Standover men and convicted terrorists, mingling with unions and corrupt politicians, have hollowed out faith in institutions. By Mike Seccombe.

Confidence tricksters dominate unions royal commission, ICAC

Douglas Westerway is apparently a trusting sort of bloke. Even so, the former policeman was a little concerned when his potential business partner, George Alex, was named in newspaper articles about a murder.

The killing happened on January 15, 2013. A leading member of the Hell’s Angels motorcycle gang, Zeljko “Steven” Mitrovic, 45, was shot at Wetherill Park, in Sydney’s south-west, after arguing with a group of men sent to collect a debt.

Reports of the murder mentioned that police were investigating a number of aspects of Mitrovic’s life and associations, including a caveat that had been placed on his home – later withdrawn – by City Nominees, a company run by the family of George Alex, who was Mitrovic’s former business partner.

Westerway told the Royal Commission into Trade Union Governance and Corruption this week that he had known about the killing. Having been introduced to Alex, he did some research on his future business partner and saw a media report of what had happened to the former business partner. He decided he should raise the matter.

“I said, ‘Obviously, it’s, you know, fairly confronting’, and he said he used to have some business dealings with him but, you know, that was it and, obviously, you know, the murder was nothing to do with him and, you know, a bit disappointed the paper even raised it,” he told counsel assisting the commission Jeremy Stoljar, SC. 

“What happened after that?” asked Stoljar. “Did you agree to start working?” 

“Yes. He made an offer to me of a job and I accepted the offer.”

And so the ex-copper-turned-builder took Alex on trust and joined his scaffolding and labour hire business some time in late February or early March last year, in a “fairly vague” sort of capacity, bearing “every title under the sun –project manager, general manager, CEO, you know, whatever they chose”.

In so doing he became enmeshed in a web of related dodgy enterprises and, for a time, was a director of one. And he met people most neutrally described as colourful: among them several pretty heavy convicted criminals. The most notable of these was Khaled Sharrouf, an Islamist extremist – chronically mentally ill, according to the psychiatric evidence – who had served four years in prison for his involvement in a 2005 terrorist plot.

Sharrouf was not as infamous then as he is now. He was just another piece of muscle in the orbit of George Alex. Later he was to draw wider attention: first after he managed to flee Australia for Syria, using his brother’s passport last December; then just a few weeks ago when he bobbed up, pictured with his seven-year-old son and a severed human head.

But Westerway found more immediate problems than a crazed past and future jihadist. By May 2012 he was concerned about the company’s finances. People weren’t getting paid.

And then, in June, another murder. Vasko Boskovski was shot when he answered the door to his house. Westerway told the commission he’d met Boskovski, along with Khaled Sharrouf and another convicted crim, Bill Fatrouni, at Alex’s house. 

This killing, Westerway told the commission, “obviously gave me serious reservations about being there”.

But the trusting former senior constable stayed on. Things got worse. 

In late October 2013, Westerway was bashed by Joe Antoun, another close associate of Alex with an extensive criminal history, after refusing to give him money from the business. That resulted in two perforated eardrums and a trip to hospital.

Not long after that, on December 16, Antoun himself was murdered, shot multiple times when he answered his front door.

Media reports at the time suggested the list of potential suspects was long. Antoun, like his predeceased fellow debt collectors Mitrovic and Boskovski, was widely hated.

Westerway told the commission he decided to get out of the business “pretty much after December”.

He explained: “I think everything that had been happening, you know, people around you being murdered, it’s not a comfortable place to work.”

Not only was this answer inaccurate – documentary evidence showed he stuck around for months after that, disbursing money – it must rate as one of the understatements of the year.

Uncomfortable? You couldn’t make up a weirder, scarier cast of characters than those whom the former detective senior constable associated with: outlaw bikies, former armed robbers, standover men, at least one bona fide terrorist.

And did we mention the mother-in-law of the terrorist, Karen Nettleton, who did the accounts?

Then there was the cage fighter, Jim Kendrovski, now an inmate of Parklea jail in north-western Sydney (firearms offences), who was assaulted in prison on Friday last week, apparently as a warning over what he might say in evidence.

