THE complex financial structure of Western Australia's militant construction union will come under the spotlight during a five-day inquiry into why the state union appears to have $26 million in assets but no members.
An estimated $200,000 of union funds could be spent on lawyers in the West Australian Industrial Relations Commission, which will attempt to resolve the puzzling state of affairs uncovered by The Australian and a hearing last Friday in which arguments raged over which union members were eligible to vote in its coming election.
But the fiercely contested election of the leadership of the Construction Forestry Mining and Energy Union, in which veteran state secretary Kevin Reynolds faces his most serious challenge in 30 years, has been postponed indefinitely.
The commission's acting president, Mark Ritter, has called a halt to the election, due to be held by postal vote by October 30, so he can rule on evidence that there are no members of the state branch of the CFMEU.
The hearing into the union's membership starts on October 27 and the CFMEU has hired top Sydney silk Richard Kenzie QC.
At the commission on Tuesday, Mr Ritter said he was "not impressed" that Mr Reynolds had failed to show up.
In Western Australia, more than 9000 workers pay about $600 a year to be in the CFMEU.
But the commission heard last week that the workers pay their fees to the federal union, which is a parallel organisation to the state union operating from the same offices in East Perth.
It is the state union that controls substantial assets.
The financial records of the union last year show it had $6.6million in cash and land and buildings worth $4.1 million at December 31. At least $15million more was invested.
Last year's income of $6.43million included an education and training levy worth nearly $2 million and "income from courses" of $2 million.
The CFMEU operates a training centre in Perth's south, which teaches skills such as crane-driving. In enterprise bargaining agreements signed with employers, companies pledge to pay an education and training levy per worker.
Mr Ritter's investigation was sparked by a debate in the commission over three men who wish to stand for election with Mr Reynolds' challenger, former union safety officer Darren Kavanagh.
The candidates on Mr Kavanagh's Renew the CFMEU ticket claim to be financial members of the union but Mr Reynolds claims they are not.
Under cross-examination from the Renew the CFMEU's lawyer, Phillip Laskaris, CFMEU office manager Peta Arnold said all membership fees went to the federal union and none to the state union.
Alleged irregularities on the union's membership roll were revealed by The Australian last month -- 32 workers were registered as "living" at a factory in the city's east.
In another case, 11 members of the same family were registered at an office in the city's north.
While union rules say members can give only a postal address for voting, the industrial relations commission requires a residential address for voting.
Last month, Mr Reynolds moved to strike off almost a third of his 9000 members -- many from outside his city power base -- in a move that would prevent them from voting. Mr Reynolds claimed those struck off were unfinancial on the day the union's voting roll closed in July.
Some paid between $13 and $20 a week for their membership by direct debit or payroll deduction and believed they were financial because they received all union benefits, including the Construction Worker magazine.
One former organiser said it was a method of payment frequently used on suburban and regional sites, where Mr Reynolds's popularity was unclear or untested. The former organiser said Mr Reynolds was popular with and familiar to workers in the city, where organisers ensured members were financial at the beginning of each six-month payment period by visiting them with mobile ATMs.
But Mr Reynolds has rejected this, saying all organisers had mobile ATMs. He said he was compelled by the union's rules to tell the commission who was financial and who was not.
