Markets 
Federal police are warning that their investigations into building industry crime and corruption are being hampered by threats from organised crime figures and a culture of fear and silence still permeating the building industry.
The police concerns are contained in a confidential letter sent last week by a high-ranking Australian Federal Police officer to building companies operating in Melbourne, Sydney and Brisbane.
The letter highlights the immense challenge facing law enforcement agencies probing building sector corruption, including state and federal government contractors on Victoria’s Big Build and taxpayer-funded projects in NSW and Queensland.
The revelations that police investigations are still stymied underscores the limits of Victorian Premier Jacinta Allan’s frequent response through the Building Bad scandal that anyone aware of wrongdoing should report that to police.
Victorian detectives have also been hamstrung by witnesses and victims who refuse to co-operate because of fears of underworld blow-back.
Victoria Police’s Taskforce Hawk, which is working with the AFP’s national Operation Rye detectives to probe crime and corruption in the building industry, was recently forced to apply for a court order to compel a reluctant witness to testify in a key prosecution.
In the AFP letter, dated March 13, the federal police officer revealed the agency had “received information that many of the business owners that were contacted requesting their assistance” by detectives “have been intimidated into not cooperating with police after receiving threats”.
“The source of these alleged threats has been made known to the AFP,” the letter states, without identifying those believed to be responsible for the threats.
“Information has also been provided to the AFP that confirms companies have made facilitation/extortion payments to organised crime to enable building projects to progress uninterrupted.”
The federal police investigation being hampered by witness intimidation is probing how gangland and bikie-linked figures have been receiving large payments from companies on both private and publicly funded projects.
The payments were first revealed by this masthead and 60 Minutes over a year ago and have been made by businesses looking to gain favour with CFMEU insiders, on occasion leaving state and federal taxpayers underwriting payments to the underworld.
The AFP probe was sparked by this masthead’s reporting and, despite leading to dramatic police raids in suburban Melbourne last March, are yet to produce a single criminal charge.
In NSW, authorities have also laid no charges over firebombings and alleged bribery plots in the building industry over the past 18 months.
In contrast, the Victorian police have laid more than 70 charges, although many are for relatively minor offences and aimed at disrupting or deterring criminal networks rather than producing lengthy jail sentences.
On Wednesday, it announced a 42-year-old Maribyrnong man had been extradited from Tasmania and charged with blackmail over an alleged $663,000 extortion plot that has already seen three other men charged.
The man, who police said was believed to be a patched member of the Bandidos bikie gang, was due to face court on Wednesday night.
Despite the large number of charges, Victorian detectives have also been hampered by the culture of fear and silence that persists in the building industry.
The federal police probe has, according to the AFP letter circulated among construction industry insiders, been hit the hardest.
According to multiple construction industry sources, the Queensland government’s Commission of Inquiry into the CFMEU is now running a parallel probe into the suspect payments being investigated by the AFP.
In contrast to the limits facing police detectives – who have relatively minimal powers to compel suspects and witnesses to co-operate – the Queensland commission has royal commission style powers to unearth and air wrongdoing.
The inquiry used its special powers last month to publish a report by CFMEU corruption buster Geoffrey Watson, SC, which identified several targets of Operation Rye, including gangland identities Mick Gatto and John Khoury and major contractor Nic Maric, who owns large building firm LTE.
There is no suggestion by this masthead that the trio are behind any of the threats detailed in the AFP letter, which does not identify who may be responsible, or that they have been found guilty of any wrongdoing, only that they are named adversely in Watson’s report.
All three men have denied all wrongdoing, while Gatto has initiated defamation action against Watson.
Last week, this masthead photographed Khoury and Maric dining together on Spring Street near the Victorian Parliament.
Another Victorian company named in the Watson report as having paid Gatto and Khoury to deal with a building industry dispute is Cobolt, which is owned by businessman Christian Munn.
Munn’s lawyer, Grant Walker, has previously said Cobolt has denied allegations it paid the gangland figures, although Cobolt’s denial was described as “inaccurate” by Watson.
The Victorian opposition has vowed to call its own royal commission style inquiry, and introduce greater powers for police to probe the building industry, if it wins the November election.
On Wednesday afternoon an opposition-proposed bill passed through the state upper house that would give the state’s corruption watchdog “follow the dollar” powers, as recommended by both the Independent Broad-based Anti-corruption Commission and a parliamentary inquiry.
The bill immediately failed in the lower house, where Labor holds a handsome majority, while the premier was absent. But its passage through the upper house is a significant embarrassment to the government.
The Allan government has also strengthened the powers of police and industry regulators while dismissing the need for a broader inquiry.
In its March letter, the AFP urges its witnesses to hand over information about suspect payments made to union fixers or report if they “have been subjected to intimidation or threats, and as a result, you are not prepared to make a statement to police”.
“In the normal course of an AFP investigation, once a witness statement has been signed, any attempt to intimidate or threaten that witness is an offence under Section 36A of the Commonwealth Crimes Act 1914, that is punishable for up to five years imprisonment,” it says.
“It is prohibited to threaten, injure, cause loss to or punish a person due to their involvement in a federal judicial proceeding.
“Police require the assistance of the … building industry, of which you are a part of, to report crimes against the industry and to support the prosecution of those that have established criminal business models that profit from extorting the building industry.”
Allan denies road delays were costly
Allan on Wednesday also rejected claims the CFMEU delayed the North East Link or that the construction union’s disruption added to the toll road’s $10 billion blowout.
This masthead on Tuesday revealed that the consortium building the 10-kilometre project had complained to the government in March 2023 that the union’s misconduct had pushed back tunnelling by as much as two months.
Spark, the consortium building the project, briefed the government’s transport officials on the “negative impact” the CFMEU was having in a monthly report tracking progress in March 2023.
Asked whether the disruption, which saw CFMEU preventing the work of surveyors, had contributed to the North East Link’s budget blowout, Allan said: “Those claims are incorrect.”
The premier repeated the government’s explanation that the costs were due to an expansion of the toll road’s scope and said progress was on track to link the Eastern Freeway to the M80 Ring Road through Bulleen by 2028.
Allan said she met with the surveying industry at the time to talk through a “range of matters” complicating government projects.
The North East Link was initially budgeted at $10 billion and reassessed in 2019 at $15 billion, before reaching $26 billion in December 2023.
The government has also blamed the cost escalation on inflationary pressures brought about by the COVID-19 pandemic and Russia invading Ukraine.
Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.
Nick McKenzie is an Age investigative journalist who has three times been named the Graham Perkin Australian Journalist of the Year. A winner of 20 Walkley Awards, including the Gold Walkley, he investigates politics, business, foreign affairs and criminal justice.Connect via email.
Rachel Eddie is a Victorian state political reporter for The Age. Contact her at rachel.eddie@theage.com.au, rachel.eddie@protonmail.com, or via Signal at @RachelEddie.99Connect via X or email.From our partners
Read the full article here