That is an inference, however; when pressed to talk about the reason for his bashing, Kendrovski demurred on the basis that: “I have a wife and three kids outside on their own and I just can’t comment on it.”

And central to it all, George Alex, the undischarged bankrupt who, as Jeremy Stoljar outlined in his opening statement to the commission, had over the past decade used “no less than four different companies called ‘Active’ to run a labour hire business”.

Each of them had in turn failed.

“As for the scaffolding business, it also failed and then rose up again under a new company,” Stoljar said.

And yet the relevant union, the Construction, Forestry, Mining and Energy Union (CFMEU) negotiated an enterprise bargaining agreement with each of the successor companies.

“Why,” asked counsel, “has the CFMEU continued to award EBAs to Mr Alex’s companies given the repeated failures of his businesses, his ongoing publicised connections with criminal identities, and the labour hire nature of his business to which the union is opposed?

“Among other things, the commission is investigating whether Mr Alex and others associated with the Active and Elite businesses have made payments to or conferred other benefits on certain union officials. 

“To take and receive such payments or benefits would be unlawful and a breach of the union’s professional standards.”

That is why former police officer Westerway and prisoner Kendrovski, among others connected with the various related companies, were summonsed to reluctantly give evidence: to establish what links there might have been between the union and the companies.

Their evidence was that they had repeatedly encountered CFMEU officials, NSW secretary Brian Parker and organiser Darren Greenfield, at Alex’s home. Kendrovski reckoned he saw one or other of the two union men there about once a month.

The commission was particularly interested in the accounts of the group of companies, which recorded weekly payments of $2500 as going to the union.

Both men, and several other witnesses, attested to being aware of the payments, but none had actually seen money handed over. The payments, if they were made, were made through an intermediary, Joe Antoun. And Joe Antoun is dead.

Another witness, union delegate Jose “Mario” Barrios spoke of receiving a threatening phone call from Alex after he expressed his concerns about the union’s dealings with one of the Alex companies. 

He said he raised the matter first with CFMEU NSW president Rita Mallia, who told him: “You have to talk to Brian Parker. It’s got nothing to do with me.”

Later the same day, he got a call from Parker, who raised the matter. 

“I said, ‘Brian, I got a suspicion that George Alex is connected to this company. Why are we even considering entertaining them about an EBA?’”

Parker assured him he had checked the company out and that “George Alex has got nothing to do with this company”.

But the very next day, August 20, Barrios received a phone call from Alex himself, who demanded: “I want to come and pay a visit and I want to know why you’re talking so much shit about me.”

There never was a visit; Barrios made a police statement. He received two other calls from Alex, but did not answer either of them. It was the first contact he’d ever had with the man. He had no idea how Alex had got his number.

1 . ‘Disturbing evidence’

All of this damning evidence came out on Monday this week. Subsequently there was more: about an instruction to union staff and officers to delete their emails, made just weeks after the commission issued the union with an order to produce documents, including electronic records.

And there was evidence about a couple of incidents of physical and verbal intimidation of Fair Work building inspectors by CFMEU officials.

Nothing that followed was as arresting or scary as the evidence of Westerway and Kendrovski, though. 

In fairness, it should be noted that CFMEU national construction secretary Dave Noonan later issued a statement protesting the CFMEU’s innocence.

There had been “no credible evidence … that the union received any corrupt payments from individuals or businesses associated with George Alex”, he said.

Noonan noted the “disturbing evidence of criminality among employers” illustrated only “the CFMEU’s long-held concerns about the practices of labour hire companies in the construction industry”.

Union officials were forced to deal with unscrupulous operators because the various relevant official bodies – the Fair Work Commission, Australian Securities and Investments Commission and tax office – had not done enough to prevent the “phoenixing” of companies.

And the Fair Work Commission had done nothing to recover workers’ entitlements from collapsed companies, whereas the union had recovered more than $1 million from companies associated with Alex over the past two years.

“If the royal commission was serious about cleaning up the construction industry, it would delivera recommendation to license labour hire operators,” said Noonan.

