The ‘significant turning point’ in Big Build corruption scandal

Slight of the Underworld joins us.Good morning, Slight.Good morning, team.Another day, another tobacco fire, another CFMEU allegation.Ripper.And I bring with me a very interesting secret report written about organised crime in Victoria which prophesised that organised crime would move into labour racketeering.

Tick.Alcohol.Tick.Nightclubs and taverns.Tick.Building and road construction.

Tick.It recommended a massive extortion squad, because after all, these are what the crime is.You know, you will sell my tobacco or we'll burn you down.You will take my illicit alcohol.We will run the security or we'll burn you down.You will employ our people or we're going to stop the build.

It's all extortion.So that was the recommendation.When do you reckon the report was written?

Oh, I'm just looking at the paper it's written on.It's off colour and it's clearly a typewriter's been used.

So a long time ago.August 11.1964 It was written by John T Cusack the American Mafia buster who came out here to look at our market murders involving The Honored Society, but he actually gave a full report on What you need to do to get in front of the game, which was cheerfully ignored.I eventually got hold of Cusack very impressively he was doing some some consultancy work in the West Indies So I would have got hold of him personally 30 years after he wrote this report and he stood by every word.He said, what we need is a massive undercover unit so that we can infiltrate organised crime and we must get informers.Well, we know that the government will not have a Royal Commission into the CFMEU, but it lost its collective marbles over Nicola Gobbo.

So we had a Royal Commission into Nicola Gobbo, which cost $100 million and didn't arrestbut we're not having one into the CFMEU, which has cost billions in taxpayers.Work that out.But the Gobbo thing is impacting on the CFMEU in the most bizarre way, because it was an investigation into the management of informers.So a new system was brought in on dealing with informers, which is effectively unworkable.So when we had the report into the Builders Labours Federation, it was based on confidential sources.

Why do you think Nick McKenzie is doing such brilliant work when the police are not making the same inroads?Because Nick McKenzie can accept confidential information, but under the Gobbo model, police are effectively in a position where they may have to equate Disclose the identity and there's a new contract for a human source Which effectively says last the last thing you've got a sign is we can't protect your identity Added to that we've got new disclosure laws, which means that everything that the police learn and is put on paper Has to go to the defense even when it's a irrelevant So if the police take three months to prepare a brief It now takes six months because of the disclosure, which is another reason why court dates are going out.And I'm telling you, there will be cases abandoned because police will not be prepared to identify the sources and put them at risk.

So is this part of we had on the front page of The Age, I think it was yesterday, in the last couple of days, obviously the police in charge of that crime squad saying they didn't have the significant powers tothe actual tools at their disposal to take this further.So what would they need, or what are they talking about when people just pick up the phone and go, well, what else does the police need?

Well, the first thing, right across organised crime, this is serious business, and we have seen witnesses killed.So you have to get, go back to CUSAC, and we need to have a situation where the police can protect the identity of secret sources.

And without that, you are going nowhere.Okay.If a new mob gets in charge of this state and they want this badly, how quickly could they turn around all these powers?

You would review disclosure.You would make it a serious criminal offence for police to conceal anything that is relevant and say you would immediately get back a hundred detectives because they wouldn't be doing disclosure work.Secondly, we need a human source policy which protects, clearly protects the identity and the safety of these people.Now we're not talking about co -accused where they fizz, they give information because otherwise they're going to jail for 15 years.What we want is the legitimate businessman or business person who is stood over by these groups, and it takes a lot of guts.And I tell you, one person who had a lot of guts, and that was a grandmother who fixed up a bikie called Skitzer, because he found the bikie's dog went missing.

The woman found the dog.The bikie came around and said, give me the dog, and was rude, said, produce some identification.He clocked her.And she stood up and gave evidence against him.Even when the bikies were doing donuts outside her house, she said, you can all get stuff.He did it and he went to jail.

Good on him.

It's the biggest story this year in recent years.Leaders of the police task force established by the government to tackle the big bill corruption have declared there is no doubt organised criminals have infiltrated the construction programme and warned combating the sector's entrenched problems will require legislative change.Well, let's talk to Nick McKenzie.Good morning, Nick.

