tip off

AWU actually clawed back dubious Bruce Wilson cash

The murky cash floating around the Australian Workers Union in the mid-1990s continues to astound. The Australian is leaving out important historical context.

Former Victorian Legislative Council president Bob Smith has slammed Fair Work Commissioner Ian Cambridge’s media campaign against Prime Minister Julia Gillard, revealing his former factional rival clawed back $160,000 paid into her former boyfriend Bruce Wilson’s slush fund.

Extracts from Cambridge’s 1995 diary entries have dominated The Australian’s coverage of the Australian Workers Union saga in recent days — a page 1 exclusive on Friday reported that some of the cash had been paid back to employers, but not that the payments were subsequently returned to the union jointly controlled by Cambridge.

Cambridge confirmed to Crikey that “in pretty much every case” the “legitimate” money from the AWU Members Welfare Account No. 1 was re-diverted back to the union. “Wilson and his friends decided to put the money into his so-called members welfare account,” he said. “He returned it, so we wrote to them [the employers] and eventually they sent it all back to me.”

The revelation goes to the heart of the affair documented article-by-article in Crikey: the murky dividing line between legitimate and illegitimate employer payments to unions and the lack of hard evidence that directly proves third-party malfeasance.

In July 1995, Smith placed a freeze on accounts controlled by Wilson after he attempted to draw cheques to send the $160,000 to a mysterious Perth-based “Construction Industry Fund”. Earlier that year, the existing Victorian AWU branch had been dissolved and two branches — a national construction branch headed by Wilson and a “new” Victorian branch headed by Smith — were spun off. Smith assisted Wilson to pay back the money in a legal deal brokered by the two officials’ lawyers.

As first reported by crack Age industrial reporter Joanne Painter 17 years ago, prominent construction firms including Fluor Daniel, John Holland, Thiess, Chamber Consulting and Woodside sent cheques to Wilson for what they believed to be legitimate purposes, including membership fees. But in some cases, they appear to have been paid as a quid pro quo for industrial peace or, in Thiess’ case, to get the union’s OK to use contaminated in-fill on its Western Ring Road site. According to a 1996 affadavit lodged by Cambridge, the account was “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”.

A Victoria Police investigation into the transactions, released under freedom of information, confirmed that while some of the companies refunded the returned money, others kept it “in confusion … until some sort of logical explanation was forthcoming from the union as to its legal entitlement”.

Smith, then the Federation of Industrial, Manufacturing and Engineering Employees-aligned secretary of the Victorian branch, says it is “crazy” his long-time AWU nemesis Cambridge is “trying to claim the moral high ground” when the union ultimately ended up keeping the cash. ”He pursued the money that companies had given Wilson and used [Robert] McClelland to get it back and it’s outrageous and totally immoral,” he said. “It certainly wasn’t clean money.”

At the time, Cambridge accused Smith of covering up Wilson’s transactions. But the irascible Smith says the reverse was true.

Cambridge came in to frustrate my pursuit of Wilson,” he said in an interview with Crikey. “The fact is we did go to the police, I did go to the national executive … we were determined to get that rubbish out of our union. The victor always re-writes history. We were having a very, very difficult internal brawl.”

The Victorian-based fund was separate to the now-notorious WA-based AWU Workplace Reform Association established by Wilson with advice from Gillard in 1992, that was meant to be used for training purposes. Some of that money allegedly ended up being funnelled towards the purchase of a Fitzroy house under the name of Wilson underling Ralph Blewitt.

The Victorian Fraud squad investigated both accounts and numerous others in Wilson’s orbit but ultimately didn’t find enough evidence to press charges. Repeated calls by Cambridge for a royal commission fell on deaf ears.

On Friday, The Australian also reported the “$100,000” in redundancy payments paid to Wilson, Blewitt and Bill “the Greek” Telikostoglou in August 1995, but did not mention those monies were ordered to be repaid 10 months later after a successful Industrial Relations Court challenge by then-joint national president Bill Ludwig. However, it is believed the money was never recovered.

Cambridge exited the field in 1997 when he was appointed to the NSW Industrial Relations Court and much of the legal action died.

The union’s poisonous internal factional dynamic has escaped serious analysis. At the time, Cambridge and Ludwig’s faction was involved in a bitter brawl with Smith ally and fellow joint-national secretary Steve Harrison — aligned with the NSW Right and the FIMEE half of the union — for control. AWU and FIMEE had embarked on a rushed merger in 1992, but the strained factional dynamic — overlaid with Left, Right and state-based loyalties — persisted until 2001 when Bill Shorten was elected unopposed as national secretary and Ludwig as national president.

Cambridge claimed in an interview with Crikey that Smith was lashing out because he fears further diary extracts in The Oz will expose violent threats levelled against him when the duo were at war. ”Mr Smith will be very concerned about his threats of physical violence against me. I would imagine that the revelations of my diary are going to give him a great deal of discomfort,” he said.

