AWU scandal - Hedley Thomas

Investigative journalism ... Hedley Thomas in the Australian.
Gillard call would have 'led to fund inquiry'

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  HEDLEY THOMAS 
• FromThe Australian 
• November 06, 2012 12:00AM

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Ms Gillard is being pressed by the opposition to explain why she did not alert the authorities or the AWU to the fund. Source:Herald Sun

ONE telephone call from Julia Gillard or law firm Slater & Gordon would have led to confirmation that a union slush fund she had helped set up was a mystery to its own branch and almost certainly fraudulent, says a former Australian Workers Union boss.

Peter Trebilco, who was joint secretary of the West Australian branch of the AWU in 1995, said yesterday if he had received such a call, he would have done an immediate audit and proved that the AWU Workplace Reform Association fund and its accounts were secret, unauthorised and unlawful. "If Slater & Gordon had contacted us with the name of it, we would have said, 'We will try to get to the bottom of what it is and who the beneficiaries are'," Mr Trebilco told The Australian.

"If we had been told by Slater & Gordon that it was set up by Bruce Wilson and Ralph Blewitt, we would have been immediately more suspicious. We knew about the relationship between Julia Gillard and Bruce, but (not) of the slush fund until after the money in its accounts had disappeared."

Ms Gillard is being pressed by the opposition to explain why she did not alert the authorities or the AWU to the slush fund.The slush fund, which the Prime Minister had helped set up for Mr Wilson, her boyfriend, and his deputy, Mr Blewitt, amassed large sums and was kept secret for four years from 1992.

Tony Abbott said yesterday he was as much concerned about the Ms Gillard's recent responses to the allegations as he was about the events in the 1990s.

Ms Gillard told her firm in a tape-recorded interview in September 1995 that the slush fund was for the purpose of funding union elections. At the time, the WA branch already had its own election fund. Normal union funds can be used to pay for election costs for union officials but the accounts must be transparent and known to officials to ensure they can voluntarily contribute cash from their own pay packets.

The AWU was the client of Ms Gillard and Slater & Gordon, but the slush fund that bore the name of the union was never disclosed to the union's national leadership by either the solicitor or her firm.

In a September 1996 affidavit, the AWU's then head, Ian Cambridge, stated: "My investigations have revealed the following bank accounts (linked to the slush fund) or some of them have been used to hold and/or launder union funds, as a step in the conversion of those funds to unauthorised, invalid, irregular, and possibly illegal uses."

Over several years, Mr Wilson and Mr Blewitt had issued bogus invoices in the name of the fund to major builder Thiess and other companies, which paid hundreds of thousands of dollars into related Commonwealth Bank accounts.

The failure in 1995 of Ms Gillard and the firm to alert the union's national leadership or the branch officials in WA, where the slush fund was formally registered and subject to state laws, meant that police and the union remained unaware of it until 1996. In the intervening months before the CBA told the union about it, the fund accounts were emptied and a Melbourne terrace house bought with ill-gotten cash was sold.

Mr Trebilco, who has not been involved in union matters since 1997, said yesterday he and former joint secretary Tim Daly still wanted to see a proper inquiry into the fraud scandal. Ms Gillard has insisted she acted ethically at all times, and while she helped set it up she was not aware of the workings of the slush fund. In August 1996, Mr Trebilco and Mr Daly said in a joint media statement: "Present officers of the union had no knowledge of the existence of the (slush) account until recently." They said about $385,000 had passed through the account.

Sworn affidavits, Freedom of Information material and other contemporaneous documents show how Mr Cambridge and fellow AWU national leader Bill Ludwig sought to identify all unauthorised accounts but were stymied by a lack of disclosure. The union launched a major inquiry in August 1995 and asked the National Crime Authority and Victoria's major fraud squad to probe Mr Wilson's role in dodgy bank accounts and another slush fund in Victoria. Police in Victoria were never aware of the much larger slush fund in WA.

In an internal review of Ms Gillard's conduct, her partners at Slater & Gordon in August-September 1995 discovered she had given legal advice to help Mr Wilson and Mr Blewitt set up the slush fund in 1992, leading to its incorporation. However, she had told neither the AWU nor the firm about this work until fraud concerns were raised in 1995. She left the firm soon afterwards.

ADDITIONAL REPORTING: JOE KELLY
Well done Hedley Thomas and Joe Kelly.