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Although Gillard now claims that the questions raised about her involvement in slush fund activities around the mid 1990s “boil down to nothing”, Coalition leader Abbott has for (I think) the first time made a substantive comment by suggesting that there are “issues about what happened back in the 1990s with the slush fund” ... “of union governance and how these matters are handled by the current government” ... “and about the truthfulness of the answers”. He might have added “and about the role of unions in modern day society”.

Importantly also, former ACTU head, Bill Kelty, has now emerged with an effective endorsement of Minister Shorten’s comment on ABC that Wilson’s establishment of a slush fund was “inappropriate”. Whether or not Gillard can justifiably claim to have had no knowledge of slush fund activities, she surely ought to be able to agree on this.

My attention has also been drawn to an affidavit sworn by Bob Kernohan in 2010 about activities within the AWU in the 1992-95 period when he was then President of the Victorian branch. Kernohan claims financial fraud, as reflected in the establishment by AWU officials (including Wilson) of unauthorised accounts, was rampant in that period. The affidavit refers to Shorten’s involvement in the discussions about eliminating the fraudulent activity.

It now appears that more than one SF was established and the Herald Sun suggests that they received $1 million from their activities. Kernohan’s affidavit refers to “well in excess” of a million.

In his article Hedley Thomas does not offer an estimate of the total inflow but he suggests the SFs were a “pot of gold ...stuffed with cash” and “large cheques from companies”. According to Thomas (who appears to have accessed the SFs past bank accounts), numerous withdrawals in large lumps were made. These included one for $15,000 in April 1995, of which $5,000 was in cash and $10,000 was in a bank cheque payable to the builder who was involved in the renovations to Gillard’s worker’s cottage in Abbotsford. Thomas notes that the bank cheques of $3,780 paid to the builder by Gillard were paid several months later than the $10,000 cheque.

This analysis by Thomas raises a question about Gillard’s most recent claim that she herself paid for the renovations: her initial claim (as recorded in the “farewell” interview with Slater& Gordon partners in September 1995) was that she could “not categorically rule out that something at my house didn’t get paid for by the association” ie the SF. In an earlier report Thomas also noted that an AWU staffer had (Wayne Hem) been instructed by Wilson to pay $5,000 into Gillard’s account in 1995.

Blewitt has not yet released his statements yesterday to the Vic police on his version of what happened in regard to the operations of slush funds by Wilson and himself under the name of the AWU. However, while the fraud squad is examining whether the information would justify taking action, presumably of a criminal nature, given that Blewitt has presumably been given an immunity of prosecution it is unclear against whom any such action might be taken. The difficulty of obtaining satisfactory evidence about events in the mid 1990s may prevent any such action.

This is relevant to some of the latest media commentary that no smoking gun has emerged in regard to Gillard (the latest reports in The AGE and AFR hints at the possibility that Fairfax Press may have agreed to “broaden” its comments following the reported contact with its CEO by Gillard). But there is not necessarily a single damning offence here: rather (as I suggested on Thursday last) it goes to the integrity of the Prime Minister.


Bill Kelty joins critics of AWU fund as Julia Gillard fights back

Joe Kelly and David Crowe, The Australian, November 24, 2012

FORMER ACTU secretary Bill Kelty has criticised as "inappropriate" the use of a secret Australian Workers Union fund in the 1990s as Julia Gillard fights off attacks about her part in the affair.

Mr Kelty backed cabinet minister and former AWU leader Bill Shorten in declaring the fund to be "out of bounds" but added that the attention on the affair was a distraction from more pressing issues including economic policy and border protection.

Caucus members said Ms Gillard should make a statement to parliament about her link to the fund, while Tasmanian independent Andrew Wilkie also said she should answer "outstanding questions" about her past.

Setting her strategy for a brutal week in federal parliament on Monday, Ms Gillard sought to tough out another round of Coalition attacks on the grounds that the entire matter boiled down to "absolutely nothing". But the opposition plans to continue its interrogation of Ms Gillard over her role as a salaried partner at Slater & Gordon in the 90s in giving advice to help set up an association for her then client and boyfriend, Bruce Wilson.

The association, which Ms Gillard later described as a "slush fund" for the re-election of union officials, was used by Mr Wilson and his bagman Ralph Blewitt to defraud the AWU of hundreds of thousands of dollars. Mr Blewitt yesterday gave Victorian police three written statements about his involvement in an affair on condition that none of the material could be used in court against him. Ms Gillard has repeatedly denied wrongdoing, saying she had no knowledge of the workings of the fund.

