Nick Grimm reported this story on Monday, September 1, 2014 18:26:00

MARK COLVIN: The Trade Union Royal Commission has been delving into the seamy underbelly of the Sydney crime scene today as it investigates allegations that officials with the CFMEU were receiving secret commissions from a questionable business figure.



Today's evidence covered three murders, at least two bashings, and accounts of threats and intimidation that took a variety of forms.



The Royal Commission is concerned that one of the witnesses called to give evidence was bashed last week and warned to shut up.



And as Nick Grimm reports, another surprise witness was the mother-in-law of the convicted terrorist, Khaled Sharrouf.



(Extract from Royal Commission)



JEREMY STOLJAR: Could you tell the commission your full name.



KAREN NETTLETON: Karen Nettleton.



NICK GRIMM: Blond, bespectacled and with a broad Australian accent, Karen Nettleton was called to give evidence about her work looking after the accounts of a Sydney business at the centre of today's hearings. She got the job when her son-in-law put in a good word for her with the owner of the company; the Sydney businessman and undischarged bankrupt, George Alex.



Karen Nettleton said her daughter's husband is an associate of sorts with Mr Alex.



JEREMY STOLJAR: By the way did he for Mr Alex, your son-in-law?



KAREN NETTLETON: Yes I believe so.



JEREMY STOLJAR: What was the nature of his position?



KAREN NETTLETON: He never actually told be but I figured it was collecting money or bodyguard orů he never physically said to me this is what he does but I just assumed.



JEREMY STOLJAR: Did he spend to your knowledge a good deal of his time at Mr Alex's house?



KAREN NETTLETON: Yes.



NICK GRIMM: It emerged Karen Nettleton's son-in-law happens to be the convicted terrorist Khaled Sharrouf, most recently seen in images tweeted from inside Iraq where he's believed to be fighting with Islamic State forces.



PM understands that also makes Karen Nettleton the grandmother of Khaled Sharrouf's young son whose photo holding a severed head has created a global outcry in recent weeks. Khaled Sharrouf is one of a number of convicted criminals associated with George Alex's companies, several of which have collapsed owing workers entitlements and other debts.



JEREMY STOLJAR: However the CFMEU continues to deal with Mr Alex and business associated with him.



NICK GRIMM: Counsel Assisting the Royal Commissioner, Jeremy Stoljar, today took a close interest in the accounts of Mr Alex's group of companies, and in particular why cash payments of $2,500 each week were identified on the books as union money.



KAREN NETTLETON: Well maybe that's a typo orů I don't know.



NICK GRIMM: Khaled Sharrouf's mother-in-law Karen Nettleton could shed little light on the arrangements, nor could another witness giving evidence today; a former school mate of George Alex, Jimmy Kendrovski, a onetime professional cage fighter who took a share of one of the businesses in the group of companies.



Today he says he feel used by a deceitful George Alex but he strenuously denied every seeing Mr Alex or his close associate called Joe Antoun paying bribes to CFMEU officials.



JEREMY STOLJAR: Did you ever see Mr Antoun or Mr Alex hand money to a union official?



JIMMY KENDROVSKI: No sir.



NICK GRIMM: Jeremy Stoljar then asked Mr Kendrovski, whether his recollection had been affected by an assault he suffered last Friday inside Parklea prison where he's currently being held in custody.



JEREMY STOLJAR: Has that assault affected your feeling about giving evidence today?



NICK GRIMM: There followed a lengthy pause then...



JIMMY KENDROVSKI: Nah.



JEREMY STOLJAR: Did someone say anything to you about you giving evidence in this commission?



JIMMY KENDROVSKI: No.



NICK GRIMM: Not satisfied with that response Mr Stoljar continued to press the witness.



JEREMY STOLJAR: Is that your honest evidence Mr Kendrovski?



JIMMY KENDROVSKI: I can't comment on it Sir.



DYSON HEYDON: Why can't you comment on it?



JIMMY KENDROVSKI: Because I have a wife and three kids outside on their own and I just can't comment on it.



NICK GRIMM: At the conclusion of his evidence Jimmy Kendrovski asked if he could stay to watch the rest of the proceedings.



The Royal Commissioner Dyson Heydon had to disappoint him, reminding him about his custodial arrangements.



DYSON HEYDEN: I think the gentlemen near the door will probably want to accompany you out of the building.



NICK GRIMM: Another witness giving evidence today was Douglas Westaway, a former New South Wales policeman turned licensed builder, who was until recently director of one of the George Alex businesses. He said he became increasingly uneasy about goings on at the group of companies and the way he was required to provide regular cash payments from the business to Mr Alex and his offsider Joe Antoun even though the business couldn't pay its debts. He was also concerned about the growing number of murders of people associated with Mr Alex.



First there was the killing of Hell's Angel enforcer Steven Mitrovic, followed by the gunning down of standover man Vasko Boskovski. Finally Joe Antoun himself was shot outside his Strathfield home in December last year, as he explained it Doug Westaway concluded that maybe it was time to move on.



DOUGLAS WESTAWAY: It was pretty uncomfortable.



JEREMY STOLJAR: Why was it uncomfortable?



DOUGLAS WESTAWAY: I think everything that had been happening, you know people around you being murdered, it's not a comfortable place to work.



NICK GRIMM: The former Sydney policeman also revealed he'd been severely bashed by Joe Antoun, suffering two perforated eardrums in the process, all because he said he resisted his demands to hand over cash that should have been used to pay workers entitlements.



Another witness, construction worker and CFMEU delegate Jose Mario Barrios, gave evidence about receiving a threatening phone call from George Alex a day after asking a fellow CFMEU official why on earth was the union prepared to associate with him.



MARK COLVIN: Nick Grimm.