayan.
- Sexual Exploitation: Allegations included men paying cash for female workers to strip on-site and a manager reportedly requiring prospective female employees to offer sexual services to secure jobs.
The $15 Billion Cost Estimate and Report Redactions
Watson's report estimated that CFMEU actions increased project costs by approximately 15 percent, leading to a "very rough" estimate of $15 billion in costs to Victorian taxpayers. This estimate was supported by Fair Work Commission general manager Murray Furlong.
However, the CFMEU administrator, Mark Irving KC, removed sections from the report prior to its public release. Irving stated the sections were removed because he "was not satisfied that they were well-founded or properly tested."
Watson confirmed parts of his probe had been "removed" and stated he "was directed to make the changes." The removed material reportedly concluded that the Victorian government was aware of corruption but chose not to act, potentially due to fears of industrial action halting projects. Premier Jacinta Allan has disputed the $15 billion figure, calling it "untested" and unsubstantiated.
Campaign Donations and Affiliated Firms
Victorian Labor received thousands of dollars in donations from firms now subject to police action for suspected corrupt payments or those with alleged links to organized crime figures on state-funded projects. These firms were involved in the Big Build program.
Specific donations and allegations include:
- B K Labour: This traffic management firm, whose owner Bernard Kearney was charged with fraud related to allegedly fake Big Build invoices in December, donated at least $3264 to Victorian Labor in May 2022. Police stated the firm was being probed for alleged "corrupt payments."
- Anthony Ciccone (Cycon Civil and Project Labour Solutions - PLS): Donated $3264 to Victorian Labor in 2022. Ciccone reportedly engaged Mick Gatto for assistance with a dispute related to his Big Build operations. His firm is identified in Watson's report as employing a union delegate with possible Comancheros connections and has a partnership with a firm operated by a former Finks bikie. Ciccone stated he had no recollection of the donation.
- CCL: This Big Build labour hire firm is listed as having given state Labor $3264. Watson's report stated 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.
- Unnamed Firm: An owner of a Big Build business, involved in two ongoing federal police probes for allegedly bribing a former union boss and making suspect payments, donated $5488 to Victorian Labor in 2022.
- Stan Papayianneris's Company: This CFMEU-aligned company donated $3550 to Labor. Papayianneris was previously a business partner of Jadran Delic, described as an "underworld figure." Papayianneris has not been accused of wrongdoing.
A Victorian Labor spokesperson stated that the donations were made prior to the surfacing of these allegations, complied with legal requirements, and were reviewed by the party. Premier Allan stated donations were a party matter and lawfully declared.
Government and Law Enforcement Response
Premier Allan's Actions and Stance
Premier Jacinta Allan stated she took "a number of actions" in response to the allegations. She referred allegations of organized crime and graft on taxpayer-funded projects to Victoria's Independent Broad-based Anti-corruption Commission (IBAC), Victoria Police, and the Fair Work Commission.
Allan defended her initial response, noting that she commissioned an independent review, leading to legislative changes such as bans on organized crime groups from government work sites.
She rejected calls for a royal commission, asserting that previous royal commissions had not effectively resolved such issues and suggesting opposition calls were aimed at reducing workers' wages. Allan also disputed the $15 billion cost estimate, stating it was "not well-tested or properly founded."
IBAC's Jurisdiction and Calls for Expanded Powers
IBAC confirmed it did not investigate Premier Allan’s referral, stating the matters were outside its remit due to jurisdictional limitations. Premier Allan's office was reportedly aware 16 months prior that IBAC lacked the jurisdiction for such investigations.
IBAC Commissioner Victoria Elliott and former commissioners have publicly stated the body requires expanded "follow-the-money" powers to trace public funds through supply chains, as well as a lower threshold for investigations and clearer definitions for "public officer" and "public bodies."
The state government is considering these recommendations, but has not committed to legislative changes. The Greens and Opposition have introduced private member’s bills to legislate these powers.
