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Royal commission questions donations from Tradies clubs to union charity

The royal commission into trade unions has questioned donations from the Tradies clubs to a union-controlled charity, referring the question to the ACT government and the police for investigation.

The commission found there was "a substantial possibility that the payments made by [the Tradies clubs] were not genuine contributions to a charitable organisation but disguised contributions".

It has described a "remarkably complex" set of relationships between CFMEU-run entities in Canberra, including a training arm called Construction Employment Training and Welfare (CETW) and a charity called Construction Charitable Works (CCW).

The commission found that the charity's funds "have been diverted for non-charitable purposes for the benefit of the CFMEU ACT", and "by causing or allowing the diversion to occur, Jason Jennings, Dean Hall and Jason O'Mara may have breached their directors' duties".

It has referred the issue to the charities commission to consider revoking the charity's registration.


The union training arm, CETW, was set up in 2010 with directors Dean Hall, Jason O'Mara and Jason Jennings, the three top officials of the ACT branch of the CFMEU. The CETW is the trustee for Creative Safety Initiatives, both directing all profits to the union, totalling  $1.18 million in 2013 and 2014.

Construction Charitable Works is a charity whose only member is the Canberra Tradesmen's Union Club Community Fund, whose members in turn are the two Tradies clubs. The charity's directors are Dean Hall, lawyer Martin Carrick and accountant Scott Abraham. CFMEU official Jason Jennings is the chief executive of the charity and the training group.

The community fund's directors are Dean Hall, Jason O'Mara, Jason Jennings, Rod Driver and Trevor Scott, all CFMEU officials. The directors of the Dickson and Woden Tradies clubs include CFMEU officials Dean Hall, Jason O'Mara and Jason Jennings. 

The training group gets its money from employers, who are required by enterprise agreements to use the union training group; from a management fee paid by the union charity; from "gap" payments made by the charity for training apprentices; and from a government-mandated training rebate.

The charity's main source of funds is donations from the Tradies clubs, plus an annual charity breakfast and deductions from employees. More than 80 per cent of its spending is on the union training group.

The royal commission found the $215,000-a year "management fee" paid by the charity to the training group to run its operations was inflated by $100,000 to $160,000, and suggested it was inflated to generate revenue for the union.

"Monies paid to CCW [the charity] ostensibly for charitable purposes have been used, not for charitable purposes, but to generate profit for CETW [the training arm], which profit has in turn flowed directly to the CFMEU ACT," it said.

It pointed to the conflict of interest of Jason Jennings, Dean Hall and Jason O'Mara as current or former directors or senior officers of the charity, whose responsibility to act in the best interests of the charity meant paying a low management fee, whereas acting in the best interests of the training arm meant charging a high management fee, leaving "each in a classic position of conflict".

The commission questioned donations from the Tradies clubs to the union charity. The donations were made under laws requiring clubs to give at least 8 per cent of poker machine profits in community contributions. Contributions to a trade union don't count.

The Tradies declared $715,000 in community contributions to the union charity for "drug and alcohol training" in 2013 and 2014, with another $150,000 paid for the first half of 2015. But nothing like that had been spent by the charity on drug and alcohol training, and in 2013 some or all of the money must have flowed on to the training organisation in the inflated "management fee" which then flowed to the CFMEU ACT, the royal commission found, concluding there was "a substantial possibility that the payments made by [the tradies clubs] were not genuine contributions to a charitable organisation but disguised contributions".

It drew no conclusions, having not heard from the clubs in its hearings, but has referred the issue to the police and the ACT government.