CHAPTER 7.3 DONATIONS & EBAS Subject Paragra ph A – INTRODUCTION 1. B – DONATIONS FROM JIANQIU ZHANG’S GROUP OF COMPANIES 5. Jianqiu Zhang’s companies do not have a CFMEU EBA 7. Jianqiu Zhang’s companies: donations to the CFMEU 19. CFMEU NSW’s accounting records 27. Conclusions 30. C – CHARITABLE FUNDRAISING ACT 1991 (NSW) 35. A preliminary objection 36. Summary of the law 39. Application of the law to the facts 41.
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CHAPTER 7.3
DONATIONS & EBAS
Subject Paragraph
A – INTRODUCTION 1
B – DONATIONS FROM JIANQIU ZHANG’S GROUP OF COMPANIES
5
Jianqiu Zhang’s companies do not have a CFMEU EBA 7
Jianqiu Zhang’s companies: donations to the CFMEU 19
CFMEU NSW’s accounting records 27
Conclusions 30
C – CHARITABLE FUNDRAISING ACT 1991 (NSW) 35
A preliminary objection 36
Summary of the law 39
Application of the law to the facts 41
A – INTRODUCTION
1. This Chapter deals with two interrelated issues concerning the
Construction, Forestry, Mining and Energy Union (CFMEU),
Construction and General Division, New South Wales Divisional
Branch (CFMEU NSW). Those issues are:
(a) whether the CFMEU NSW, under the leadership of the
current Secretary, Brian Parker, improperly obtained and/or
managed donations from Jianqiu Zhang and his group of
companies; and
(b) whether the CFMEU, Brian Parker, and Yulei Zhou, an
organiser with the CFMEU NSW, may have committed
criminal offences against the Charitable Fundraising Act
1991 (NSW).
2. The submissions of counsel assisting set out below are accepted.
3. In summary, for the reasons that follow, each of the CFMEU, Brian
Parker and Yulei Zhou may have committed a number of criminal
offences against the Charitable Fundraising Act 1991 (NSW).
4. This Report and all relevant materials have been referred to the
Minister administering the Charitable Fundraising Act 1991 (NSW),
being the Minister for Innovation and Better Regulation, in order that
consideration be given to conducting an inquiry pursuant to Division 1
of Part 3 of that Act into all of the CFMEU NSW’s practices
concerning charitable fundraising.
B – DONATIONS FROM JIANQIU ZHANG’S GROUP OF
COMPANIES
5. Jianqiu Zhang is currently a director of more than forty Australian
companies.1 A number of these companies work cooperatively within
the construction and development sectors, and are referred to as
‘JQZ’.2 The JQZ website3 describes past and current developments
with an estimated total value of more than $2 billion.4 JQZ is
described as ‘a successful Sydney based property development
company with [its] own in-house building business established solely
to undertake [its] construction works’. It has ‘grown substantially’
since its inception to become ‘one of New South Wales’ most
prestigious Australian-Chinese based providers of development and
construction services’.
6. The description on the website accords with descriptions given by
witnesses in their testimony to the Commission. Brian Parker stated
that Jianqiu Zhang was ‘getting very large these days. He’s starting
[…] building units’.5 Nick Cai, himself the director of a successful
business supplying plasterboard and other building materials, stated
that Jianqiu Zhang has ‘a lot of big job sites’ and ‘he’s a quite well-
1 CFMEU MFI-8, 1/10/15, pp 13-30. These include SPC Building Constructions Pty Ltd, Concourse Constructions Pty Ltd, JQZ Holdings Pty Ltd (formerly Tong International Pty Ltd), JQZ Group Pty Ltd and Southpac Constructions Pty Ltd. 2 CFMEU MFI-8, 1/10/15, pp 1, 3, 4, 7, 12. 3 CFMEU MFI-8, 1/10/15, p 1. Note: website reproduced as at 27/9/15.4 CFMEU MFI-8, 1/10/15, p 3 and the webpages cited therein. 5 Brian Parker, 1/10/15, T:78.37-38.
known person in the society’.6 Nick Cai further stated ‘[Jianqiu
Zhang] is a – not just a developer, he is a big developer, he’s probably
the biggest now so far on the market in the Chinese developer […]
probably of whole Australia’.7
Jianqiu Zhang’s companies do not have a CFMEU EBA
7. None of Jianqiu Zhang’s companies are party to a CFMEU NSW
Limited (Concourse) and JQZ Group Pty Ltd each had a number of
employees, whose arrangements are discussed in further detail below.14 11 Brian Parker, 1/10/15, T: 79.8-9.12 Yulei Zhou, 1/10/15, T:31.27-44.13 Yulei Zhou, 1/10/15, T:32.32-42.14 CFMEU MFI-17, 20/10/15.