Deputy Opposition Leader Julie Bishop vowed last night to question Ms Gillard closely about her professional conduct as a lawyer, in a clear escalation of the Coalition strategy when parliament resumes on Monday.

In particular, the opposition has been pressing Ms Gillard on whether she should have informed Slater & Gordon's client, the AWU, about the existence of the slush fund when the firm became aware the union and police were investigating alleged fraud by Mr Wilson involving a separate Victorian fund.

Mr Shorten told the ABC's Lateline this week that the fund was "unauthorised", "inappropriate" and "out of bounds" but added that he was satisfied with Ms Gillard's explanations about the matter. Mr Kelty said he had a very high regard for Mr Shorten's views and that most people in the unions would have regarded those kind of funds as being inappropriate.

"If they're not authorised, then they're not known, they're secret and nobody knows what purpose they're for," he said. "All I can say is that unions in my experience were overwhelmingly frank and honest and raised their money in those ways." Mr Kelty, who led the labour movement at the time of the AWU affair in the 90s, said he had not examined the issue in detail and did not know of the fund's existence at the time.

It is alleged that Mr Wilson and Mr Blewitt used the fund - the AWU Workplace Reform Association - to collect money from companies, which said later they thought it was going to legitimate purposes. Some of the cash was allegedly used to pay for a Melbourne house that Mr Blewitt bought with a mortgage taken out through Slater & Gordon.

While Ms Gillard has denied being in charge of the conveyancing for the house, which Mr Wilson lived in, she faced questions yesterday over a Commonwealth Bank letter addressed to her at Slater & Gordon in March 1993 that suggested she knew about the mortgage insurance arrangements for the property.

Former Slater & Gordon partner Nick Styant-Browne told ABC's 7.30 there was "absolutely no doubt" that Ms Gillard not only knew of the Slater & Gordon mortgage in March 1993 but was involved in helping to set it up.

The Prime Minister said yesterday this only showed that she could not recall events when asked about them many years ago. "What this boils down to is that 17 years ago I couldn't recall events that happened 2 1/2 years earlier. That's what it boils down to," she told reporters in Melbourne. "And let's be very clear that the event I couldn't recall, the matter I couldn't recall, related to Slater & Gordon issuing a mortgage. Not a matter associated with any union fund or account."

Ms Bishop said last night that in her "20 years experience as a practising lawyer, my observation of her conduct is that it ... did not meet the standards expected of a partner in a law firm".

She said she would ask Ms Gillard the sorts of questions that the AWU should have asked in the 90s and which the union's former leader, Ian Cambridge, wanted answered at the time.

One senior government source said the Prime Minister's strategy was clearly not working, adding: "This is something that could affect the future of the government."

The missing pieces that shadow a Prime Minister

The Age, November 24, 2012, Mark Baker

IF JULIA Gillard is indeed innocent of any wrong-doing during her three-year professional and personal association with union ratbags Bruce Wilson and Ralph Blewitt in the early 1990s - and there is still nothing in the public domain to refute her insistence that she is - then the Prime Minister is a woman grievously wronged.

By her impassioned account, Gillard has been a victim for much of the past 20 years.

Between 1992 and 1995, when she was a salaried partner at law firm Slater & Gordon and senior Australian Workers Union official Wilson was her boyfriend, she was his unwitting victim - providing legitimate legal advice while her lover ripped off hundreds of thousands of dollars from the union ''slush fund'' she helped set up, including more than $100,000 spent on the Fitzroy unit she helped him find and buy in the name of his crony Blewitt and where they frequently cohabited.

Since the scandal broke in 1995 and she came close to being sacked for keeping her partners in the dark about much of her work with Wilson and Blewitt, Gillard has been a victim of another kind, a casualty of smear - unfounded allegations and innuendo stoked over the years by bad or biased journalists, political opponents inside and outside the Labor tent and, most recently, by those ''nutjobs and misogynists'' abroad on the internet.

On each of the many occasions that the AWU scandal has resurfaced to shadow her political rise since, Gillard has successfully fought it off with a mixture of indignation, denial and anguished denunciation of those with the temerity to raise it. Always, she has been the victim.

The problem the Prime Minister now faces - fairly or unfairly - is that the weapons she has used to defend herself for 17 years are failing. And this is now shaping as a potentially serious problem not just for her but also for the party she leads on the cusp of a tough election year.

Since the controversy was reignited in August with the release of a highly unflattering transcript of the September 1995 meeting between Gillard and the senior partners of Slater & Gordon - who were angered by the work she had done for Wilson and Blewitt without their knowledge and without formal files having been kept or fees charged - the PM's difficulties have multiplied.

