ROYAL COMMISSION INTO TRADE UNION
GOVERNANCE AND CORRUPTION
Level 19, 55 Market Street, Sydney, NSW, 2000
On Wednesday, 4 November 2015 at 10.00am
NATIONAL UNION OF WORKERS NSW
(DAY 1)
Before the Commissioner: The Hon. John Dyson Heydon AC QC
Counsel Assisting: Ms Sarah McNaughton SC
Instructed by: Minter Ellison
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1 THE COMMISSIONER: Yes, Ms McNaughton?
2
3 MS McNAUGHTON: Would you like to take appearances first,
4 Commissioner?
5
6 THE COMMISSIONER: Yes, perhaps that is a good idea.
7 I see Mr Boulten is here.
8
9 MR P BOULTON: Yes. I seek authorisation to appear for
10 Paul Gibson.
11
12 THE COMMISSIONER: We have granted that, but you can have
13 it again.
14
15 MR BOULTEN: I seek leave to appear.
16
17 THE COMMISSIONER: Yes, certainly.
18
19 MR A JOSEPH: If the Commission pleases, my name is
20 Joseph, initial A. I seek authorisation, along with my
21 friend, Ms Lin, to appear for the National Union of Workers
22 New South Wales and also for the following witnesses:
23 Mr Wayne Meaney, Mr Nick Belan, Mr Terry McQuillan,
24 Mr Mark Ptolemy, Mr Charlie Morgan, Mr Bruno Mendonca and
25 Ms Marilyn Issanchon.
26
27 THE COMMISSIONER: Yes, that is granted.
28
29 MR P E BLACKET: Commissioner, Blacket is my name. I seek
30 leave to appear for Lincoln and Michael Hudson.
31
32 THE COMMISSIONER: Thank you. That is granted. Yes?
33
34 MS M GERACE: Commissioner, I seek leave to appear for
35 Derrick Belan. My name is Ms Gerace - G-E-R-A-C-E.
36
37 THE COMMISSIONER: That is granted.
38
39 MS GERACE: By Andrew Lloyd, Solicitor.
40
41 MR J LOCKHART SC: Commissioner, I seek authorisation to
42 appear for Mr Rixon, Mr Shrimpton and Mr Jenkins.
43
44 THE COMMISSIONER: Yes, that is granted. No more
45 appearances? Very well. Ms McNaughton?
46
47 MS McNAUGHTON: The hearings commencing today and
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1 scheduled to conclude on Friday concern the NSW Branch of
2 the National Union of Workers or NUW. This is the second
3 Case Study the Commission has considered concerning the
4 NUW.
5
6 In September 2014, the Commission examined the
7 activities of two relevant entities associated with the NUW
8 in Victoria.
9
10 In opening the 2014 hearings, Counsel Assisting noted
11 the long history of the NUW and the breadth of
12 representation the NUW offered to workers across a wide
13 range of industries, including warehousing, distribution,
14 storing and packing. Those matters will not be repeated
15 today.
16
17 The NSW Branch of the NUW, which I will refer to as
18 "the Branch", operates under both Federal and State
19 legislation.
20
21 Federally, the NUW is an employee association
22 registered under the Fair Work (Registered Organisations)
23 Act 2009. Under that Federal legislation, the Branch does
24 not have any legal status independent of the Federal
25 organisation. However, the Branch is also registered as an
26 employee organisation under the Industrial Relations Act
27 1996 of New South Wales.
28
29 The effect of State registration is to incorporate the
30 Branch as a body corporate with its own legal status under
31 the laws of New South Wales. This dual legal personality
32 is not uncommon for employee associations in States which
33 retain a registration regime independent of the Federal
34 regime.
35
36 In 1992, the New South Wales State registered Branch
37 of the NUW reached an agreement with the federally
38 registered NUW that dealt with membership and assets. In a
39 letter dated 17 February 2015 to the Fair Work Commission,
40 the then Secretary of the Branch confirmed that all funds
41 are held for the benefit of the New South Wales State
42 registered Branch and the NSW Branch of the Federal
43 organisation jointly.
44
45 The late Mr Frank Belan became the State Secretary of
46 the Storemen and Packers Union in 1983 and then following
47 amalgamation of the NSW Branch of the NUW until his death
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1 in October 2001.