The bundle of documents produced by JQZ Holdings and related
entities will hereafter be referred to as the JQZ Employee Records.
12. Brian Parker submitted that it would be unsafe to rely on those records,
because they were not source records and were not explored in
evidence, let alone put to Brian Parker or Yulei Zhou.15 These points
have no force. The records are extracts from the accounting records of
the respective companies produced by those companies. Further, there
was no need to put the documents to Brian Parker or Yulei Zhou in
evidence. There was no point in doing so. Inevitably they would have
denied knowledge of them.
13. The records of two of the companies produced as part of the JQZ
Employee Records – JQZ Group Pty Ltd and Tong International Pty
Ltd16 – suggest that those two entities primarily employ staff in office
and project manager roles.
14. The JQZ Employee Records show that at least three companies of
which Jianqiu Zhang was a director each employed numerous workers
who would apparently have been eligible for membership of the
CFMEU; namely Southpac,17 SPC Building18 and Concourse.19
Cumulatively, the payroll activity summaries for these companies list
just over 100 employees and their employment details include job titles
such as ‘labourer’, ‘hoist operator’, ‘crane driver’ and ‘forklift driver’.
15 Submissions of Brian Parker, 28/10/15, paras 21-25.16 Tong International Pty Ltd is now registered as JQZ Holdings Pty Limited (see CFMEU MFI-8, 1/10/15, p 38), but it still appears to keep some records under its former name.17 CFMEU MFI-17, 20/10/15, pp 1-13.18 CFMEU MFI-17, 20/10/15, pp 14-35.19 CFMEU MFI-17, 20/10/15, pp 36-41.
Some of the workers were employed for extremely short periods of
time. However, some were not. Counsel assisting was correct to
submit that the records are clearly inconsistent with Brian Parker’s
repeated assertion that Jianqiu Zhang only had around ‘three’
employees.20
15. For example, the payroll records for just one of these companies, SPC
Building, lists 58 employees who had commenced since March 2012.21
Of those, 38 were casually employed.22 A number of these employees
appear to have worked for very short periods of time. However, of the
people who worked for the company for a significant period
(approximately 3 months or more), a number were paid less than the
hourly rate which was provided for in CFMEU NSW EBAs signed by
an unrelated company (Foxville Projects Group (NSW) Pty Ltd
(Foxville)).23 Between February and October 2014 one casual
labourer was employed by SPC Building with an hourly rate of
$18.31.24 Under a CFMEU EBA signed by Foxville, the most junior
category of construction worker (CW) appears to have been entitled to
be paid an hourly rate of between $26.67 and $27.20, together with
other entitlements, during the same period of time.25 This was not an
isolated example from SPC Building.26 Other casual labourers have
been paid as little as $17 per hour by SPC Building. These included
26. Brian Parker’s evidence was that from the first time he ever met him,
Jianqiu Zhang ‘always said that, you know, “If the Union requires me
to make a donation to assist you with any issue that you think is going
to help the industry, well, I will.”’50 When asked why Jianqiu Zhang
made donations in the realm of $30,000, Brian Parker suggested that he
had done so because he wanted to contribute to decent safety in the
industry.51 In relation to the two $30,000 donations made by Jianqiu
Zhang, Brian Parker’s evidence was to the effect that:
(a) the $30,000 donation on 14 March 2013 was for the purpose
of employing a person to assist in improving crane safety and
in educating and raising awareness about crane safety issues
at a time when there was a problem in the industry concerning
crane safety;52 and
(b) the $30,000 donation on 13 December 2013 was for the
purpose of raising funds for Mates in Construction, which is
an organisation directed towards suicide prevention in the
construction industry.53
CFMEU NSW’s accounting records
27. More light is shone on the purpose of some of the donations by the
CFMEU NSW’s general ledgers.54
50 Brian Parker, 1/10/15, T:85.19-26.51 Brian Parker, 1/10/15, T:87.27-33.52 Brian Parker, 2/10/15, T:91.31-93.11, 94.12-15.53 Brian Parker, 2/10/15, T:90.14-35, 94.12-15.54 CFMEU MFI-16, 20/10/15, pp 13-32.
