Updated ,first published
A Victorian industrial watchdog is moving to shut down the operations of a major labour hire firm closely linked to gangland figure Mick Gatto which has won lucrative contracts across the state’s $100 billion Big Build scheme.
Victoria’s Labour Hire Authority confirmed on Wednesday that it had taken steps to issue a notice to a subsidiary of the M Group flagging its intention to cancel the firm’s labor hire licence.
M Group supplies labour hire and traffic management workers across major Victorian sites including several taxpayer-funded projects, and the cancellation of the licence of one of the company’s subsidiaries could trigger cancellation of the licences of other entities in the group.
The aggressive action by the authority is not assured of success: M Group will be able to challenge it and pursue legal appeals.
While the authority has not detailed the reasons behind its move, this masthead’s Building Bad series revealed more than 18 months ago Gatto’s deep links to the company, including that his daughter and her drug trafficker husband were once shareholders.
The authority, which first licensed the labour hire group in 2022 and renewed its licence last year, confirmed on Wednesday night in a short statement that it had been investigating M Group.
“LHA has today issued M1 Trades & Labour Pty Ltd with a notice of intention to cancel its labour hire licence, following an extensive investigation into the company. The notice provides the grounds for cancellation and an invitation to show cause why LHA should not cancel the licence,” a spokesperson said.
Earlier on Wednesday, another M Group company had its Gold Coast-based operation called out by a major Queensland inquiry.
In a move that could see the entity lose its operating licence, the Queensland commission of inquiry into the CFMEU held a press conference outside the offices of M1 Traffic Control Queensland to highlight concerns about its potential links to Gatto.
The appearance of commissioner Stuart Wood, KC, and senior counsel assisting his inquiry Patrick Wheelahan, KC, outside the offices of the company on Wednesday morning is highly unusual for such an inquiry.
In a media statement, the commission pointed to a report from corruption-busting lawyer Geoffrey Watson, SC, last month that found M Group was a well-known front company for Gatto and that it appeared a new Queensland company was likewise linked.
Wood said no findings had been made about the entity, or any other, but appealed for information, which he said would be treated confidentially, and procedural fairness would be provided to anyone under investigation.
Wheelahan told the media that the commission was not suggesting Gatto owned the company or that it had engaged in any misconduct.
But he did say he was concerned that Victoria’s experience with the Big Build, where Watson estimated $15 billion was misspent, could be repeated ahead of the 2032 Olympics.
“The money pot is clearly now going to be in Queensland in the build-up to the Olympics, I think it’s $130 billion that is going to be spent,” he said.
“It would be remiss of us not to investigate, on the back of [Watson’s] report, that one of the companies that he says is linked to Mick Gatto now sets up in Queensland, because Queensland does not want to end up like Victoria.”
The Victorian government has insisted that it has taken enough action to clean up the construction industry in the wake of this masthead’s reporting.
The Watson report, tabled with the Queensland inquiry last month, said Gatto owned a number of companies within the M Group and that there was no doubt it received favourable treatment from the CFMEU.
He estimated one company in the group would earn $52 million in 2025.
“Gatto, of course, denies he owns the M Group companies, but that is transparently false. The attempts to conceal Gatto’s involvement are crude,” Watson’s report said.
Watson found that Gatto was a malignant influence and detailed several examples of what he said was “criminal conduct”.
Gatto has repeatedly denied wrongdoing and derided Watson’s findings publicly.
M1 director Tony Paragalli said he disputed “every single one” of Watson’s allegations and the suggestions made by the inquiry on Wednesday.
“At no point did anyone [Watson or the inquiry] ring us to ask about any of the facts,” Paragalli said.
Paragalli said Gatto acted as an industrial relations mediator for many companies in Melbourne and his engagement with M1 was a “straight-up business arrangement – he charges us $30,000 a year”.
On Wednesday, Victorian Premier Jacinta Allan was grilled in parliament about M Group’s presence on state projects.
Asked whether M Group was working on the massive North East Link or Suburban Rail Loop projects, she referred both questions to the government’s overseeing authorities. The Suburban Rail Loop Authority said there was no M Group presence on its sites.
Allan was also asked about the presence of M1 Traffic and Labour – a business with similar past directors and the same address as other M Group businesses – on a supplier list for Goulburn-Murray Water.
The company was one of eight suppliers listed publicly on a current contract for labour hire services for the statutory authority. Allan said the authority was best placed to answer the question.
Goulburn-Murray Water said: “M1 Traffic Control and Labour Hire Goulburn Valley are not currently supplying any services to GMW and they have been suspended from entering any further contracts.”
The premier also pointed to the efforts of Victoria Police’s Taskforce Hawk, which is probing problems within the industry more broadly and made another arrest on Wednesday.
“We have taken strong action. It is working,” she said.
Taskforce Hawk detectives arrested a 36-year-old Lalor man on Wednesday and charged him with blackmail, alleging that he engaged an outlaw motorcycle gang member to demand $663,000 from a business in Brooklyn last month.
A spokesman for the state opposition said: “Jacinta Allan needs to explain why it’s taken until now for any business linked to Mick Gatto to be investigated by the labour hire licensing authority.”
Industry sources said the timing of the Victorian move on the same day as the Queensland action was unrelated and that the Victorian Labor Hire Authority had been investigating M Group for months.
The move against M Group is both a blessing and a curse for the Labor government. It is likely to highlight the proposed cancellation as evidence of action, but the failure to move until after the Queensland commission had announced its inquiry into M Group will invite opposition accusations that it is playing catch-up.
The Victorian authority has limited powers, even after a recent legislative boost, but it has cancelled the licences of dozens of construction companies, including those with links to gangland figures and bikies.
One company recently stripped of its licence, BK Labour, has appealed to the state’s administrative tribunal to have its licence reinstated, even as its owners are facing criminal charges laid by Victoria Police’s Taskforce Hawk.
The moves come after this masthead revealed on Wednesday that the state’s Ombudsman had lashed the agency managing the Big Build for poor record keeping that had impeded its ability to investigate a whistleblower’s corruption allegation.
The Ombudsman’s concerns about the Victorian Infrastructure Delivery Authority’s lax record-keeping were revealed in a briefing note sent last month, which resulted in referrals to the state’s anti-corruption watchdog and auditor general.
“VIDA’s poor financial record keeping and reporting increases corruption risks, and there is a need to strengthen its governance and reporting mechanisms to allow for effective oversight and accountability,” the Ombudsman note said.
The Auditor-General separately on Wednesday released a report that found the government was failing to keep Victorians informed on how its massive infrastructure projects were performing.
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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.
Matt Dennien is a reporter at Brisbane Times covering state politics and the public service. He has previously worked for newspapers in Tasmania and Brisbane community radio station 4ZZZ. Contact him securely on Signal @mattdennien.15Connect via email.