A bravura media conference in late August - which she ambitiously declared to be her last word on the matters - brought respite. But since then a story that previously was mostly the preserve of The Australian newspaper and a bunch of bloggers has gone viral.

Now all the mainstream newspapers, radio stations and TV networks are engaged to varying degrees and the ABC - pricked perhaps by accusations of partisan neglect - has arrived belatedly on the scene. At the same time, the federal opposition, hitherto content to see the media make the running, can smell blood and has decided to mount a concerted campaign against the Prime Minister on the issue, a campaign that is expected to dominate question time when Parliament resumes next week for its final sittings of the year.

All of this, of course, might be judged no more than political pyrotechnics in the absence of serious new revelations. But while there is no sign of the smoking gun that Gillard's most trenchant critics are convinced exists and are in search of, there have been several developments since August that question key aspects of Gillard's account of her conduct in the early 1990s and are likely to make politically untenable her continued stonewalling.

The most recent is the release to The Age this week of a further section of the transcript of Gillard's September 1995 meeting with the Slater & Gordon partners in which she denies any knowledge of a $150,000 loan extended by the firm to complete the purchase of the Fitzroy property. Yet the file of the conveyancing work includes a Commonwealth Bank letter from March 1993 that shows she personally sought and obtained a certificate of currency for insurance that was a prerequisite for the loan.

Gillard says she has no recollection of the letter and denies there is a contradiction between it - notwithstanding other file evidence of her involvement with aspects of the mortgage - and her statement to the partners. But Nick Styant-Browne, the former partner who released the transcript and headed the firm's commercial department in which the work was done, told the ABC there was no doubt Gillard knew about the mortgage and took steps to facilitate it.

Her lack of recollection about such a critical aspect of the financing of the Fitzroy property sits uncomfortably with her open admissions earlier in the discussion with the partners that it was she who brought the work to the firm on behalf of Blewitt the investor and Wilson the tenant, she who went house-hunting with Wilson, and she who drafted the power-of-attorney Wilson used to buy it.

Gillard has also not answered new information challenging her assertion that she provided only passing legal advice on the formation of the AWU Workplace Reform Association - the entity from which Wilson stole more than $400,000. The Age revealed last month that a letter she wrote to West Australian authorities was pivotal in gaining approval for a body described at the time as an association to promote workplace safety and training but which she understood all along to be a union slush fund.

Her failure to open a formal file on the work or to consult with her senior partners about it was to be a trigger for her exit from Slater & Gordon. ''This was not passing advice to a rank-and-file union member,'' Styant-Browne said this week.

Gillard has yet to reconcile her insistence in August that the Workplace Reform Association was - before it was comprehensively rorted - a legitimate vehicle for funding union election campaigns, with what her cabinet colleague and former AWU national secretary Bill Shorten told Lateline on Wednesday: ''That account was unauthorised by the union and it was an inappropriate account, that account, as far as I can tell. So that was out of bounds.''

And Gillard has also still not reconciled her August statement to journalists - ''I paid for my renovations'' - with what she told the partners in 1995 when challenged about alleged payments for renovations on her Abbotsford house: ''I can't categorically rule out that something at my house didn't get paid for by the association or … by the union or whatever.'' If she was unsure in 1995, how can she be sure in 2012? And why was she open to the possibility of misappropriation from ''the association'' in 1995 when police didn't confirm that it had been corrupted until the following year?

The arrival back in Australia this week of the infamous Ralph Blewitt has further complicated matters for Gillard. Blewitt is a confessed fraudster with no shortage of critics. But he remains a central figure in the scandal and now police in both Victoria and WA are open to his offer to ''tell all'' about the events in which he was intimately involved.

A year that ought to be ending on a high for Gillard with a lift in the polls and a range of policy problems banished or defused, now seems certain to finish back in the shadow of events two decades ago. More alarming for Labor is the prospect that the issue will now bleed into the new year, souring her and its fortunes as the election closes in.

Mark Baker is editor-at-large of The Age.

PM hits back at AWU scandal ‘smear campaign'

Steve Lewis, Herald Sun, November 23, 2012

Prime Minister Julia Gillard faces a gruelling last session of Parliament as the Opposition plans to raise new allegations over the Australian Workers Union scandal.

Senior Opposition sources last night said they were considering releasing new claims relating to the controversy during the final session of Parliament next week.

The warnings came as senior Labor figures raised concerns the AWU scandal was threatening the Government’s recent political momentum.

Ms Gillard was in a relationship with former AWU state secretary Bruce Wilson when he masterminded a fraud involving the misappropriation of up to $1million 17 years ago.