28. Each of the donations was deposited in the CFMEU NSW’s ‘Trading
Cheque Account’. It is apparent from a comparison between the
general ledger and bank statements that this account is an account with
the Commonwealth Bank of Australia with account number 06 2194
10127561. This is the union’s general trading account. Items of
income deriving from a range of sources of income are deposited into
it. Wages and a range of expenses are paid out of it.
29. In relation to each of the $30,000 donations about which Yulei Zhou
and Brian Parker gave evidence:
(a) As to the first amount of $30,000, the ledger records a deposit
of $30,000 on 20 March 2013 to the Trading Cheque Account
with details of ‘SOUTHPAC MIC’. The inference is that this
is the donation for Mates in Construction which Brian Parker
was referring to and not the December 2013 donation as he
thought. The deposit is recorded as a credit to the ‘Contra –
General’ ledger account. That ledger account also appears to
reflect a number of other donations for Mates in Construction
around March 2013 and July 2013, totalling $51,300. There
is a debit to the ‘Contra – General’ ledger account recorded
on 31 July 2013 for $6,709.09 apparently for a ‘TRADING
MIC DINNER’ and a debit on 13 May 2014 of $44,590.91
with the detail ‘MIC’, which together total $51,300.55
(b) As to the second amount of $30,000, the ledger account
records a deposit of $30,000 on 16 December 2013 to the
55 CFMEU MFI-16, 20/10/15, pp 5, 8.
Trading Cheque Account with details ‘SPC BUILDING’.56
The deposit is recorded as a credit to the ‘CFMEU Fighting
Fund’ general ledger account. There is no other obviously
relevant ledger entry for expenditure in relation to crane
safety programs.
Conclusions
30. Counsel assisting submitted that the evidence supported the conclusion
that some of the donations made by Jianqiu Zhang were solicited and
used for a legitimate purpose. That submission, which was not
challenged, is accepted.
31. Counsel assisting went on to submit that it was an available inference
from the circumstances surrounding the making of other payments by
Jianqiu Zhang that the payments were made in return for the CFMEU
NSW agreeing not to seek to enter into EBAs with Jianqiu Zhang’s
companies. It was submitted that it was somewhat extraordinary that
Jianqiu Zhang would have made a $10,000 donation to the ‘Friends of
Sinn Féin’ in circumstances where he did not know who Sinn Féin
were and Yulei Zhou said he was simply following Brian Parker’s
orders in obtaining the donation. However, on the state of the current
evidence, it was not possible to exclude the possibility that Jianqiu
Zhang made the donations voluntarily and without any intention to
influence or seek to influence an officer of the CFMEU NSW to show
him, or his companies, favour.
56 CFMEU MFI-16, 20/10/15, p 25.
32. Brian Parker made a number of submissions devoted to the proposition
that the Commission should not draw any adverse inferences, let alone
make any adverse findings, against the union, let alone himself, in
relation to their dealing with Jianqiu Zhang.57
33. Brian Parker also submitted that nothing could be taken from the
payment to the Friends of Sinn Féin and that it might have been to
assist the union in the industry or in relation to safety regulations or
concerns.58 Counsel assisting observed that that submission is, to put it
nicely, a very courageous one.
34. However, it is unnecessary to deal with these submissions at length.
On the material, the inference raised by counsel assisting is a possible
one. But there is insufficient evidence to say anything more definitive
one way or another.
C – CHARITABLE FUNDRAISING ACT 1991 (NSW)
35. The evidence also raises the question whether each of the CFMEU,
Brian Parker and Yulei Zhou may have contravened the Charitable
Fundraising Act 1991 (NSW).