That’s probably fair enough. But still it all looked pretty bad for the union.

And that would no doubt have pleased the federal government, which set up the royal commission.

For there should be no doubt the Abbott government was as much concerned with damaging the Labor Party via its affiliations with the union movement as it was about cleaning up corruption.

And until this week the royal commission had been less than scintillating.

That’s not to say it had not turned up some interesting stuff about union slush funds and dodgy financial dealings by union leaders. Not to mention the personal life of the Health Services Union’s Kathy Jackson.

The unions royal commission was not a dud, like the other politically motivated royal commission the government set up into the previous government’s home insulation scheme. That colossal waste of time and $25 million revealed nothing that had not come out in eight previous inquiries.

Still, the unions royal commission was not, until Monday, nearly as attention-grabbing as a couple of other public inquiries under way. Like the royal commission into child sexual abuse or the goings on at the NSW Independent Commission Against Corruption.

2 . ICAC hearings

Coincidentally, ICAC is currently examining alleged corrupt dealings relating to the building industry; not to the people who do the actual construction, but the people who propose the developments and their political influence.

While its hearings this week might not have gone to matters as sensational as murders and bashings, they go closer to the heart of public life. And the evidence this week was bipartisan in its damage.

The main focus on the Labor side was on the influence of coal magnate Nathan Tinkler, his development company Buildev, and the proposal to build a new coal loading facility in Newcastle.

It was, in the words of Sam Crosby, senior ports policy adviser to former NSW treasurer Eric Roozendaal, a “dog of a project”.

Yet, as Crosby told the commission a couple of weeks back: “Like Lazarus, this thing just kept climbing up out of the ground.”

This week, we got a better idea of why. First up, we heard from Joe Tripodi, the former Labor right-wing powerbroker, who has already been found corrupt by a previous ICAC investigation.

Tripodi admitted involvement in writing a pamphlet, funded by Buildev, that attacked one of his own MPs, the member for Newcastle, Jodi McKay.

McKay was a strong advocate of an alternative proposal, preferred by the government, for a container terminal. In previous evidence, she claimed that Tinkler offered her a bribe if she would switch her support to his proposal.

Tripodi has also been fingered as the person who passed a confidential treasury document, damaging to the container port proposal, to a senior Buildev executive, Darren Williams.

On Monday, Tripodi could not recall if he got the document from Roozendaal.

ICAC is in possession of text messages from Williams, saying Tripodi was “panicky” after the document was leaked to the Newcastle Herald.

Tripodi could not recall being “panicky” but conceded he might have expressed disapproval at Buildev leaking a government document. He said his memory was bad; he had, for example forgotten that he had been flown to Newcastle in a Buildev helicopter to discuss the coal loader proposal.

When former treasurer Roozendaal came to give evidence, his memory was better, at least about the treasury report.

Yes he had seen it. Yes he was aware that Tripodi was feeding confidential information to Buildev. He was “content” about that. “I didn’t see a problem with it,” he said.

He denied having given the report to Tripodi, but conceded he had acted to impede the alternative port proposal, largely on the basis of advice he received from Tripodi. But when the questioning turned to a phone call he’d had from McKay, agitated about the campaign against her and for the coal loader, Roozendaal’s memory was less than precise. 

He was asked: “Do you remember taking the phone aside and speaking softly into it at one stage and saying, ‘Haven’t you spoken to Tinkler?’”

“No, not, I don’t, not, not specifically, no,” said Roozendaal.

But he accepted he might have said it, in the context of the conversation.

“…she was, ah, particularly agitated and emotional and, um, was making all sorts of accusations as to some sort of conspiracy in relation to the container terminal announcement and the coal loader and suggesting that I was in some sort of conspiracy in relation to those.”

He also agreed that he urged McKay to be careful of making such allegations over the phone, in case the calls were being intercepted.

After the uncomfortable performances of the Labor factional heavyweights, it was the turn of one of the Liberal Party’s NSW powerbrokers, former energy minister Chris Hartcher, to answer questions about improper dealings with Tinkler’s business.

