Geoffrey Watson SC, a senior lawyer and integrity expert, appeared before a Queensland inquiry into the CFMEU for the third and final time on 31 July 2026. He used the occasion to push back against the Victorian government's attacks on his corruption report and to clarify a key claim about a Melbourne underworld figure named Mick Gatto (The Guardian, 31 July 2026).

The CFMEU is the Construction, Forestry, Mining and Energy Union, one of Australia's most powerful unions, representing workers in the building industry. Watson's report, titled Rotting from the Top: The CFMEU in Victoria During the Setka Era, was commissioned by a former administrator of the union. It estimated that corruption tied to the CFMEU cost taxpayers at least $15 billion. A redacted version is publicly available on the Queensland inquiry's website as Exhibit GW-13. The report was submitted to the Queensland inquiry on 11 February 2026, discussed in the Australian Senate on 3 March 2026, and examined before a Senate committee on 29 July 2026 (Queensland CFMEU Inquiry transcript, 11 Feb 2026; Australian Senate Hansard, 3 March 2026).

The report found that Victoria's $100 billion Big Build, a massive government infrastructure program, was home to systemic corruption, sexual exploitation, and drug trafficking (ABC News, 29 July 2026). One of its main claims was that Mick Gatto, a well-known Melbourne underworld figure, controls a group of companies called M Group, which received favourable treatment from the CFMEU on Big Build projects. The report also alleged that two company directors, Michael Portia and Tony Paragalli, acted as "dummy directors" on Gatto's behalf, meaning they held the title in name only while someone else pulled the strings. Gatto, Paragalli, and Portia have denied the claims.

On 31 July, Watson adjusted one part of his Gatto claim. He told the inquiry he "probably shouldn't have said Mick Gatto owned them" and accepted that Paragalli and Portia also likely own part of the M Group companies. He stood by his central allegation that Gatto "controls" them (The Guardian, 31 July 2026).

The Victorian government's response to the report was hostile. Attorney General Sonya Kilkenny called it "unfounded." Police minister Anthony Carbines called it "florid ramblings." Watson told the Queensland inquiry that the Victorian government was effectively suggesting he "made it up" (Brisbane Times, 31 July 2026). He called the Allan government's attacks "awful" (Herald Sun, 31 July 2026). Watson also threatened to walk out of the Queensland inquiry (Hunter Valley News, 31 July 2026).

The political fallout was swift. Jacinta Allan stepped down as Victorian premier in the week of 27 July 2026 after losing the support of her fellow Labor politicians. Her colleagues withdrew support partly because she failed to act on the CFMEU corruption scandal. Ben Carroll replaced her and, as his first act on 28 July 2026, committed to a royal commission into the construction industry (The Guardian, 31 July 2026).

Watson noted on 31 July that no one from the Victorian Labor government had contacted him about his report. The Victorian Parliament has formally referenced the report and noted its submission to the Queensland inquiry (Victorian Parliament notice paper).

Why does a royal commission matter here? A royal commission is a formal government investigation with special legal powers. It can force people to testify under oath, seize documents, and refer criminal conduct to prosecutors. Watson's report, no matter how well researched, could only describe patterns and make allegations. Think of it as the difference between a citizen filing a detailed police report and a court having the power to issue subpoenas. Carroll's decision reverses the Allan government's dismissal of the report and puts Watson's findings on a path toward formal judicial scrutiny.

There is also a contrast worth noting between Watson's approach and the government's. Watson retracted his specific claim about ownership while keeping his broader allegation of control. That is a careful correction. The Allan government, by contrast, dismissed the entire report as "unfounded" or "florid ramblings," leaving no room for partial adjustments. The caucus revolt that removed Allan suggests that this all-or-nothing strategy did not hold up politically.

The Queensland inquiry has been the main forum where the report has been tested through formal questioning. Watson's three appearances gave the report a level of official scrutiny that other responses could not match. The Australian Senate has also engaged with the report on two occasions, including before a committee on 29 July, which suggests the findings are gaining attention at the federal level and could put pressure on other states.

The road ahead now depends on the Carroll government's royal commission. What it covers, and whether it examines the CFMEU's dealings with state government contracts, will determine whether Watson's $15 billion cost estimate and his claims about the Big Build program get the full judicial examination that Victoria's leaders have so far avoided.