Charges against CFMEU pair dropped in blackmail case
Prosecutors have agreed to drop blackmail charges against militant Victorian construction union boss John Setka and his deputy, Shaun Reardon in the biggest blow to the coalition's battle against the union.
When Mr Setka was arrested while driving with his family near his North Melbourne home in 2015, it was the biggest scalp of the coalition’s royal commission into unions.
On Tuesday afternoon, prosecutors agreed to withdraw the blackmail charges that Mr Setka and Mr Reardon have faced, in a back down raising serious questions about the decision to charge the two men.
The move also calls into question the credibility of the royal commission, called by then prime minister Tony Abbott in 2014.
The decision of the Director of Public Prosecutions and police to withdraw the charges, announced on Wednesday morning, was partly based on the performance of two witnesses from construction company Boral during sustained cross-examination in a committal hearing that has been running for several days.
Police had alleged that Boral managers Paul Dalton and Peter Head were blackmailed by Mr Setka and Mr Reardon during a meeting at a café in April 2013, which was arranged by Boral.
The meeting came after the concrete firm had become the subject of a secondary boycott linked to the union’s fight with developer Grocon.
During the committal hearing, Mr Dalton faced intense questioning by defence barristers over his decision to destroy his original handwritten record of the meeting. Mr Dalton produced a scanned copy of his notes but faced intense scrutiny in court about why he had failed to retain the original version.
Mr Head was grilled about whether he knew if Boral had called the meeting with the Construction, Forestry, Mining and Energy Union in an attempt to strike a deal to end the CFMEU’s targeting of Boral’s concrete trucks.
It is understood that authorities believed that aspects of the involvement of Boral’s law firm Freehills in the case may have weakened the prosecution. Freehills played a key role in assisting the company deal with the union and the prosecution, including in helping to redraft witness statements.
The withdrawal of the charges will mean that Boral’s fiery chief executive Michael Kane will not get a chance to testify in the case. Another witness for the prosecution, former CFMEU official Danny Berardi will also not get a chance to testify.
The CFMEU and the wider union movement are certain to seize on the withdrawal of the charges to ramp up their long-held claim that the royal commission and associated police investigations amounted to a political witch-hunt.
It is also possible that Mr Setka and Mr Reardon may seek to launch a wrongful prosecution action against authorities, or pursue civil action against Boral.
The royal commission into the union movement was called by the Abbott government, with its findings later pushed by the Turnbull government. In his interim report in December 2014, Royal Commissioner Dyson Heydon said that Mr Setka and Reardon should be considered for the criminal charge of blackmail.
In the trade union royal commission's final report, released in 2015, the CFMEU was a key focus, and Commissioner Dyson Heydon said the union acted in "wilful defiance of the law".
The CFMEU's association, with the Australian Labor Party has been used to attack Opposition leader Bill Shorten and other ALP leaders. But the union movement has used the case against the CFMEU chiefs to prosecute its own campaign against the coalition, with tens of thousands of members and union supporters blocking the centre of Melbourne recently in support of Mr Setka and Mr Reardon.