Nov 16, 2012

Gillard and the AWU slush fund: sorting the smoke from the fire

Thousands of words have been written about Julia Gillard and her past at Slater & Gordon. So what have we really learned, and does any of it count? Here's our cheat sheet (so you don't have to read any of it).

Matthew Knott

Former Crikey media reporter

Since July, the front pages of The Australian -- and more recently The Age -- have been dominated by stories about a 17-year-old scam perpetrated by Julia Gillard's former boyfriend, ex-Australian Workers Union official Bruce Wilson. Conservative commentators and bloggers are convinced it could bring the PM down; the Prime Minister and her allies call it "smear". Crikey has reviewed the news coverage since the issue was revived and tried to distill -- beyond the rhetoric -- what has actually been uncovered ... July 14: The Australian's chief correspondent Hedley Thomas dominates page three of the paper with a story examining former attorney-general Robert McClelland's role in the affair. At the time, McClelland was working as a lawyer and one of his clients was the union's then-national secretary Ian Cambridge. Thomas' 1300-word story, based on an interview with McClelland and archival documents, contains no fresh revelations besides McClelland's claim that an unnamed "third party" may have benefited from the alleged scam. August 3: The Oz runs three pieces by Thomas totalling around 3500 words. On page one Thomas reveals that Ralph Blewitt, a former close associate of Bruce Wilson, is willing to provide a statement to police on the AWU affair in exchange for immunity from prosecution. This is the first time Blewitt, the former legal owner of a Fitzroy home allegedly bought with misappropriated AWU funds, has spoken publicly on the matter. A lengthy feature and news story provide background, including a piece explaining Thomas came to speak to Blewitt through lawyer and amateur union historian Harry Nowicki. August 4: Another Thomas splash: internal police documents from the 1990s show WA police believed Wilson and Blewitt were "crooks" and wanted to criminally prosecute them over the alleged fraud. No charges, however, have ever been laid against either man. August 11: The Oz reports that the managing director of Gillard's former law firm, Slater & Gordon, has asked the AWU and Wilson to waive lawyer-client privilege so the firm can make a public statement about the scandal. August 18: In the first of a Walkley Award-nominated series of pieces, Thomas scores an interview with Slater & Gordon's former equity partner Nick Styant-Browne. This marks the first time any of the firm's senior figures have opened up about the affair and is the first contemporary story to reveal genuinely fresh information about Gillard's role in it. Styant-Browne reveals the law firm launched a probe into Gillard's conduct and "took a very serious view" of her actions. However, the headline -- "Gillard lost her job after law firm's secret investigation" -- appears to be an overreach. As the article makes clear, Gillard resigned after the probe but was not sacked. August 21: The Oz has again got its mitts on a fascinating document: a draft statement by former Slater & Gordon partner Peter Gordon giving his take on why Gillard left the law firm in 1995. According to Gordon, Gillard left after her relationship with other partners had "fractured, and trust and confidence evaporated". He also reveals the firm had considered firing Gillard over suspicions she may have been involved in fraud, but concluded "she should be accorded the benefit of the doubt and her explanation accepted". No evidence has ever emerged, Gordon says, that contradicts Gillard's defence she was naive and had been taken in by a conman. August 22: In a scoop any self-respecting news outlet would publish, The Oz reports on a transcript of Gillard's 1995 interview with Gordon about the affair. The big revelations: Gillard never opened a file when setting up the "workplace reform association"; she knew the association was a "slush fund" set up to help get Wilson and co. re-elected; and she could not rule out that funds from the association were used to pay for her renovations. (Gillard has since stated she paid for the renovations herself.) August 23: Two more front-page news stories from Thomas. The first reports Nicola Roxon did legal work for the AWU after Gillard's departure. The second fleshes out that Gillard wrote the formal rules for the association which emphasised the promotion of safer workplaces and skills training. No mention was made of raising money for union elections. In an accompanying colour piece, reporter Ean Higgins refers to the association as a "trust fund" -- a defamatory (if minor) error that allows Gillard to go on the front foot in a marathon Canberra press conference.
"... in the tens of thousands of words devoted to the story, no evidence that Gillard knew the fund was going to be used for Wilson and Blewitt's personal gain has emerged."
And that's where it ended until ... October 10: Just when the story seemed to have run out of puff, it gets surprisingly resurrected in The Age. Recently appointed editor-at-large Mark Baker has obtained fresh documents showing Gillard managed legal work on the 1993 purchase of the Fitzroy flat (paid for, in part, by funds taken from the workplace reform association). The Age does not allege Gillard knew the funds had been misappropriated. An accompanying 1800-word feature spells out the background of the story, drawing heavily on Thomas' revelations in The Oz. October 13: Baker reveals Gillard had written to the WA Corporate Affairs Commission in 1992 to vouch for the workplace reform association's legitimacy under WA law. According to Baker, this "contradicts claims by Ms Gillard that she did no more than provide limited professional advice about establishing the association at the centre of the corruption scandal". Fairfax also runs a 2655-word feature focusing on Nick Styant-Browne's role in bringing the story to light. October 17: The Age reports informal Slater & Gordon files detailing Gillard's involvement in setting up the workplace reform association have gone missing. October 29: Russell Frearson, a former account at the AWU's WA branch, says the union already had an election fighting fund prior to the creation of the workplace reform association and there was no precedent to establish another one. The fund was operated in secrecy, he says, until it was discovered in 1995. November 14: The Australian rejoins the fray with another Hedley Thomas front-page story. A former AWU official claims he deposited about $5000 cash into Gillard's bank account at the request of Wilson, who had been been gambling the night before. This detail was noted in a diary kept by former AWU national secretary Ian Cambridge in the mid-1990s. November 15: Former AWU official Helmut Gries tells The Oz he can't remember telling Cambridge that misappropriated union funds were spent on renovations to Gillard's house despite Cambridge noting this in his diary. According to The Oz: "There is no evidence that she [Gillard] received union money, or that anyone other than Ms Gillard paid for the renovations to her Abbotsford home in Melbourne's inner-east in the mid-1990s." November 16: Despite evidence they were involved in fraud, Wilson, Blewitt and their friend, Bill "the Greek" Telikostoglou were given redundancy payouts to leave the union in 1995, The Oz reports. According to Cambridge, this helped stymie his investigation into fraud. What have we learned? Despite Gillard's "smear" claims, news reports in The Australian and The Age have been forensic and based on interviews and primary documents. More has been learnt about the murky world of the AWU circa 1995 and the circumstances that saw Gillard leave Slater & Gordon. Despite Mark Latham's insistence in Crikey, the AWU workplace reform association established by Gillard was inherently dubious. This re-election "slush fund", as Gillard described it, was registered as an association to promote occupational health and safety. Some voters may believe this casts doubt on Gillard's character. There is no doubt this story is being pursued -- and reported so prominently -- because of Gillard's involvement in it. But, in the tens of thousands of words devoted to the story, no evidence that Gillard knew the fund was going to be used for Wilson and Blewitt's personal gain has emerged. Or that Gillard was aware of the scam until before it became public. Or that she personally benefited from it. Or that she has lied about her actions. Unless such evidence emerges, it seems the Prime Minister will be able to stick to her refrain that she did nothing wrong and no one will be able to disprove it.

