A desperation deal at Donnini’s meant a decade of paying Mick Gatto

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When reports emerged linking his Big Build labour hire business to gangland veteran Mick Gatto, Melbourne businessman Tony Paragalli sought refuge in his safe space: his local footy club.

Paragalli played as a junior and senior at Pascoe Vale, before becoming club president and secretary.

He reckoned people around the club knew who he was and – after the news reports prompted further searing public scrutiny from corruption buster Geoffrey Watson, SC, and a Queensland inquiry about his firm’s financial dealings with Gatto – who he wasn’t.

They knew Paragalli, a father of five who used to work in international shipping and logistics, wasn’t a gangster or a bribe payer.

But the headlines didn’t go away, spiking again on July 31, when Watson testified for a second time about Paragalli’s company, the M Group, at the Queensland commission of inquiry into the CFMEU.

On the same day, almost every major publication in the country ran variations of the headline: “Labour hire firm paid Gatto more than $1 million to secure work on Big Build.”

Again, Paragalli retreated to his beloved footy club.

He also resolved to do something unusual: to sit down with the journalist who had exposed the financial trail between the M Group and Gatto and explain how a company owned by a daggy suburban dad ended up making regular payments to the underworld’s arguably best-known identity.

According to Paragalli, his relationship with Gatto began in 2016 after he left international shipping, entered the labour hire firm industry and began seeking contracts to supply workers on major construction sites.

“We followed all the proper processes and won the tenders fair and square, but when we turned up to start the job, the union would tell us we weren’t allowed to work,” Paragalli says.

That union was the CFMEU and, while it was years away from flexing its muscle on Labor’s signature $109 billion Big Build program, it informally controlled which labour hire companies could access most large project sites.

Paragalli realised that winning a tender was only half the battle. He also had to secure the green light from the CFMEU and tried, unsuccessfully, to do this through the union’s front door.

When his workers arrived on site, the developer ostensibly in charge would send the message that the union was demanding that only its favoured labour hire firms, such as B K Labour, were allowed on the project.

“We’d never seen anything like it before, but we were new to the industry and didn’t have any relationships with the union,” recalls Paragalli.

To end the impasse, figures in industry “suggested we should speak to Mick Gatto”.

Just before making his first $13,200 retainer payment in July 2016, Paragalli met Gatto at Donnini’s in Lygon Street. The restaurant is just a short walk from where Gatto infamously shot dead an underworld hitman in 2004 in an act a jury later accepted was self-defence.

“I’ll do your industrial relations with the union,” Gatto offered Paragalli.

Paragalli was told the annual cost of getting Gatto’s help to operate on building sites in Victoria was $120,000 a year – a fee M Group subsequently paid for a decade, until May 2025.

Paragalli stresses he wasn’t threatened by Gatto and never has been.

He says the gangland figure seemed, at the time, the only viable option if the M Group wanted to operate in Victoria.

“It’s not something we wanted to do,” he says.

“It’s a lot of bloody money, but did we have a choice? Put it this way, we’d spent $3 million on all the equipment to do the job after we won the tender and if we didn’t get paid we would have gone bankrupt.

“So we talked to Gatto, paid the money, and we were allowed back on the site and working immediately. That’s how it works.”

For the M Group, it worked like that for almost 10 years.

Gatto has steadfastly denied wrongdoing in the construction sector, presenting himself as no more than a solution provider for building companies that don’t like “dealing with unions”.

“By employing me, because I got a good relationship with the union, I do their job for them,” he said on a recent podcast.

M Group’s counsel told the Queensland commission of inquiry that the company had paid Gatto substantial amounts to get access to building sites in the face of union opposition.

While he presents it as a rational business decision, when Paragalli is pressed about the ethics of paying a gangland figure to obtain an advantage and influence not available to competitors who refused to pay, he backtracks.

“When you put it like that, I feel foolish. It’s something we shouldn’t have done,” he says.

Similarly, he regrets, for a brief period in 2016, giving Gatto a shareholding in the M Group.

Still, Paragalli is at pains to stress his firm is not and has never been managed or controlled by Gatto, and the gangland figure’s ownership was limited to a parcel of shares held for a few weeks.

An investigation by this masthead has confirmed Paragalli’s claim that Gatto does not run the M Group and its subsidiaries and never has.

But it’s also an uncomfortable fact that Gatto profited from the company via his M Group retainer and used his influence to allow it, too, to profit.

In speaking out, Paragalli is the latest of a growing list of Big Build subcontractors who faced a dilemma: make peace with the union by paying for Gatto’s IR services, or have no relationship with the union and get removed from projects.

He’s one of very few to give a considered interview explaining his decisions, and conceding fault.

“We’re a family business. We just want to turn up and work,” he says. “It was never about winning tenders or getting special access or anything like that; we just wanted to stop the union blocking us doing the job.

“I admit now that I made some poor business decisions. The best I can do is to admit my mistakes and to help the authorities clean up a sector that is vital for the state’s economy.”

He’s now preparing for the inevitable: a subpoena to testify at the upcoming royal commission in Victoria.

Asked by nervous construction industry insiders what he plans to say on the stand, Paragalli gives a short answer: “I will tell them the truth.”

Paragalli had no visibility over how Gatto used the money he was paid by the M Group, or why his influence extended so deeply into the CFMEU before the union administrator declared him persona non grata in 2025.

They are questions that the royal commission will seek to answer, while Victoria Police’s Taskforce Hawk also searches for answers.

Hawk’s top officers recently urged the Victorian government to make it unlawful for gangland figures such as Gatto to operate as union fixers. They noted that until that happens, or police find evidence of bribery or extortion, Gatto’s industrial relations business sits within the bounds of the law.

Hawk reached a crescendo of activity over the past fortnight while probing another gangland figure turned CFMEU fixer, ex bikie boss Tyrone Bell, over unproven allegations he offered serving union officials inducements.

Hawk raided CFMEU headquarters a week ago in connection to its Bell probe.

This masthead can also reveal that on Tuesday, Bell and his fellow former CFMEU delegate Joel Brown were charged by Hawk over allegations they falsified documents.

A search warrant naming the pair describes police suspicions that Bell’s industrial relations and safety business relied on allegedly falsified “certification [or] qualification of educational accreditation”.

Bell has previously denied wrongdoing. The Bell probe has no connection to Gatto.

Hawk’s recent raid of Gatto has led to no charges for the alleged offending identified in the search warrant and which involves allegedly false speeding demerit point declarations.

But there is no doubting that gangland veteran Gatto was immensely influential inside the CFMEU, a fact embodied by his gifting of expensive designer bracelets to a dozen or so union officials before July 2024.

Paragalli insists he refused numerous demands from CFMEU officials to employ friends and relatives on the Big Build, including some which came with demands his firms would be “kicked off the tunnel” unless he did so.

He says he walked away from a contract on the West Gate Tunnel after the CFMEU demanded he employ a bikie gang-linked figure and he refused.

“We didn’t even bother calling Gatto because we were never going to employ them,” he says.

Paragalli also claims that as soon as his firm ceased paying Gatto his regular retainer in May 2025, it was again pushed off sites by the CFMEU.

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