A labour hire company has admitted to paying underworld figure Mick Gatto more than $1 million to secure access to Victoria’s “Big Build” infrastructure projects, according to testimony provided to a corruption inquiry into the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU). The admission reveals a direct financial link between a government-contracted service provider and a known organized crime figure, raising urgent questions about the integrity of procurement processes for the state’s largest infrastructure pipeline.
The Payments and the Admission
During the inquiry proceedings, legal representation for M Group acknowledged that the firm had transferred sums exceeding $1 million to Mick Gatto. The testimony indicates that these payments were strategically intended to facilitate the company’s ability to obtain work and secure contracts within the Big Build—the Victorian government’s multi-billion dollar program of rail, road, and civic upgrades.
While the financial transactions were admitted, M Group’s legal team sought to define the nature of the relationship. Counsel for the firm argued that while the directors may have conducted business with Gatto, the company did not operate as “frontmen” for him. This distinction is central to the firm’s defense, attempting to frame the payments as a business arrangement for influence or consultancy rather than a structural arrangement where the company served as a legal shell for Gatto’s own financial interests.
Why It Matters
The admission is significant because it provides a concrete example of how organized crime may monetize influence within the public sector. The Big Build represents one of the largest concentrations of public spending in Australian history; the revelation that a labour hire firm felt the need to pay a million-dollar “premium” to an underworld figure to secure a piece of that spending suggests a systemic vulnerability.
If labour hire firms are paying external “influencers” to bypass standard competitive bidding or to gain preferential treatment, it implies that the meritocratic nature of government procurement is being undermined. Furthermore, it suggests that the “gatekeeping” power within the construction industry may not reside solely with government officials or legitimate project managers, but with figures operating outside the law.
Analysis:
The legal nuance employed by M Group—distinguishing between “doing business” and acting as a “front”—is a calculated strategy to avoid the more severe legal implications of being a proxy for criminal activity. Acting as a “front” typically implies that the criminal entity owns or controls the business in secret, which could lead to charges of money laundering or fraud. By framing the payments as a cost of doing business to “secure work,” the firm acknowledges the payment but attempts to maintain that the company’s operational independence remained intact. However, from a regulatory perspective, the distinction is marginal; both scenarios indicate that public funds are flowing through a pipeline influenced by organized crime.
Background and Context
This testimony is part of a wider, high-stakes investigation into the CFMEU and its alleged ties to organized crime. For years, critics and investigators have alleged that the construction industry in Victoria and other Australian states has been infiltrated by criminal networks that use labour hire firms as vehicles for extortion, bribery, and the laundering of illicit funds.
Labour hire firms occupy a critical position in the construction ecosystem, providing the workforce required for massive projects. Because these firms often operate with less transparency than primary contractors, they have been identified as primary targets for infiltration. The inquiry is specifically examining whether certain firms functioned as proxies, allowing criminal figures to exert control over worksites, influence who gets hired, and siphon off government funds.
The CFMEU has long been under scrutiny for its relationship with these firms and its alleged role in facilitating or ignoring the presence of underworld figures on job sites. The current inquiry seeks to map the network of influence that connects union officials, labour hire directors, and organized crime figures.
What to Watch Next
The focus of the inquiry is expected to shift toward the “Big Build” procurement authorities and the primary contractors who engaged M Group. Investigators will likely seek to determine:
1. Vetting Failures: Why the financial and operational links between M Group and Mick Gatto were not detected during the mandatory due diligence and vetting processes required for government projects.
2. The Nature of the “Service”: What specific “work” or “influence” Gatto provided in exchange for the $1 million. This will determine if the payments constitute bribery, corruption, or a different form of illicit payment.
3. Broader Patterns: Whether M Group is an isolated case or if other labour hire firms operating on the Big Build have similar payment arrangements with underworld figures.
4. Regulatory Response: Whether the Victorian government will implement stricter “fit and proper person” tests for labour hire firms or move toward a more centralized, transparent registry of subcontractors.
Conclusion
The admission by M Group provides a rare, documented glimpse into the financial mechanics of influence within the construction industry. By acknowledging a million-dollar payment to Mick Gatto, the firm has confirmed that the barrier between legitimate government infrastructure projects and organized crime is porous. As the inquiry continues, the central question remains whether this is a symptom of a few “bad actors” or evidence of a systemic failure in how the state manages its most expensive public assets.
Sources:
The Guardian World: https://www.theguardian.com/australia-news/2026/jul/31/geoffrey-watson-integrity-expert-cfmeu-corruption-inquiry-ntwnfb
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Story synopsis gathered from: The Guardian World — source
