APRA sues CFMEU manufacturing boss Michael O’Connor over First Super job

Australia’s financial watchdog is set to haul CFMEU boss Michael O’Connor before the courts in a bid to turf him out of an industry superannuation fund over claims he used members’ money to hire an official who was still doing work for the union.

The Australian Prudential Regulation Authority on Friday revealed it had launched action in the Federal Court against Mr O’Connor that could disqualify the First Super director and co-chair from acting as a responsible officer of a corporate trustee or superannuation entity.

Mr O’Connor is national secretary of the manufacturing division of the CFMEU.

The union has in recent weeks copped allegations of criminal links, bullying and standover tactics, with a government-appointed administrator now stepping in to clean up its construction arm.

APRA said its action against Mr O’Connor followed an investigation into a contract between First Super and the CFMEU for member and employer services that ran to 2023.

The watchdog claims Mr O’Connor breached a number of Superannuation Industry (Supervision) Act rules, including those to act honestly, exercise the same degree of care, skill and diligence as a prudent superannuation entity director, act in the best financial interests of beneficiaries, and to prioritise the interests of beneficiaries when in a position of conflict.

It alleged Mr O’Connor approved the appointment of a CFMEU employee to perform a full-time role under the contract, was aware that the employee continued to undertake a “significant portion” of work for the CFMEU and directed or approved the employee carrying out the work for the union.

“Mr O’Connor ... was aware that First Super was paying fees under the contract, which included an amount covering the full-time wage of the employee; and did not inform or seek approval from First Super for the employee to carry out work for the CFMEU or seek to reduce the fees payable by First Super under the contract,” it alleged.

APRA also said Mr O’Connor was involved in the negotiation of the extension of the contract on behalf of the CFMEU in circumstances where he was in a position of conflict.

The watchdog is seeking declarations and penalties against Mr O’Connor.

It also wants court orders to disqualify him from acting as a responsible officer of any corporate trustee or superannuation entity.

The claims come as administrators put the broom through the powerful but scandal-plagued CFMEU, forcing the departure of scores of union officials.

The Federal Government last month passed laws giving it powers to force the union’s construction division — which has been dogged by allegations of widespread corruption and links to organised crime — into administration.

Victorian barrister Mark Irving KC has been tasked with cleaning up the union.

Only the WA and ACT branches have been spared the full force of the intervention after the Government accepted no criminal allegations had been substantiated against them.

The administrators will be charged for at least three years and up to five years after Labor agrees to extend the timeframes to win the Opposition’s support for the intervention.

However, the administrator can release an individual branch early, with Workplace Relations Minister Murray Watt arguing there was no point forcing “a particularly clean branch” to remain under external control.

APRA has also moved to impose stricter conditions on a super fund partially owned by the CFMEU. It put extra licence conditions on United Super and BUSS (Queensland) last month to address concerns about the fitness of board members, processes and how funds were being spent.