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Victoria's 'Big Build' Scandal: A Comprehensive Update on Alleged Corruption, Government Response, and Ongoing Investigations

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The Big Build Scandal: A Crisis in Victoria's Infrastructure

A series of interconnected reports, investigations, and arrests have detailed extensive allegations of organized crime infiltration, corruption, and financial misconduct within Victoria's $100 billion "Big Build" infrastructure program.

The scandal involves the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU), multiple labour-hire companies, subcontractors, and individuals with alleged links to outlaw motorcycle gangs (OMCGs) and organized crime figures. Below is a consolidation of these reports, detailing the allegations, the government's response, and the ongoing investigations.

Key Allegations and Findings

1. A Landmark Report on Systemic Corruption

An independent report by integrity expert Geoffrey Watson, SC, titled "Rotting from the Top," was presented to the Queensland Commission of Inquiry into the CFMEU. The report alleges that the Victorian branch of the CFMEU, under the leadership of former secretary John Setka, was transformed into an enabler of corruption and organized crime.

Key Allegations in the Watson Report:

  • Systemic Corruption: The report alleges that major infrastructure projects hosted and enabled systemic corruption, drug trafficking, bikie gang activity, and the sexual exploitation of women.
  • Cost to Taxpayers: The report estimates that CFMEU actions and related corruption added approximately 15% to the cost of the Big Build program, or roughly $15 billion. This figure was corroborated by Fair Work Commission general manager Murray Furlong, who stated it was consistent with information he had received. The report alleges that a significant portion of this amount was funneled directly to criminals and organized crime groups.
  • "Ghost" Shifts and Kickbacks: Union delegates and health and safety officials allegedly operated a "ghost" shift scheme, receiving payments from multiple firms simultaneously. Labour-hire firms reportedly paid large bribes ($250,000 to $1 million) to secure CFMEU-backed Enterprise Bargaining Agreements (EBAs).
  • Job Payments: Some workers alleged they had to pay union officials or delegates cash bribes (e.g., $500-$1,000) to secure and retain high-paying jobs on Big Build sites.
  • Underworld Influence: The report details the infiltration of figures like gangland figure Mick Gatto, described as a "fixer" earning over $5 million annually, and a hidden owner of the M-Group labour hire firm. Mr. Gatto has denied all wrongdoing.
  • Individuals Named: The report names over 25 individuals with specific allegations, including:
    • John Setka (Former CFMEU Official): Allegedly admitted to being offered hundreds of thousands of dollars in bribes.
    • Joel Leavitt: Described as "a brutal criminal with a bad criminal record" and a patched bikie who was appointed a health and safety representative.
    • Joe Myles (Senior Union Leader): Allegedly used threats and industrial stoppages to drive rival unions off sites.
    • Faruk Orman: Allegedly awarded EBAs in exchange for payments, including $250,000 for one agreement.
    • Toby Mitchell (Former Bandido Bikie): Allegedly worked for a labour hire company, MC Labour, helping to recruit workers with a "violent set of skills."

2. Removal of Report Sections

CFMEU administrator Mark Irving, KC, directed the removal of two key chapters from the Watson report before its public release. These removed sections allegedly concluded that the Victorian Labor government was aware of the corruption and organized crime on infrastructure projects but failed to act.

  • Mr. Irving's rationale for the removal: He stated he was "not satisfied that they were well-founded or properly tested."
  • Mr. Watson's response: He confirmed the sections were "removed" and expressed anger at the order, maintaining the chapters were essential.

Government Response and Premier Allan's Stance

Victorian Premier Jacinta Allan, who oversaw the Big Build as Transport Infrastructure Minister before becoming Premier, has faced significant scrutiny and has taken a multi-pronged approach in her response.

Premier Allan's Actions and Statements

  • Referral to Authorities: In July 2024, Ms. Allan referred allegations of misconduct to the Independent Broad-based Anti-corruption Commission (IBAC), Victoria Police, and the Fair Work Commission.
  • Disputed Report's $15 Billion Estimate: Ms. Allan has repeatedly dismissed the $15 billion estimate as "untested," "not well-founded," and "unsubstantiated." She has stated these claims "don't stack up" and "undermine the work of the federal government-appointed administrator."
  • Rejection of a Royal Commission: Ms. Allan has firmly rejected calls for a royal commission, stating that existing bodies are sufficient and that a royal commission would delay action. She has suggested the opposition's call is aimed at reducing workers' wages.
  • Acknowledgment of "Rotten Culture": Ms. Allan has described the allegations as "absolutely sickening," "disgusting," and "deeply concerning," acknowledging a "rotten culture" on Big Build sites.
  • Defense of Her Actions: Ms. Allan has stated that any misconduct allegations presented to her during her tenure were referred to authorities. She claims she was unaware of the full extent of CFMEU-related problems until a mid-2024 media investigation.