Former AWU official Ralph Blewitt yesterday delivered a 10-page statement to Victorian fraud squad detectives, including allegations that cash from a union “slush” fund was used to pay for renovations on Ms Gillard’s former property in Melbourne.

And, while the Prime Minister dismissed the attacks as a “smear” that “boiled down to nothing”, Mr Blewitt signalled he was willing to cooperate with West Australian police if they also decided to investigate the scandal. Mr Blewitt spent almost two hours with Victorian detectives.

Asked whether his statement to police could spell trouble for Ms Gillard, Mr Blewitt said “that will be for others to decide based on the evidence”.

The PM hit back over “this whole campaign of smear (that) actually boils down to nothing”.

She dismissed concerns raised over a discrepancy over her recollection of a $150,000 mortgage from Slater& Gordon, which was used to help buy a property in inner Melbourne in 1993.

The purchase was allegedly partly funded with union cash from the “slush fund” – officially titled the AWU Workplace Reform Association – which Ms Gillard had helped establish.

Mr Blewitt is understood to have told police about his role in delivering cash to Ms Gillard’s ex-boyfriend . According to Galbally Rolfe law firm, Mr Blewiit told police he was the “authorised officer of the association (and) applied to incorporate the association to the Western Australian Commissioner of Corporate Affairs following legal advice from Slater& Gordon”.

He also gave information to police about the $230,000 purchase of a property in Fitzroy in early 1993, including details of a “power of attorney” he signed to transfer ownership of the property to Mr Wilson

AWU scandal: PM uses ‘cannot recall’ excuse

AFR 23 Nov 2012, Pip Freebairn, Lucille Keen and James Massola


Prime Minister Julia Gillard says she does not remember seeing documents in 1993 relating to a mortgage for a property allegedly partly paid for with money from a union slush fund.

A former partner of law firm Slater & Gordon has accused Ms Gillard of misleading senior partners in 1995 over her part in the loan arranged through the firm.

But the Prime Minister on Friday told reporters in Melbourne she could not remember seeing a letter from the Commonwealth Bank of Australia which, it is claimed, shows that Ms Gillard knew S&G had provided the mortgage. The letter was previously released as part of S&G’s file on the property deal.

“I was not the solicitor or partner for the conveyancing file,” Ms Gillard said on Friday.

A spokeswoman for the Prime Minister later said Ms Gillard had not been in contact on Friday or previously with police in two states involved, Victoria and Western Australia, regarding allegations about an Australian Workers’ Union officials’ slush fund. Ms Gillard had also not engaged legal counsel in relation to the allegations and “has no reason to seek advice”.

The house in Fitzroy was bought by Ralph Blewitt, a colleague in the AWU of Ms Gillard’s then boyfriend Bruce Wilson, allegedly using funds from a union slush fund Ms Gillard helped to establish while working as a lawyer at the firm.

“Seventeen years ago I gave my best recollections of something that happened 2½ years earlier,” Ms Gillard said on Friday. “It is not remarkable that I didn’t have full recall of documents relating to a file I didn’t run.

“What this all means is that this whole smear campaign boils down to absolutely nothing. [There’s] not been one substantiated incident of wrongdoing put against me in this whole campaign of smear,” Ms Gillard said of accusations that surround her admitted involvement with the fund.

Former S&G partner Nick Styant-Browne told the ABC’s 7.30 program on Thursday night that Ms Gillard told senior partners during her exit interview from the firm that she learnt only in August 1995 it had given a mortgage loan to buy the Fitzroy property.

“There is absolutely no doubt that Ms Gillard not only knew of the S&G mortgage in March of 1993, but was specifically involved in taking steps to facilitate that mortgage,” Mr Styant-Browne told the ABC.

The news came as the Victoria Police fraud squad confirmed it was looking at a union corruption case but would not name those involved.

Mr Blewitt spent two hours with his lawyer, Robert Galbally, on Friday morning making a statement to Victorian fraud squad detectives in Melbourne. Mr Blewitt has previously admitted he engaged in fraud with Mr Wilson, who was then AWU Victorian secretary, by issuing bogus invoices and receiving hundreds of thousands of dollars in the 1990s.

The federal Coalition on Friday called on Ms Gillard to make a statement to Parliament next week to explain her links to the union fund. “There are issues about the truthfulness of the answers the Prime Minister has given,” Opposition Leader Tony Abbott said.

Ex-union boss tell his side of 'slush fund' story

The Age, November 24, 2012, Mark Baker

DISGRACED former union leader Ralph Blewitt has given sworn statements to Victorian police that contain allegations about a payment to a building contractor at an Abbotsford house owned by Prime Minister Julia Gillard in the early 1990s.