A preliminary objection
36. Written submissions filed on behalf of the CFMEU and Yulei Zhou
complained it would be unfair to make any findings about
contraventions by Brian Parker and Yulei Zhou of the Charitable
57 Submissions of Brian Parker, 28/10/15, paras 3-25.58 Submissions of Brian Parker, 28/10/15, para 16.
Fundraising Act 1991 (NSW). The unfairness was apparently said to
arise because counsel assisting did not mention the Charitable
Fundraising Act 1991 (NSW) in opening, because it was not put to
Brian Parker that he or the union had contravened that Act and because
it was not put to Yulei Zhou that he had contravened the Act.59
37. Brian Parker took the same point in his written submissions.60
38. These objections are unsustainable. Even in adversarial litigation
where the ‘rule in Browne v Dunn’ is strictly applied, there is no
requirement to put a legal conclusion to a witness for comment. Here,
the evidence touching on possible contraventions of the Charitable
Fundraising Act 1991 (NSW) fell from the witnesses’s own mouths in
the course of their explanations of certain donations. All affected
persons were on notice that those donations would be investigated
during the hearing. The response of the CFMEU and of Brian Parker
to the submissions of counsel assisting concerning the Charitable
Fundraising Act 1991 (NSW) have not endeavoured to advance any
argument as to why they have not, or even may not have, contravened
the Charitable Fundraising Act 1991 (NSW).
Summary of the law
39. The objects of the Charitable Fundraising Act 1991 (NSW) are to
promote proper and efficient management and administration of
fundraising appeals for charitable purposes, to ensure proper keeping
and auditing of accounts in connection with such appeals, and to 59 Submissions of the CFMEU, 29/10/15, pp 47, 49, paras 6, 16.60 Submissions of Brian Parker, 28/10/15, para 26.
prevent deception of members of the public who desire to support
worthy causes.61
40. In summary, the Charitable Fundraising Act 1991 (NSW) operates as
follows:
(a) Section 9 provides that a person who conducts a ‘fundraising
appeal’ commits an offence unless the person is:
(i) the holder of an authority authorising the person to
conduct the appeal;
(ii) a member, employee or agent of a person or
organisation authorised to conduct the appeal; or
(iii) authorised to conduct the appeal without an
authority.
A person conducts a fundraising appeal if the person
organises the appeal.62 The Charitable Fundraising
Regulation 2015 (NSW), and its predecessor the Charitable
Fundraising Regulation 2008 (NSW), exempt certain
organisations and fundraising activities from the requirement
to hold an authority.
(b) A person who participates in a fundraising appeal which the
person knows, or could reasonably be expected to know, is
61 Charitable Fundraising Act 1991 (NSW), s 3.62 Charitable Fundraising Act 1991 (NSW), s 6.
being conducted unlawfully commits an offence.63 A person
participates in a fundraising appeal if the person solicits or
receives money in the course of an appeal, or assists in
conducting the appeal.64
(c) Subject to the terms of an authority, all monies collected in a
fundraising appeal must be paid immediately into an account
with a bank or authorised deposit taking institution. The
account must consist only of monies raised in the fundraising
appeal, or in other such appeals conducted by the same
persons.65 A person conducting a fundraising appeal, or any
member of the governing body of an organisation on whose
behalf the appeal is conducted who by any act or omission is
in any way concerned in a contravention of these
requirements commits an offence, punishable by a fine of
50 penalty units or 6 months imprisonment or both.66
(d) The Charitable Fundraising Act 1991 (NSW) imposes a
number of accounting requirements in respect of monies
collected in fundraising appeals.67
(e) A ‘fundraising appeal’ means the soliciting or receiving of
money, property or other benefit by any person, if in the
course of or before such soliciting or receiving, the person
represents that the purpose of that soliciting or receiving is or 63 Charitable Fundraising Act 1991 (NSW), s 10.64 Charitable Fundraising Act 1991 (NSW), s 6.65 Charitable Fundraising Act 1991 (NSW), s 20(6).66 Charitable Fundraising Act 1991 (NSW), s 20(7).67 Charitable Fundraising Act 1991 (NSW), ss 22-24.
includes a charitable purpose.68 A ‘charitable purpose’
includes any benevolent, philanthropic or patriotic purpose.69
(f) Certain fundraising activities do not constitute a fundraising
appeal.70 In addition, the Charitable Fundraising Regulation
2015 (NSW), and its predecessor the Charitable Fundraising
Regulation 2008 (NSW), exempt certain fundraising activities
from the definition of fundraising appeal.