Government Actions

  • Taskforce Hawk: Victoria Police established Taskforce Hawk to investigate organized crime and corruption in the construction sector. As of recent reports, the taskforce has laid over 70 charges against multiple individuals and made 22 arrests for 72 offenses since July 2024.
  • Labour Hire Authority Actions: The Labour Hire Authority (LHA) has taken significant action, including cancelling over 120 construction business licenses. Notable actions include the revocation of licenses for Women in Construction and 24-7 Personnel.
  • New Mandatory Register: Transport Infrastructure Minister Gabrielle Williams announced a new mandatory register for industrial relations consultants and mediators on Big Build sites.
  • Legislative Changes: The government has toughened anti-bikie laws and commissioned an independent review to strengthen agencies responding to criminal behavior on sites.

Roles and Responses of Key Individuals

  • Geoffrey Watson, SC: The integrity expert whose report is a core document in the scandal. He has estimated a $15 billion cost to taxpayers and has repeatedly called for an independent investigation with coercive powers. He has been publicly criticized by Labor ministers, who referred to his work as "florid ramblings."
  • Joel Leavitt: A former CFMEU health and safety official and alleged patched member of the Bandidos OMCG. He was arrested in a blackmail probe, charged with demanding $663,000 from a man in January 2026. His court appearance revealed bail conditions concerns and alleged bail breaches.
  • Mick Gatto: A gangland figure identified in the Watson report as a "fixer" who received millions of dollars in payments from Big Build subcontractors. He has denied all wrongdoing and initiated defamation action against Mr. Watson.
  • Robert Redlich (Former IBAC Commissioner): A former IBAC commissioner who has supported calls for a royal commission, describing the situation as "an unprecedented historic scandal."
  • Deborah Glass (Former Victorian Ombudsman): An integrity figure who has also called for a royal commission, stating the government has been "careless with public money."
  • Kevin Devlin (Former VIDA Chief): The former head of the Victorian Infrastructure Delivery Authority who had privately warned Premier Allan about concerns. As a director of Roads Australia, he contributed to an estimate suggesting industrial lawlessness contributed up to 30% cost blowouts.

Investigations and Police Actions

Key Investigative Bodies and Their Status

  • Taskforce Hawk (Victoria Police): Actively investigating and making arrests. The taskforce has stated that organized crime has infiltrated the Big Build, but that certain misconduct is not captured by current criminal laws, calling for legislative change.
  • Australian Federal Police (AFP) - Operation Rye: An AFP investigation into building industry corruption is active. AFP officers have warned that witness intimidation and a culture of fear are hindering their work.
  • Queensland Commission of Inquiry: A royal commission-style probe into the CFMEU is active, with the power to compel witnesses and documents.

Charges and Arrests

  • John Setka (Former CFMEU Boss): Charged with multiple counts of using a communication device to menace, harass, and offend, related to alleged text messages and emails. He has also been charged with alleged bail violations.
  • Joel Leavitt: Charged with blackmail related to an alleged $663,000 extortion plot.
  • Bernard Kearney (Owner of B K Labour): Charged with fraud related to allegedly fake Big Build invoices.
  • Schindler Group Employees: Three employees were removed after an internal investigation confirmed a $6 million fraud on the Metro Tunnel project.

Non-Reporting of a Major Fraud

A report alleged that Victoria Police were not formally informed by government officials about a $6 million fraud on the Metro Tunnel project involving the Swiss company Schindler. The fraud was uncovered by internal investigations, and the company repaid the funds. Police stated they were not formally alerted.

Political Responses and Proposed Reforms

Calls for a Royal Commission

Several groups and individuals have called for a royal commission, including:

  • Former IBAC Commissioner Robert Redlich
  • Former Victorian Ombudsman Deborah Glass
  • Integrity expert Geoffrey Watson
  • The Victorian Opposition, led by Jess Wilson
  • Labor's own backbench MPs (some of whom have expressed support)

Proposed Reforms

  • Expanded IBAC Powers (Support from Greens, Crossbench, and some Labor MPs):
    • "Follow-the-money" powers: To trace public funds through private contractors and subcontractors.
    • Broader definition of corrupt conduct: To include serious disciplinary offenses and breaches of public trust.
    • Increased use of public hearings.
  • Victorian Opposition's Proposed Policies:
    • US-style anti-racketeering laws
    • Asset Seizure Taskforce (with AFP and ATO)
    • Mandatory criminal history checks for individuals working on major government projects.
    • New Construction Enforcement Authority.
  • Premier Allan's considered reforms:
    • The Premier is considering giving IBAC expanded powers, including the "follow-the-money" powers and broader public hearing use.
  • IBAC Commissioner Victoria Elliott:
    • Has called for stronger powers, including the ability to investigate misconduct that does not meet the criminal offence threshold and "follow-the-dollar" powers.

The ALP Response

  • Premier Allan's Position: Rejects a royal commission; supports existing police and regulatory actions; dismisses the $15 billion estimate.
  • Labor MPs: Some have publicly expressed concern about the government's handling of the issue and have advocated for the Premier to consider a royal commission and stronger IBAC powers.
  • Labor Ministers: Have publicly criticized the credibility of Geoffrey Watson, SC.

This article is a consolidation of public reports and does not represent findings of guilt. All individuals named are presumed innocent unless proven otherwise in a court of law.