Morning guys.

There's still plenty to unfold here.We're picking up the newspapers as well and the police are talking about, well, the grey space of corruption is much broader than the criminality remit than we have.Can the police actually do something about this?

I think this is a very significant turning point in this whole scandal.We've had the Premier say the police are the right place for all this corruption on the Big Build to go.And now we have the police coming out and saying, listen, we can only do so much.We cannot investigate a lot of the corruption on the Big Build.And also very significantly, the head of the police task force investigating crime on the Big Build says that there is no doubt organised crime has infiltrated the Big Build.Now keeping in mind we have a Premier who won't acknowledge the fact of this corruption.

She describes it as allegations.and who says the police have all the powers they need.What else do the police say?They say we do not have all the powers we need.There needs to be legal changes, changes to the law to get rid of these problems.One example, gangland fixes in the sector like Meat Gato, the police say there desperately needs to be character checks to make sure people like Meat Gato would have to go through a fit and proper test before they can represent big build subcontractors.

As I speak to you right now, Mick Gatto is making money being paid by big build subcontractors for the right for them to stay on big major Victorian government projects.It shouldn't be the case.

Hey, Nick, every time I see the Premier speak when she's being questioned on theshe just seems to say, I can't believe nobody is coming to the police with information.Now, I watch you and you've got whistleblowers, you've got receipts, you've got emails.Has anyone from the police called you to say, give us a look at what you've got?

The police have all this information as well.The police have called me. I'm assisting them as best I can.But there is a big difference.I can get a confidential source who will give me the evidence of, say, payments to Mick Gatto, which we've got.We have utterly exposed more than a dozen subcontractors on the big build paying Mick Gatto because of these confidential sources.But I don't ask those sources to get in the witness box and testify against Mick Gatto.

That's the police's job.Now, quite rightly, when the police ask them, they say, well, What's going to happen when my house is burnt down?What's going to happen?I'm not saying you're going to do that, but just generally speaking, to testify against people in the gangland, you take that risk.Your house will be firebombed.Your business will be affected.

Your personal safety or that of your family may be affected.That's why the police can't get witnesses.It's a huge difference.And what's amazing, I think, is we have the Premier of this state saying repeatedly yesterday, I can't understand.why witnesses aren't racing to the police.Well, if your house was on fire, you'd understand.

If your family was threatened, you'd understand why they'd be reluctant.That's why the police can only do so much.That's why the police have broken their silence to say there's only so much we can do as a police force.

Do you get the feeling that Jacinta actually knows that, Nick, that people are worried about what might happen to their property?Do you think she actually knows and feels that and kind of dances on it?It certainly didn't look like it.

Yesterday, I mean, she seemed to be baffled by the idea that police were struggling to get witnesses to testify against some of the most notorious gangland bosses in this state.And I think most Victorians would find that inexplicable.Someone very senior in the Labour Party said to me yesterday,you know what, the cover -up's always worse than the crime.It's starting to look like the Premier of this state is seeking to cover up what is obvious to everybody in this state.And I think that's politically far more damaging in some respects than the actual fact of corruption on the big bill.

But of course, if you testify against somebody who has been in a gangland for 30 -odd years, and that testimony can affect their income stream there's a chance or at least obviously the fear of reprisal and the police made that very very clear in fact they said we've been operating like hell for a year to try to get witnesses we have less we can count the witnesses on one hand less than the five fingers on the one hand but we know there's hundreds of people out there that actually hold the information we need if they could be prepared to testify we could change this game but for obvious reasons they won't which is why they've called on Others out there, they say, you know, the big build mega contractors, the tier ones building these projects with the Labor government using taxpayer money to do so, they've got to pick up the phone, they've got to fight corruption, they've got to do far more.The police seem to be very displeased with the lack of energy coming from these big tier ones.

It's probably because, as mentioned in your 60 minutes coverage on Sunday, everybody eats, Nick.