2
3 His son, Darack, generally known as Derrick, was
4 elected as his father's replacement and was elected
5 unopposed at every subsequent Branch election.
6
7 A summons to appear before this Commission was served
8 on Derrick Belan on Friday, 16 October 2015. In the
9 following week, he resigned his position as State Secretary
10 of the NUW New South Wales and on Friday, 23 October 2015
11 at an Extraordinary Committee of Management meeting,
12 Mr Wayne Meaney was appointed to fill the casual vacancy of
13 State Secretary.
14
15 In the period of time being considered by the
16 Commission, Mr Belan's niece, Ms Danielle O'Brien,
17 May Belan, was the Accounts Manager of the Branch.
18 Mr Belan's brother, Mr Nicklouse, or Nick Belan, was a
19 Branch organiser.
20
21 This hearing will canvas a range of issues associated
22 with the financial governance of the Branch. The
23 Commission's investigations have focused on the period from
24 1 January 2010, which I will refer to as the relevant
25 period.
26
27 The issues under investigation include:
28
29 1. Use of Branch credit cards;
30 2. Possible defalcations of Branch funds:
31 3. The relationship between Mr Belan and
32 Action Workforce;
33 4. Branch funding of the Ultimate Training Centre;
34 5. The use of a fund known as the "Derrick Belan Team
35 Campaign Fund";
36 6. Payments to Mr Paul Gibson; and
37 7. Mr Belan's severance terms.
38
39 I will now briefly address each issue in turn.
40
41 Use of Branch credit cards:
42
43 Investigations by the Commission have identified a
44 large number of suspicious transactions on Branch credit
45 card statements.
46
47 The Branch utilised American Express Corporate cards
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1 since at least December 2009 and also Commonwealth Bank
2 Mastercards since October 2010.
3
4 Account statements reviewed by the Commission record
5 $494,751.77 in transactions on Mr Belan's American Express
6 Corporate card in the period 19 December 2009 to 24 October
7 2015. Account statements for Mr Belan's Commonwealth Bank
8 Corporate Mastercard record $84,287.18 in the period
9 17 October 2010 to 18 March 2015.
10
11 The Commission does not suggest that all of the
12 expenditure on Mr Belan's corporate credit card is
13 suspicious or potentially improper, but the transaction
14 records do disclose significant expenditure which, on its
15 face, appears to be for personal benefit. This includes
16 over $39,000 in purchases from the website
17 www.catchoftheday.com.au. Purchases from this website
18 include ostensibly personal items such as clothing,
19 electric blankets, manchester and bed linen, cutlery sets,
20 cameras, rugs, skateboards, Lego toys, kitchen appliances,
21 sunglasses, children's toys, iPads, Easter eggs, make-up
22 and beauty care products, Tiffany & Co jewellery, perfume
23 and other obviously personal items. Almost $12,000 in
24 iTunes purchases, $2,271.70 in fees for dating websites;
25 payments for entertainment, holidays and accommodation
26 apparently unconnected with Union duties, and the purchase
27 of a tattoo.
28
29 A significant issue for investigation is whether
30 Mr Belan or others, with or without his knowledge or
31 permission, obtained the benefit of the purchases on his
32 corporate card or cards.
33
34 Ms O'Brien's access to and possible use of the
35 Branch's Corporate cards card as Accounts Manager will be
36 part of the investigation.
37
38 The Commission is also inquiring into the corporate
39 governance arrangements concerning the use of the Branch's
40 Corporate cards, including the processes and procedures for
41 supervising and approving credit card expenditure.
42
43 The Commission has also identified suspicious
44 transactions on the Corporate cards of other current and
45 former Branch officials and employees. In at least one
46 case, a significant number of suspicious transactions have
47 been incurred on the Corporate credit card of a Branch
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1 organiser after he left his employment with the Branch.
2 That organiser is expected to give evidence that he
3 returned the relevant credit card on ceasing employment
4 with the Branch and has not utilised it after that date.
5
6 The Commission's investigation seeks to identify who
7 is responsible for the suspicious transactions on these
8 various Corporate credit cards.
9
10 One of the issues the Commission will also need to
11 investigate is the extent of any reimbursement of personal
12 expenditure to the Branch. To date, the Commission has not
13 identified any reimbursement of personal expenses in the
14 Branch's financial records.
15
16 The next topic: Possible Defalcations of Branch
17 Funds.
18
19 An analysis of the Branch's financial records by the
20 Commission's financial investigators has identified a
21 series of suspicious payments from Branch funds to various
22 personal accounts of Ms O'Brien under the guise of wage
23 payments to Union officials and employees.
