A major corruption investigation into the construction union CFMEU has triggered political shockwaves, after previously undisclosed findings alleged that taxpayer-funded infrastructure projects were infiltrated by organised crime and cost blowouts linked to union misconduct reached an estimated $15 billion.
The allegations emerged after CFMEU administrator Mark Irving, KC, released to The Age previously deleted sections of a report by anti-corruption barrister Geoffrey Watson, SC, following questions about whether politically sensitive material had been removed from the final version.
Watson, a former counsel assisting the Independent Commission Against Corruption, conducted an 18-month probe into corruption and criminal infiltration within the CFMEU. In a brief statement, he confirmed parts of his report were removed and said he had been directed to make changes. Irving’s office said the sections were initially excluded because the administrator was “not satisfied that they were well-founded or properly tested.”
Allegations government ‘knew but did nothing’
The most politically explosive finding alleged that the Victorian government was aware of growing corruption risks linked to CFMEU activity on major infrastructure projects but failed to intervene.
According to Watson’s findings, the government had a duty to monitor project costs and corruption risks but “did nothing about it,” despite evidence of escalating problems. The report suggested officials feared industrial disruption and project shutdowns if they confronted unlawful behaviour.
Watson wrote that government inaction, alongside contractor failures, allowed organised crime figures and bikie-linked operators to become embedded in publicly funded infrastructure projects.
The findings directly contradict longstanding denials by Victorian Premier Jacinta Allan, who has said she was unaware of corruption concerns until media investigations exposed the issue in 2024.
Victoria’s Attorney-General Sonia Kilkenny has defended the government’s actions, saying the Watson report was commissioned federally and the state had taken steps to address corruption, including referring allegations to police and anti-corruption bodies.
Estimated $15 billion cost to taxpayers
Watson’s report estimated that corruption and unlawful conduct increased infrastructure project costs by about 15 per cent, describing the figure as “probably conservative.”
Based on Victoria’s massive infrastructure pipeline, he concluded that CFMEU-related corruption had cost taxpayers approximately $15 billion.
“Much of that $15 billion has been poured directly into the hands of criminals and organised crime gangs,” Watson wrote.
Major projects cited as vulnerable included key components of Victoria’s $100 billion Big Build program, such as the Suburban Rail Loop, the North East Link, the Melbourne Metro Tunnel, and rail line upgrades.
The Big Build is jointly funded by the state and federal governments and represents one of the largest infrastructure programs in Australian history.
Report redactions spark transparency concerns
The release of the deleted sections followed scrutiny from a Queensland Commission of Inquiry examining CFMEU conduct and its impact on taxpayer-funded projects. The inquiry had been provided with a redacted version of the report and sought access to the full findings.
Sources familiar with the matter said the redacted version omitted entire sections critical of government oversight, raising concerns about transparency.
The CFMEU was placed into administration by the Albanese government in August 2024 following widespread allegations of corruption, violence and organised crime infiltration revealed in investigative reporting.
Irving has since removed dozens of officials and introduced reforms aimed at restoring integrity within the union.
Wider investigations and political fallout
The Watson report represents one of the most serious formal findings of corruption risks linked to a major Australian union and publicly funded infrastructure projects.
Investigations into CFMEU conduct are ongoing across multiple states, including Queensland and New South Wales, where inquiries are examining allegations of intimidation, cost blowouts and criminal infiltration in construction projects.
The controversy is expected to intensify political pressure on both federal and Victorian governments, with opposition figures demanding greater transparency and accountability over the handling of corruption allegations and the decision to initially withhold parts of the report.
Authorities and inquiries continue to examine the full extent of the allegations, with further public hearings and findings expected in the coming months.
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