source : the age
Disgraced former CFMEU chief John Setka is refusing to cede control of more than $1 million held in a private political slush fund that has earned millions of dollars, including via a murky deal struck with Coca-Cola to take a cut of the sale of soft drinks on building sites.
Leaked correspondence obtained by this masthead reveals that Setka and former CFMEU senior official Ralph Edwards were last week accused by CFMEU administrator Michael Crosby of continuing to hold hostage a multimillion-dollar slush fund that “could have been – and should have been – income earned by the CFMEU for the benefit of its members”.
Crosby’s ongoing forensic inquiries have determined that “over $400,000 has been received from Coca Cola Amatil by” the Setka-Edwards slush fund as it earned more than $3 million from building site vending machine deals and the sale of CFMEU merchandise.
“In the last 15 years none of that money [from Coca-Cola] has been handed over to the CFMEU,” he said in a letter to Setka. “John Setka and Ralph Edwards through [the slush fund] … have retained that money for themselves.”
Setka told this masthead the vending machine arrangement had been struck long before he became secretary of the union and denied any wrongdoing.
Crosby’s inquiry is yet to make any final conclusions but has identified “$100,000’s withdrawn in cash from the [slush fund] bank account by John Setka and Ralph Edwards” in circumstances in which “how the cash was spent is unclear”.
Setka and Edwards, who both left the union amid this masthead’s first reporting of criminal infiltration of the union in 2024, have denied wrongdoing in their handling of the slush fund.
But they have refused to return the money, saying they will control it until the CFMEU exits administration.
In another development, Setka and several other former ex-CFMEU lieutenants are facing possible civil prosecution for their suspected misuse of $329,000 in members’ money to entrench the power of the allegedly corrupt former boss of the Health Workers Union and ALP powerbroker Diana Asmar.
Confidential sources, not authorised to comment publicly, told this masthead that the union watchdog, the Fair Work Commission, is considering launching Federal Court action over an alleged operation, involving Setka, to covertly funnel CFMEU funds to Asmar.
The ongoing slush fund inquiry and the separate and still unfolding Asmar funding scandal both involve the same core issue: the alleged misuse of significant sums of money to entrench the power of Setka and his allies in Victoria’s trade union and Labor circles.
On Friday, CFMEU royal commissioner Chris Kourakis unveiled the two senior barristers who will help him examine if Setka’s use of the CFMEU’s vast industrial and financial muscle allowed it to hijack the Labor government’s Big Build.
In a sign that former South Australian chief justice Kourakis is not shying away from scrutinising the Labor government that appointed him, he has named silk Christopher Carr, SC, as one of his counsel assisting.
In 2021, Carr was counsel assisting the IBAC anti-corruption commission’s inquiry into how former and disgraced Labor minister Adem Somyurek abused public funds and engaged in Labor Party branch stacking to build a political empire in Victoria.
The other counsel is Chris Young, KC, who has appeared in cases involving building and construction projects.
While he was not a subject of the IBAC inquiry, Setka was formerly a key factional ally of Somyurek, and the pair’s former alliance helped the CFMEU wield immense influence in the Andrews government.
In an interview on Friday, Setka said the funds he provided to the allegedly corrupt Asmar were “lawful” and common practice for unions to support favourable candidates.
A small portion of the $329,000 in funds Setka ordered be sent to Asmar were wired to a fake printing company that is separately accused in Fair Work Commission Federal Court action of being used to pay kickbacks to Asmar. There is no suggestion Setka knew the company was an alleged Asmar front.
Setka insisted the donations to support Asmar’s election were not against the union’s rules or the law.
“So why is this such a big deal? It’s not the first union we’ve helped,” he said. “We’ve helped plenty of f—ing unions. So that’s just how it works. We don’t interfere, we fund.”
He said it was necessary for unions to support each other to be an effective campaigning force and achieve political outcomes.
Setka also defended his continuing control of the $1 million-plus Building Industry 2000 slush fund, claiming he would return the funds if and when the CFMEU was taken out of administration by the Albanese government.
Setka claimed he had given the administrators access to the fund’s accounts and that he would hand control of it over to the union’s next elected secretary.
He claimed the administrators would “squander” the funds if they had control of the money.
“I’ve got all the proof, and we’ve seen all their bullshit questions, and it’ll probably be a court case about it, and they are going to end up very f—ing embarrassed about it,” he said. “No money of that has been spent on any personal use by me or any director.”
Asked why there would be withdrawals for tens of thousands of dollars, Setka nominated legal fees associated with the Heydon royal commission.
“There’s no misappropriation of anything; the only money that gets spent is on the bookkeeping,” he said.
Despite staying defiant and retaining the support of a clique of former and serving CFMEU insiders, multiple well-placed union sources told this masthead this week that Setka appeared increasingly rattled as he faces the prospect of legal action brought by Taskforce Hawk, the CFMEU administrator and the Fair Work Commission.
In his letter to Setka dated August 25, Crosby accused the ex-union boss of directing the CFMEU to “gift” to the Building Industry 2000, a private company set up as a slush fund, “the business of selling CFMEU-branded merchandise to CFMEU members”.
Crosby said the slush fund “earned over $2 million in selling CFMEU branded merchandise, usually using CFMEU employees to sell merchandise to members without telling members that the money was being diverted to a private company”.
“The union never approved of this multimillion-dollar gift to John Setka and Ralph Edwards and their private company,” Crosby said.
Setka said the merchandise arrangement was “appropriately organised and authorised”. He also claimed the merchandise operation was loss-making when it was transferred to the fund, which meant the union no longer had to carry those losses.
In a statement on Friday, Edwards said the fund’s operation was “the subject of investigation by the CFMEU administrator” that he was co-operating with “through our legal representatives”.
“We will not make any comment while this investigation proceeds,” he said.
In contrast to Setka, Edwards is widely regarded in the trade union as an honest idealist, albeit one that has increasingly enabled Setka in his efforts to derail the administration.
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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.
