Cesar Melhem MP is a key figure in one of Labor's most important sub-factions, the right-wing grouping led by federal leader Bill Shorten and his frontbencher Stephen Conroy. He is also the convenor of a group of eight Victorian MPs linked to the Australian Workers Union (AWU).
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Shorten has been central to Melhem's rise from shopfloor to parliament, in 2006 anointing him as his successor as the Victorian secretary of the AWU, one of the biggest union voting blocks in the ALP. Shorten acknowledged Melhem in his maiden speech to federal parliament, describing his Lebanese-born heir as a migrant success story and "a young veteran of the violence in Lebanon".
Melhem is a loyal foot soldier of the Shorten group; his spectacular fall from grace results in part from the questionable schemes devised and deals done, in part, in interests of Melhem's sub-faction.
In 2008, Melhem set up Industry 2020, a slush fund bank-rolled by more than $500,000 from employers and unions at three fund-raisers.
The funds, largely raised from employers, were used to further Melhem's factional interests, through intervening in Health Services Union elections and for Labor branch-stacking.
Melhem's problems started in late 2012 when Fairfax Media revealed the existence of Industry 2020 and its use in factional dogfights.
A state secretary of a Labor-affiliated union such as the AWU can wield real power. Labor unions control 50 per cent of delegates to party state conferences, which in turn elect the all-important committees that run the party and have a big say in who becomes a parliamentary candidate. Perversely, as the influence of union officials on the economy wanes, their grip on the ALP, hollowed out itself by declining membership, appears to tighten.
The AWU itself claims eight state MPs. Melhem is the convenor of the group. But in hearings by the trade union royal commission last week, Melhem's own union turned him, raising doubts about his future as a factional chieftain.
Melhem used his influence in May 2013 to get an easy ride into the state upper house after Martin Pakula moved to contest a lower house seat. Labor did not pause to consider the merits of his move to parliament despite the serious questions raised by Fairfax Media.
His problems deepened when the royal commission into unions was called, and the spotlight swung back on his slush fund Industry 2020.
Just before last November's state election, it emerged Melhem had spent tens of thousands of dollars from Industry 2020 on himself at restaurants, hotels and even cigars. Still Labor stuck with him, and even made him upper house whip, a tribute to the importance of his factional power-base and his role in it.
But more recent probing of Melhem in the royal commission has upped the ante with a series of deals allegedly selling out workers in return for small payments to the union.
A key aim of these deals was boosting AWU membership, at any cost, to increase the union's influence in Labor, and, in turn, to get people such as Melhem and his friends elected.