Police Investigations and Arrests
Victoria Police's Taskforce Hawk, established to address organized crime and union corruption on taxpayer-funded infrastructure projects, has laid 70 charges against 15 individuals.
- Joel Leavitt: A high-ranking Bandido bikie and former CFMEU health and safety official, was arrested in connection with an investigation into alleged extortion. He was charged with blackmail relating to an alleged demand for $663,000. The Watson report described Leavitt as a "brutal criminal" who allegedly required payments for jobs.
- John Setka: The former CFMEU boss was charged with harassment and bail violations related to alleged threats made to an official of the CFMEU administration. He was already facing charges from November by Taskforce Hawk for allegedly using a carriage service to menace or harass administration officials, including Geoffrey Watson SC. Setka denied making threats, stating "People should just toughen up."
Fair Work Commission Complaints
The Fair Work Commission documented over 1000 complaints regarding the CFMEU's conduct on major building projects between July 2024 and mid-October 2025, with 600 allegations specifically related to Victorian construction sites. These complaints include allegations of death threats, bullying, nepotism, "ghost wages," and criminal links among union delegates. The Commission has referred more than 400 matters to various enforcement and regulatory bodies.
Other Incidents and Broader Context
Alleged Metro Tunnel Fraud
Victorian government officials reportedly failed to formally alert police about allegations that employees of Schindler Group stole $6 million from the Metro Tunnel project. The alleged fraud, which did not involve the CFMEU, was discovered after Schindler claimed flood damage and requested additional funds for replacements. Internal investigations confirmed no damaged equipment was replaced, and Schindler subsequently admitted the fraud, dismissed three employees, and repaid the $6 million. Victoria Police stated they were advised of the incident but no formal report was made.
North East Link Allegations
The $26 billion North East Link project is under investigation by its construction consortium, Spark, following affidavits detailing allegations of drug taking and sexually inappropriate behavior on site.
Mick Gatto and Union Connections
Gangland figure Mick Gatto has denied wrongdoing, claiming he is a scapegoat. Reports indicated that front companies allegedly linked to Gatto received payments from Big Build contractors. Prominent Victorian union leaders, Earl Setches (plumbers' union) and Peter Marshall (firefighters' union), were filmed dining with Gatto on a yacht in January. CFMEU administrator Mark Irving introduced rules in October 2024 to prevent union organizers from meeting with Gatto or other industrial mediators.
VIDA Record-Keeping Concerns
A confidential briefing from the Victorian Ombudsman warned that the Victorian Infrastructure Delivery Authority (VIDA), the agency managing the "Big Build" program, is exposed to corruption risks due to inadequate record-keeping and failure to adhere to its own procurement policies.
The Ombudsman referred these concerns to IBAC and the Victorian Auditor-General’s Office.
Political and Industry Landscape
Calls for Royal Commission
Opposition Leader Jess Wilson and shadow attorney-general James Newbury have submitted a referral to IBAC and are advocating for a royal commission into the sector. The Opposition has released proposed terms of reference for a royal commission, including investigations into links between CFMEU misconduct and organized crime, and the Labor government's alleged culpability. Several Victorian Labor MPs have also reportedly raised concerns internally, with some supporting a royal commission or enhanced IBAC powers.
Legislative Reforms and Industry Response
The Victorian Greens plan to introduce draft laws to grant IBAC "follow the dollar" powers and to investigate "grey corruption." The Coalition has proposed US-style anti-racketeering laws, an asset seizure taskforce, expanded IBAC powers, and a new Construction Enforcement Authority. The Australian Constructors Association (ACA) is advocating for a statewide construction code and a "fit-and-proper-person" test for union health and safety delegates, but is not convinced a royal commission is necessary.
The Labour Hire Authority (LHA) has intensified efforts to address corruption, leading to numerous license cancellations and refusals based on new "fit and proper person" definitions.
Labor Caucus Dynamics
Some Labor MPs have expressed concerns about the government's handling of the situation and the potential impact on its reputation. Premier Allan has dismissed internal concerns as "anonymous gossip" and her leadership position is reportedly secure amidst these challenges.