Well, everybody has been feasting on the big build and we focused on Mick Gaddo.I'll say clearly now, he denies any wrongdoing and he's not been charged or convicted with any serious criminal offence.But he is the most extreme example of the sort of people making a huge amount of money from the big build.Mick Gatto is, it's a fact or so, he isn't established and has been for many years seeing a gangland identity.His name carries a ring of fear in this town and has for a long, long time.We have proven, thanks to the help of people inside the Gatto network, of broken ranks,

of assisting us.People have put him on the payroll.We've got invoices, we've got details, which allowed us to prove two subcontractors in the big build alone, and he's got over a dozen that are paying him, have paid him over a million dollars.And why it's for the right to operate on projects in Victoria, it should not be in this state that to win work on major projects, including government projects, you need to pay a gangland fixer.

Nick, you touched on before, you know, the cover -up is worse than the crime and a lot of people are calling for a Royal Commission.Of course, the Premier says they'll take too long and cost too much.Please.She can set the terms and conditions, well, terms and conditions can be set, you know, as far as time goes and cost as well, but genuine fear that as, again, going back to the 60 Minutes report that you put, that this is worse than the corruption going on that happened in PNG.

Well, isn't that amazing?You've got the former Deputy Commissioner of the PNG anti -corruption watchdog saying Melbourne's now like Papua New Guinea, one of the most corrupt nations in the world, thanks to the way this corruption scandal is being handled and the way that contracts sometimes are managed or given on the big build.And the fact of the matter is we are two years into this scandal.Had the Premier of this state called for a proper style inquiry two years ago and done what was needed two years ago, there wouldn't be the demands today for a Royal Commission.I think Victoria will be getting a Royal Commission one way or another.People in Labor, I think what's changed for me is people in the Labor Party, people in the government's caucus, the MPs around the Premier are saying, we know a Royal Commission is needed.

It's obvious now.And the failure to have one is starting to kill us electorally.It certainly The Coalition is very strong calling for a Royal Commission.So you think one way or another, it might be after you've got it.or before, but there'll be some sort of a significant inquiry.And you know what, the people of Victoria deserve to know which gangland figures have made how much from the Big Build.

Right now, we don't know that because the Premier won't tell us.And who was the Minister responsible for the Big Build?During most of those years, Gadot was making his big bucks.Cousin Jacinta.Indeed.So perhaps that's why there's a reluctance to really lift under these vital rocks.

Hey, Nick, I see Federal Labor, they set the terms for their Royal Commission into Bondi.Would we be best to wait until this Victorian Labor government is not controlling and get the Liberal Party to set terms on a Royal Commission?

It's a very good question because certainly the Labor people I speak to say the clever move by Labor is to call a Royal Commission now and make sure the judge running the show or the second person in charge structures it in a way that is favorable to labor.That would be the smart political thing to do.To be frank, there's a danger when conservatives call royal commissions, we've seen it in the past with the Howard government and the Abbott government, calling royal commissions, that do become union bashing exercises.They become so politicized, they lose credibility.Not always the case.We've had some tremendous royal commissions in this country that have worked, the Costigan Royal Commission on Organized Crime.

actually worked to expose organized crime structures, tax evasion, et cetera.In Australia, if the right judge and the right investigators are in charge, then Royal Commissions can do a hell of a lot.If they become politicized, if they become, because they're arms of executive government, if they become the beast of the Labor Party or the Coalition or whoever's in charge, then they can lose credibility.And that's one of the dangers with the Royal Commission.But here's an idea.Make this Royal Commission not into unions.

Make the Royal Commission into organised crime in the construction sector in Victoria.So it becomes apolitical.Why doesn't the government do that?Take the politics out of it.Let's figure out which gangsters, which bikey gangs have gone the big build, how they've got there.which politicians, which public service allowed this to happen, but make an attack on organised crime and crime in this state, because I think every Victorian would support that.

Well done Nick, keep up the amazing work, no doubt this story will keep unfolding.Nick McKenzie, award -winning investigative journalist for The Age.