Michael O'Connor, the long-serving union secretary, denies allegations of misuse of his position as co-chair of a $4.5 billion superannuation fund to benefit the financially troubled manufacturing division of the CFMEU.
Long-serving union secretary Michael O’Connor has denied misusing his position as co-chair of a $4.5 billion superannuation fund to support the struggling manufacturing division of the CFMEU . He defended his conduct on the board of First Super in response to a court-sanctioned ban as a super fund director.
This follows the Australian Prudential Regulation Authority (APRA) suing him last year, alleging he hired a union staffer to work full-time for First Super despite being “aware that the employee continued to undertake a significant portion of work for the CFMEU”.The allegations center around the member and employer services coordinator (MESC) contract between First Super and the CFMEU’s manufacturing division in 2020. APRA claimed O’Connor was secretly involved in negotiating an extension to the contract, instructing the union to increase the fee, and then engaging a consultant to assist the CFMEU with negotiations.In his defense filed with the Federal Court in December, O’Connor stated that he had recused himself from First Super board discussions regarding the contract and had never spoken to other board members about the contract extension. “He did not participate in any discussions or deliberations with the non-conflicted directors or employees of the trustee regarding the specifics of the MESC contract extension,” his defense states. “He did not participate in any decisions regarding the MESC contract, including the MESC contract extension, on the part of the trustee. He declared his interest in the manufacturing division in the trustee’s conflict register.” These court documents are the first public statements from O’Connor on the matter since APRA initiated litigation in September. When contacted by this masthead at a rally outside of paper manufacturer Opal headquarters in Melbourne on Wednesday, O’Connor left the scene and declined to comment. APRA alleges that O’Connor appointed a union delegate, referred to in court documents as BT, to a full-time role as the MESC coordinator at First Super in March 2020, partly to fulfill her role as an organizer for the union. During this time, the manufacturing division of the union was “experiencing financial difficulties, and considering redundancies for some of its employees”, the regulator told the Federal Court. It presented a collection of Slack messages and emails, claiming they show the union secretary deliberately and over a considerable period misused his position as First Super co-chair, constituting a breach of his director duties to act in the best financial interests of super fund members. The regulator stated O’Connor was secretly involved in negotiations on behalf of the union with the “intention of benefiting the union at the expense of First Super and its members’ best interests”. It alleged O’Connor instructed the union’s MESC contract manager to bill the super fund for the coordinator role and then withdrew the advertised vacant position before appointing BT in that role, effective from April 1. While the union boss admitted to providing the CFMEU manufacturing division’s finance and administration committee updates on the negotiations regarding the MESC contract in June, August, and September 2020, he denied involvement in the “ongoing conduct of the negotiation on behalf of the union”. He also disputed APRA’s evidence that the union sent a $125,000 invoice to First Super on March 10, 2020, claiming the fee sought was $31,262.89. “He says that on 25 March 2020, he sent an email to a manufacturing division employee with the initials PG, which approved draft correspondence to be sent to applicants for the First Super coordinator job and draft correspondence to be sent to the applicants for the admin officer job, which explained that the manufacturing division was withdrawing those vacant positions,” O’Connor’s defense states. “Says further that the reason provided in the draft correspondence referred to above for the withdrawal of the positions was due to the COVID-19 pandemic and the consequent disruption across Australia.”In October 2017, First Super and the CFMEU entered into a written agreement known as the Member and Employer Co-ordinator Services Agreement, or MESC contract. Under this arrangement, the union was responsible for managing the employment of the coordinator responsible for recruiting and retaining First Super members, while the fund would pay the union the employee’s fees and reimburse their expenses. Two years later, O’Connor told a union employee, known as CS, the board of First Super had or would approve the contract’s extension without going to tender. He told CS this was “an opportunity to get some more money out of the fund”, according to documents APRA filed in court. APRA has requested the Federal Court to remove O’Connor from the board of First Super, ban him from acting as an officer of any super fund, and impose financial penalties.
Union Secretary Superannuation Fund CFMEU Misuse Of Funds First Super APRA Court Action Member And Employer Services Coordinator MESC Contract
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