But Smith hit back, calling Cambridge’s claims “bullshit”. “If he’s actually suggesting I’ve ever threatened him physically then he’s a liar,” he said.

Smith accused the Ludwig-Cambridge faction of failing to probe the Victorian branch when financial problems first began to emerge in the media 1992. Wilson, then loyal to Ludwig, was acting Victorian secretary at the time.

Indeed, the internal tension in the AWU that continues to inspire Julie Bishop’s question time strategy can be traced back 23 years to the 1989 AWU elections, when Ludwig and Wilson challenged Ernie Ecob and Errol Hodder for president and secretary on a cross-Nullarbor unity ticket.

Wilson was part of a group of late-’80s Left “reform groups” that were challenging the Right for supremacy amid rank and file frustration with the accord, which had tied wages to productivity and hamstrung bargaining. Lindsay Tanner had successfully “turned” the Federated Clerks Union and the Health Employees Federation (No. 2) branch and the Transport Workers Union had also moved, endangering Robert Ray’s and Gareth Evans’ Senate preselections.

In 1989, Wilson fell short in his secretary bid by just 229 votes, 10,746 to 10,975, while running mate Ludwig triumphed. The Right’s Bob Kernohan, a favourite source of sacked 2UE presenter Michael Smith, was tipped out and the Victorian branch was snatched by (the other) Bob Smith, a left-wing organiser from Geelong. Wilson would later fill in for Smith when he took extended leave after the Left split.

A bitter Kernohan launched a five-year assault on his rivals, escalating when Wilson was anointed acting state secretary in 1992 as part of a peace plan hatched by Ludwig to soothe divisions.

Ludwig, who needed Wilson’s numbers to muscle up against the FIMEE forces by marshalling a Queensland/Victoria/WA bloc, remained, until 1995, his greatest supporter and regarded his charge as a potential future prime minister.

Bob Smith (the right-wing FIMEE one) told Crikey that Ludwig’s support led to much mirth on the AWU national executive when the issue of the secret accounts began to unravel. ”I used to challenge Bill at national executive and ask him how his love child’s going now?” he laughed.

Smith says The Australian’s resuscitation of the yarn 17 years on is a blatant attempt to launch a post-facto attack on the Prime Minister under the cover of hard news. ”I’ve got no doubt about that … are they going after Bruce Wilson? Don’t think so. She seems to be the obvious target and is a pretty big fish,” he said.

12
  • 1
    Edward James
    Posted Tuesday, 20 November 2012 at 2:15 pm | Permalink

    And a very smelly fish too! Edward James

  • 2
    Blue Green
    Posted Tuesday, 20 November 2012 at 3:19 pm | Permalink

    Tell you what, Andrew; you give us an explanation (that passes the sniff test and does not bear any resemblance to those Mr. Latham or Ms. Gillard proffered) as to exactly why Ms. Gillard failed to alert the police as to what might have been going on (when she realized it, of course), and I’ll read your offering with an open mind. Until then, sorry

  • 3
    tonyfunnywalker
    Posted Tuesday, 20 November 2012 at 4:38 pm | Permalink

    I wondered why the Australian had gone quiet. I expect an apology Hendley Thomas. Investigative Jouranalism - I suggest you return your reward and emrol in Jouranlism 101 was suggested to the ABC in today’s Australian editorial. The egg is all over everyone’s face and why keep files on a non event.
    This is getting a habit for Hedley Thomas he got Wyvenoe wrong and now the AWB affair wrong. Conspiracy theorist James, find another conspiracy to vent your spleen.
    I suggest the AWC scandal as starters. That should keep you happy for a while.

  • 4
    klewso
    Posted Tuesday, 20 November 2012 at 5:16 pm | Permalink

    With the “resources” they’ve dedicated to this, I’m surprised Limited News didn’t find this out?

  • 5
    Liz45
    Posted Tuesday, 20 November 2012 at 5:22 pm | Permalink

    @Blue Green - So you believe that the PM is guilty as charged by the Australian etc do you? And I suppose it’s those incompetent coppers who’ve let her ‘off the hook’? If you don’t think this, then say so! In almost 20 years no charges have been laid, and this article sheds some more light on the whole saga?

    You WANT to believe otherwise????

    In fact, I’m also willing to await the decision of the relevant police re Craig Tompson as well? We don’t have trial by media in this country to date - I’d like that to continue, thank you! IF there was any alleged illegal activity, a Defence barrister worth his or her salt would ask for the case to be dismissed. SO, the Australian is NOT doing anyone a favour. Of course, if you need to rely on pornographic ‘cartoons’ to demean people you’re a bloody lost cause! The Australian is a national disgrace!

