A Sydney building contractor paid the ACT branch of the Construction, Forestry, Mining and Energy Union $3,674 for 12 "ghost" memberships, the royal commission into unions was told in Canberra on Friday.
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Clyde Daish, a director of HD Projects, said the payment had been demanded by former CFMEU organiser, Halafihi "Fihi" Kivalu when the company was working on the Ambassador Apartments in Deakin.
Mr Kivalu has pleaded not guilty to two counts of blackmail following admissions on Thursday he had accepted payments from building contractors.
Mr Daish told Friday's hearing: "In early February 2010, during the early stages of the project works at Deakin, I was informed by [the site manager] that CFMEU officials including an organiser called Fihi had sat my employees in the work sheds on site and told them they were required to be covered by an ACT CFMEU EBA if they were working in Canberra."
"This had caused a disruption to work on the site."
When Mr Daish spoke to Mr Kivalu by phone the then organiser told him if the company was working in Canberra its employees needed to be covered by the Canberra union.
Mr Daish told Mr Kivalu: "Our employees are already covered by a CFMEU EBA and we are paying our employees in accordance with it."
Mr Kivalu said: "I don't care; we'll let you go on the EBA for now, but you'll need to pay for memberships."
Mr Daish then told Mr Kivalu the NSW workers engaged at the site were already members of the NSW branch and that the ACT workers were not interested.
He said Mr Kivalu told him: "You need to pay anyway. I will just make up 12 names. You need to pay for 12 employee memberships."
Mr Daish agreed to do this, telling Mr Kivalu "But you must send an invoice".
This was done, and the memberships, which he described as "ghosts", were paid on the company credit card.
The CFMEU invoice for $3,674.20 for the 12 memberships, dated February 11, 2010, and sent with a covering note from Mr Kivalu, was tabled at the hearing.
A bank statement, showing the payment was made on February 16, was also entered into evidence.
Mr Daish said he remembered the conversation with Mr Kivalu clearly because it had been "really out of the ordinary".
"Over the years we've been working in this sort of work, we hadn't had anyone actually really do that sort of disturbance on a job and asking for memberships of guys that are already members," he said.
Counsel assisting the royal commission, Jeremy Stoljar, asked Mr Daish: "Why did you agree to that proposal?"
Mr Daish replied: "Well, we were at a standstill. There's a lot of pressure on us to perform on projects, we are contractually obligated to achieve a certain amount of work each day. This seemed like a fairly easy way to move forward and get through it.
"I do not believe any membership list was attached to the (invoice) facsimile. I do not recall receiving a membership list."
Names were produced when the CFMEU tried to have the memberships renewed Mr Daish said: "HD Projects was later contacted by the CFMEU asking HD Projects to renew the memberships. I do not recall when this was. I recall being informed by my administrative staff that the CFMEU identified the names of persons who were said to be employees of HD Partners. None of the persons identified was or had been an employee of HD Partners; ie the names were unknown to us. I instructed my staff not to renew the ACT memberships."