Hartcher was facing allegations that his office had been the conduit for $53,000 in illegal donations. The suggestion is that the money was “washed” through a federal Liberal party entity, the Free Enterprise Foundation, and channelled back to the state at the last election.

NSW legislation bans political donations from property developers, but federal electoral law does not.

The money allegedly went to the campaigns of two Liberal candidates, former Newcastle Liberal MP Tim Owen, who has resigned from politics as a result of the ICAC investigation, and the suspended MP for the Western Sydney seat of Londonderry, Bart Bassett.

Hartcher repeatedly said he was “not aware” of the money being sent from his office.

An email authored by Tim Owen’s campaign manager that named Hartcher as having sent a cheque to Liberal Party head office was a “puzzle” to him, he said.

Worse was to come for the Libs.

Bart Bassett gave evidence that he was unaware of any illegal donations from Buildev. He deliberately kept away from the funding side of his campaign, he said, trusting others to look after the money.

He specifically denied having ever sought “any bribe, benefit or donation from Buildev”.

The next witness was a Buildev project manager, Mark Regent, who flatly contradicted that. He said Bassett had come to him, seeking campaign money. 

Having initially said Buildev couldn’t help, Regent was persuaded to put the plea to Darren Williams. He did and later got a response indicating “something had happened”.

Later still, said Regent, he got a call from the Liberal MP, asking that he pass on thanks to Williams.

The allegation is that Bassett had 18,000 reasons to be grateful.

And it got worse still.

Yet another Liberal MP, Garry Edwards, gave evidence that he had been given an envelope of cash by property developer and former mayor of Newcastle Jeff McCloy in the lead up to the 2011 election.

But, Edwards said, he didn’t keep it. Without even looking inside, he said, he passed it on to party treasurer Max Newton, who has since died.

It was a bit like the situation with the CFMEU; the money trail appeared to end with the dead guy.

Except this time it didn’t. No sooner had Edwards left the witness box than a Baird government staffer, John Macgowan, entered it to say this was a lie.

Macgowan told the commission that on August 12, the same day as Tim Owen quit politics after having been caught out lying about his receipt of an envelope of cash from McCloy, Edwards came to see him with a plan by which the illegal donation could be denied.

It was simple: say the envelope, contents unknown, had been handed to the late Max Newton. Being dead, he could not give evidence to dispute that version of events.

Edwards later returned to the witness box to deny he had, as counsel assisting ICAC Geoffrey Watson, SC, put it, set out to tell “a little bit of the truth mixed with a bunch of lies to fool ICAC”.

At the time of writing, the former Liberal police minister Mike Gallacher, who previous evidence has suggested was close to Tinkler and the one who orchestrated illegal Buildev donations, was still giving evidence about his connections.

3 . Cynicism and despair

So, where does all this lead us, other than to the conclusion that both sides of politics are sullied by their connections?

Sadly, it leads us to cynicism, if not despair.

Recently the Australian National University released the results of a survey of what Australians thought about their governance. The poll of 1388 people was conducted in late June and early July. It compared data going back to 2001.

Only 56 per cent of those surveyed believed their vote made a difference, down from 70 per cent in 1996. An all-time low of only 43 per cent believed it made a difference to who was in power.

Overall satisfaction with democracy was at 72 per cent, which is not bad by international standards.

But, says the ANU political science professor Ian McAllister, the trend is bad.

“About 10 years ago, we had the highest levels of satisfaction with democracy in the world, second only to Denmark.

“Now we’re going down, among the pack. Interestingly, the data shows confidence in other institutions, like the defence forces, police forces, banks, universities have all gone up, in some cases quite significantly – 15 or 18 per cent. The ones that had not were trade unions and politicians, which are at the bottom.”

Support for both those institutions stood at 6 per cent.

“I would have thought,” says McAllister, “that’s a cause for concern.”

It may be a concern. But it’s certainly no mystery.

This article was first published in the print edition of The Saturday Paper on Sep 6, 2014 as "Confidence tricksters".

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Mike Seccombe is The Saturday Paper’s national correspondent.