  • 6
    Mark from Melbourne
    Posted Tuesday, 20 November 2012 at 7:08 pm | Permalink

    Bloody hell, hard to keep track of who’s who in this zoo.

  • 7
    Patriot
    Posted Wednesday, 21 November 2012 at 1:34 am | Permalink

    Here’s some more historical context for you. Gillard was still a member of the Socialist Forum while she was helping her union boss boyfriend steal from a fatal accident and death fund. She travelled to Boulder to convince workers to hand over their money to him.

  • 8
    Gavin Clydesdale
    Posted Wednesday, 21 November 2012 at 10:09 am | Permalink

    Dear Mr Crook you need to go Michael Smiths website, ignore the commentary if you will but given your report you may not be aware of all the facts and documents.

    http://www.michaelsmithnews.com/2012/08/the-awu-scandal-bill-gets-the-money-back-but-what-about-bruce.html

    After the money was paid back to the Companies as you have reported, Ludwig went to court to get an order so that it again all went back to the AWU’s legitimate accounts. So the union received back the funds that Wilson scammed of the companies for the work that was never performed. (See the following links, payments for stand over tactics or for potentially putting the health of AWU workers at risk by using asbestos contaminated soil, the latter being one of the triggers for Blewitt to come back to Australia make a statement to the police).

    http://www.michaelsmithnews.com/2012/11/how-wilson-worked-his-job-the-standover-tactics-we-paid-for-industrial-peace.html

    http://www.michaelsmithnews.com/2012/10/the-asbestos-contamination-scandal-a-reference-point.html

    Also don’t confuse the AWU Members’ Welfare Association No 1 fund with the AWU Workplace Reform Association. The latter was set-up using the now PM’s “legal advice” including a supporting letter when the original application was rejected, the former I doubt if Ms Gillard had any knowledge. The use of AWU in the name of the association was crucial allowing Wilson to bank company payments to AWU in the association’s account and transfer to his various AWU funds in Victoria. The AWU-WRA(which MS Gillard was aware of) was not discovered by the Union until later (no investigation commenced until 1996) and money from the AWU-WRA was used to purchase the Kerr street property in Blewitt’s name (illegal use of funds)using a dubious Power of Attorney drawn up by Slater & Gordon and witnessed by Ms Gillard.

    Crucially the property was sold in 1996 with no accounting of the proceeds to the AWU or the authorities. Slater and Gordon and the now PM were aware of the purchase (S&G provided a mortgage in Blewitts’ name of which he was unaware) and failed to inform their client the AWU or the relevant authorities.

    A legitimate question was asked of the PM in Parliament, which she has failed to answer satisfactorily as unlike her response to Ms Bishops specific question on the AWU-WRA there was no investigation into this until 1996. Shouldn’t Crikey be following up this question?

    By the way $5000 is one of the favourite withdrawal amounts from Wilson’s various slush funds. Coincidence? I wonder how many times Wilson told AWU people that he won at the “Casino” or on the “horses” given that one of the main sources of his funding the AWU-WRA was a secret.

    Given that this amount was allegedly given to Ms Gillard by Wilson (via a union official)in July and in mid-August his corrupt activites had come to light within the union and in light of Ms Gillards interview transcript with S&G in September. Other legitimate questions arise that need answers,Crikey needs to ask these questions.

    Did the PM receive $5000 from Wilson in July 1995? Did she return this to Wilson on finding out about his nefarious activities in August or early September? What did Ms Gillard do verify the source of the funds if she retained them?

    I hope you publish this on you website and Andrew, please ask these questions they go to the core of the character of the most powerful person in Australia.

  • 9
    Karen
    Posted Wednesday, 21 November 2012 at 11:43 am | Permalink

    @Patriot - if JG was involved in a conspiracy to steal money, then she would have have been charged, not to mention lambasted in the Oz. Yet another unsubstantiated claim from you…

  • 10
    Patriot
    Posted Wednesday, 21 November 2012 at 9:31 pm | Permalink

    Karen,

    They have to investigate the allegations against her before they charge her. They’re doing that right this minute. They’ll speak to Blewitt on Friday.

  • 11
    Phil Vee
    Posted Thursday, 22 November 2012 at 11:16 pm | Permalink

    Gavin @ 8 wrote….
    Crucially the property was sold in 1996 with no accounting of the proceeds to the AWU or the authorities. Slater and Gordon and the now PM were aware of the purchase.

    How could S&G “account for proceeds” when they did not know some of the money to buy the house came from an AWU fund? The famous cheque was banked in Perth and appeared in S&G’s books as a direct deposit. S&G Victoria never saw it and did not know AWU money was involved.

  • 12
    Andrew Crook
    Posted Friday, 23 November 2012 at 12:57 pm | Permalink

    Gavin, I’m aware of the documents and aren’t confusing the funds. Re-read the story.

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