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63 thoughts on “Gillard and the AWU slush fund: sorting the smoke from the fire

  1. wilful

    Thanks for doing this. I couldn’t bear it any more. What a load of bollocks it all is.

  2. paddy

    A big thank you from me too.
    Trawling through all that dross to come up with a readable article. You’re a legend MS!!

  3. Edward James

    It is politics being played out nationally in the peoples court of public opinion. It may find its way into the law courts eventually, we will see. In the meantime the peoples court of public opinion may continue to discuss and consider what is being reported and how that topic may influence our votes. Edward James

  4. The Pav

    So what you are saying is despite years of investigation by a wealthy media corparation with the required investigative skills and resources and a clear hostility to the PM they haven’t actually been able to conjure up anything?


  5. Peter Shute

    It’s an attempt at guilt by association with reams of rumour that do not mean fact and the endless digging up of little tidbits are quite silly.

    If lawyers were to be damned by their client’s actions or indeed their partners, we’d lose half of the legal fraternity.

    Even tricky words like “unless such evidence emerges” implies it’s there for the finding. It’s a beat-up, clear and simple and the combined readership of The Age & Australian are not going to swing an election.

  6. Steve777

    Thank you for this succinct and, as far as I can tell, comprehensive and unbiased summary of the affair.

  7. Edward James

    Someone once said politics is all about (the voters) perceptions. True enough. While paid spin doctors and wordsmiths, make a very good living out of hanging their words on a line to influence us. In a way which makes those words both interesting and influential as opposed to instructive. There are people who can and do focus beyond what is being promulgated on the three course media table, print, radio and television for naive voter consumption. Many of us are being damaged by the rorting, malfeasance, abuse and misgovernance accommodated by those political allsorts and parties whom we have given our votes to in trust only to be betrayed. Edward James

  8. Percy Pigeon

    Clearly Gillard can’t legitimately be Prime Minister in the same way that Barack Obama can’t legitimately be the POTUS. It just doesn’t feel right that they should be, respectively, the leader of Australia and the most powerful man in the free world.
    It definitely isn’t because they aren’t old white blokes. Definitely, definitely not.

    So ‘President’ Obama probably was born in Kenya, or is really a Muslim or an extreme left wing ideologue. It clearly can’t be that some people are uncomfortable with an African American POTUS. Its almost wrong to even suggest such a thing.

    In the same way – there is absolutely no sexism in Australia today. Why, don’t we all know that many, many adult men are married to women? Some even have daughters! I don’t know why people would want to suggest that some just can’t accept Gillard as Prime Minister because she’s a woman. And it certainly has nothing to do with Rupert. So she must have done something grubby in this union affair. Its the only way to explain the nagging discomfort we have about her being in charge. Because none of us are sexist at all, lordy no.

    We would treat a man just the same, of course we would!
    Don’t we all remember how John Howard’s prime ministership was brought down by favours he did for members of his family? How these matters – Car parking for his daughter, largesse for his brother’s business – were pursued and pursued in the media until the poor man had no choice but to resign. We all remember that, don’t we?

  9. Dogs breakfast

    Now that the Oz has devoted so much resources to this misnamed union slush fund, I look forward to their intensive and thorough expose on the use of trust funds by the great and good captains of industry and the mega wealthy. No doubt they are all clean as a whistle and none of them were set up as tax dodges but in fact are genuinely for little freddy’s cubby house expansion plans and college fund.

    Meanwhile the Health Services Union have been mired in allegations of the rorting of millions and there is an ICAC inquiry into ministerial dealings which may have led to $100m windfalls for politicians and their families.

    Boy that $5000 put into her bank account 17 or so years ago truly deserves a Royal Commission of its own.

    Unfortunately there is a follow on effect from this. I’ve told the spouse that I won’t be able to give her any cash any more or transfer any money to her account, in the unlikely event that either of us wants to become Prime Minister one day.

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