Application of the law to the facts
41. A search of the public register kept by NSW Fair Trading discloses
that the CFMEU NSW does not have an authority under the Act. Nor
does it appear that the CFMEU NSW is generally exempt from the
requirement to hold an authority.
42. At least the following donations collected by Yulei Zhou would be
donations collected in connection with a ‘fundraising appeal’ within
the meaning of the Act:
(a) the $3,000 donation collected for the ‘Bankstown Fire
Tragedy’;71
(b) the $30,000 donation collected for Mates in Construction; and
68 Charitable Fundraising Act 1991 (NSW), s 5.69 Charitable Fundraising Act 1991 (NSW), s 4.70 Charitable Fundraising Act 1991 (NSW), s 5(3)71 It should be noted that the union’s ledgers suggests that a number of such donations were solicited from a number of persons: see CFMEU MFI-16, 20/10/15, p 4.
(c) the $30,000 donation apparently collected for a crane safety
campaign for the benefit of the construction industry.
43. On each occasion an offence may have been committed.
44. The absence of an authority under the Charitable Fundraising Act
1991 (NSW) raises one problem. The CFMEU NSW’s treatment of
the donations raises another. That treatment has not been in
accordance with the Act. Even if Yulei Zhou was collecting the
donations in accordance with an authority held by the union, or by
another organisation such as Mates in Construction (which does hold a
current authority under the Charitable Fundraising Act 1991 (NSW)),
the monies should not have been deposited into the union’s general
trading account. The Charitable Fundraising Act 1991 (NSW)
requires such monies to be paid into an account containing only monies
raised from one or more fundraising appeals.
45. The CFMEU submitted that such contraventions would be ‘technical
contraventions of inadvertence’ which ‘pale’ against the merits of the
raising funds for three particular charitable purposes.72 Counsel
assisting contended that the submission is nonsense. It is certainly not
acceptable. The whole point of the legislation is to regulate
fundraising for charitable purposes. The merit or otherwise of the
recipient of the funds is no answer to a breach of the law.
46. Brian Parker submitted that the Commission should not make any
findings of contravention or make findings by reference to
72 Submissions of the CFMEU, 29/10/15, p 49, para 17.
possibilities.73 The approach taken to findings in relation to criminal
guilt were considered in the Interim Report, and are restated in
Volume 1 of this Report.
47. On the material available to the Commission, each of the CFMEU
NSW, Brian Parker and Yulei Zhou may have committed various
offences against the Charitable Fundraising Act 1991 (NSW):
(a) The CFMEU NSW may have conducted a fundraising appeal
in relation to the Bankstown Fire Tragedy, the appeal for
Mates in Construction and the appeal for crane safety without
an authority, contrary to s 9. Brian Parker and Yulei Zhou
have assisted in those appeals and Brian Parker at least if not
Yulei Zhou might reasonably be expected to know that they
were conducted without an authority. Accordingly, each may
have contravened s 10.
(b) In each case, the way in which the monies have been dealt
with may have involved contraventions by the CFMEU NSW
and/or Brian Parker, as Secretary, of the requirements in s 20
of the Act.
48. Having regard to what appears to be a complete failure by the CFMEU
to comply with the Charitable Fundraising Act 1991 (NSW), pursuant
to s 6P of the Royal Commissions Act 1902 (Cth) and every other
enabling power, that that this Report and all other relevant materials
have been referred to the Minister administering the Charitable
Fundraising Act 1991 (NSW), being the Minister for Innovation and
73 Submissions of Brian Parker, 28/10/15, para 27.
Better Regulation, in order that consideration be given to conducting
an inquiry pursuant to Division 1 of Part 3 of that Act into all of the