A Cycle of Industrial Desperation
Melbourne businessman Tony Paragalli, owner of the labour hire firm M Group, has publicly detailed a decade-long financial arrangement with notorious underworld figure Mick Gatto. The payments, which spanned from 2016 until May 2025, were characterized by Paragalli as a “desperation deal” intended to secure access to major construction projects in Victoria, where he faced systematic obstruction from the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU).
Paragalli’s admission, made in a recent interview, follows intense scrutiny from corruption investigators, including counsel Geoffrey Watson, SC, and a Queensland commission of inquiry. Documents and testimony have confirmed that M Group paid Gatto a $120,000 annual retainer—beginning with a $13,200 payment following a meeting at Donnini’s restaurant in 2016—to act as an industrial relations “fixer.”
This report draws on information published by theage.com.au.
The Cost of Doing Business
According to Paragalli, the payments were not a result of threats, but a calculated business decision to avoid bankruptcy. After winning government tenders, his firm was frequently blocked from sites by developers who claimed the CFMEU demanded the use of preferred labour hire firms, such as B K Labour. “If we didn’t get paid, we would have gone bankrupt,” Paragalli explained. He noted that once the payments to Gatto commenced, his workers were allowed to return to sites immediately.
While Gatto has maintained that he simply provides industrial relations services for companies struggling with union dynamics, the practice has drawn the attention of Victoria Police’s Taskforce Hawk. The taskforce has recently urged the government to criminalize the role of gangland “fixers” in the construction industry. Currently, such payments remain in a legal grey area unless they can be proven to constitute bribery or extortion.
Broader Industry Fallout
The M Group case highlights the systemic tensions within Victoria’s $109 billion “Big Build” infrastructure program. Paragalli, who is preparing to testify at an upcoming royal commission, claims that his firm faced retaliatory action from the CFMEU immediately after ceasing payments to Gatto in May 2025. He also stated that he had previously walked away from contracts on the West Gate Tunnel after refusing union demands to hire associates linked to bikie gangs.
The scrutiny of Gatto’s influence coincides with broader police action against other alleged union fixers. Taskforce Hawk recently charged former CFMEU delegate Joel Brown and ex-bikie boss Tyrone Bell with falsifying documents, an investigation that remains distinct from the Gatto probe. Despite these developments, Gatto has not been charged in relation to the M Group payments, though his influence within the union—symbolized by the gifting of expensive jewelry to officials—remains a central focus for investigators seeking to reform the sector.