24
25 In the period 1 July 2011 to 30 June 2015 these
26 suspicious payments totalled $68,395.56. The Commission is
27 investigating the circumstances surrounding these payments
28 and what became of the funds. Ms O'Brien has been
29 summonsed to give evidence before the Commission.
30
31 Relationship between Mr Belan and Action Workforce is
32 the next topic.
33
34 Action Workforce is a labour hire company. It has a
35 relationship with the NUW because it supplies labour to
36 many employers the subject of enterprise bargaining
37 agreements with the NUW.
38
39 The Commission has received statements from the
40 following officers of Ashley Services Group Limited, the
41 holding company of Action Workforce: Mr Ross Shrimpton,
42 Mr Paul Rixon and Mr Gregory Jenkins.
43
44 The Commission has identified that in 2014,
45 Action Workforce, at the request of Mr Belan, paid for a
46 private investigator to undertake surveillance of someone
47 domestically connected to Mr Belan. The Commission has
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1 also identified accommodation for Mr Belan paid for by
2 Action Workforce and other contributions by that company to
3 NUW fundraising events.
4
5 Mr Shrimpton is expected to give evidence that he
6 personally funded the private investigator after it was
7 passed through the books of Action Workforce and that he
8 regarded it as a personal loan to Mr Belan. The Commission
9 is investigating whether there has been any conduct which
10 may constitute the giving of any corrupt commission or
11 award to Mr Belan for the purpose of section 249B of the
12 Crimes Act 1900 (New South Wales).
13
14 The Commission is also investigating the circumstances
15 in which Action Workforce employed Mr Ian Dalziel and his
16 relationship with the Branch at the time.
17
18 The next topic is the Ultimate Training Centre.
19
20 The Ultimate Training Centre, UTC, is a gym at
21 St Mary's in western Sydney. Its website says that it is a
22 fully equipped gym and one of the best combat sports gyms
23 in New South Wales.
24
25 The Commission is investigating the relationship
26 between the Branch and UTC, including the payment of over
27 $200,000 by the Branch to Elite Fight Club Pty Ltd, trading
28 as the Ultimate Training Centre, in the period July 2013 to
29 May 2015.
30
31 The sole Director and Secretary of Elite Fight Club
32 Pty Ltd is Mr Michael Hudson. However, his father,
33 Mr Lincoln Hudson, is closely involved in the operation of
34 the business.
35
36 The Branch has produced to the Commission a letter
37 from July 2013 outlining the terms of an agreement between
38 the Branch and UTC. The recitals to the agreement record
39 that the Branch agreed "to sponsor UTC by paying the rent
40 for the premises and other amounts (sponsored amounts)
41 subject to you", being the UTC, "Providing the credits and
42 benefits to us as set out below."
43
44 UTC's obligation under the agreement was to allow the
45 Branch to place NUW logos, posters and promotional material
46 in the gym, to place NUW logos on the helmets of UTC
47 fighters, and to offer all members of the Branch discounted
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1 membership rates to join the UTC.
2
3 Records produced to the Commission show that the
4 Branch has paid UTC's rent, information technology costs,
5 and other expenses. The UTC offers a 30 per cent discount
6 off each membership category to members of the Branch.
7
8 The UTC's records indicate that it currently has
9 68 members receiving the Branch discount. The Commission
10 has not identified any approval of the sponsorship
11 agreement by the Branch Committee of Management.
12
13 The next topic is: The Derrick Belan Team Campaign
14 Fund.
15
16 In the relevant period, the Branch collected money
17 from officials for a campaign fund. The collections are
18 recorded in the Branch's financial records in a dedicated
19 ledger account.
20
21 From September 2007 until October 2013, there was a
22 bank account operated with the Commonwealth Bank of
23 Australia in the name "The Derrick Belan Team". The
24 persons authorised to operate that account were
25 Mr Wayne Meaney, Mr Ronald Herbert and
26 Ms Marilyn Issanchon. Until his recent appointment as
27 State Secretary of the Branch, Mr Meaney was the Assistant
28 Branch Secretary. Mr Herbert is a Branch organiser and
29 Ms Issanchon is the Branch President.