During a three-hour meeting with fraud squad detectives, Mr Blewitt also gave details about the establishment of an Australian Workers Union slush fund and the purchase of a Fitzroy property partly bought with more than $100,000 stolen from the fund.

Lawyers representing Mr Blewitt said he declined to make public details of the specific allegations, which were made after he was given guarantees that the information would not be used against him in any future prosecutions.

''He's made three sworn statements to police. The police are now going to investigate the matters outlined in his statements,'' said Robert Galbally of law firm Galbally Rolfe.

Victorian police are considering reopening a formal investigation into allegations involving more than $400,000 stolen from the West Australian-based AWU Workplace Reform Association by Ms Gillard's former boyfriend and AWU official Bruce Wilson.

The Fitzroy property was bought by Mr Wilson in the name of Mr Blewitt, who has admitted to fraud involving stolen union funds.

At an August media conference Ms Gillard rejected persistent allegations that money from the Workplace Reform Association had been used for work on her Abbotsford house.

''I paid for my renovations,'' she said.

Ms Gillard on Friday attacked fresh revelations about her involvement in legal work associated with the purchase of the Fitzroy property.

Fairfax revealed online on Thursday evening that Ms Gillard told her law firm partners at Slater & Gordon in 1995 that she knew nothing about a $150,000 mortgage from the firm for the purchase, despite having been involved in its arrangement two years earlier.

A 1993 bank letter shows that Ms Gillard - then a salaried partner with Slater & Gordon - received an insurance certificate of currency, which was required for approval of a $150,000 mortgage provided by the firm's loan department.

''This whole campaign of smear actually boils down to absolutely nothing. Anybody that's got an allegation of wrongdoing by me of any substance, please feel free to put it,'' she said. ''Let's also be clear this wasn't a file that I ran. I was not the partner in charge of it. I was not the solicitor operating it. And so I don't think that it's remarkable in any way that I wouldn't have full recall of documents that were on a file that I didn't run as a solicitor.''

Opposition Leader Tony Abbott said: ''I think all of us would be happy to give the Prime Minister the benefit of the doubt, but in order to do that she has to give us a full explanation. What we've had from the Prime Minister over the last several weeks is just a lot of stonewalling. There are issues about what happened back in the 1990s with the slush fund. There are issues of union governance and how these matters are handled by the current government. And then there are issues about the truthfulness of the answers Julia Gillard has given as Prime Minister.'' With AAP.

Blewitt tells police of AWU role

Pia Akerman, The Australian, November 24, 2012

FORMER AWU bagman Ralph Blewitt yesterday gave Victorian police three written statements about his involvement in an alleged slush fund scandal, on condition that none of the material could be used in court against him.

One of the statements that Mr Blewitt handed to detectives concerned the operation of the Australian Workers Union Workplace Reform Association and the conduct of people involved in renovations at Julia Gillard's former Melbourne home.

Mr Blewitt and then AWU official Bruce Wilson set up the association in 1992 with legal assistance from Ms Gillard, who was working at Slater & Gordon in Melbourne. She was also in a romantic relationship with Mr Wilson at the time.

The Prime Minister has admitted giving advice on the incorporation of the association for Mr Wilson, later describing it as a "slush fund" for the re-election of union officials. She has also admitted failing to open a file on Slater & Gordon's computer system in relation to the work she did, despite the AWU being a client of the firm.

Ms Gillard has repeatedly denied wrongdoing, saying she knew nothing of the operations of the fund, which was used to siphon about $400,000 from building company Thiess with bogus invoices issued by Mr Blewitt and Mr Wilson for work that never occurred.

Law firm Galbally Rolfe, representing Mr Blewitt, outlined the areas of his statements to police.

One of the statements covered "the operation of the AWU Workplace Reform Association between 1992 and 1995, including the conduct of various parties involved in the renovation in 1994/5 of a property owned by Ms Gillard and located at 36 St Phillips Street, Abbotsford", the firm said.

Ms Gillard has denied that any money from the slush fund was used to renovate her home.

Mr Blewitt also gave police information about the purchase of a townhouse in Kerr Street, Fitzroy "in which Slater & Gordon acted as his lawyers in the transaction to purchase the property and acted as his lawyers in a loan in the sum of $150,000 secured against the property".

About $100,000 of money from the AWU Workplace Reform Association fund was funnelled into the purchase of the Fitzroy house, which was bought in Mr Blewitt's name for Mr Wilson's use. Ms Gillard attended the auction.

Mr Blewitt said he planned to return to his home in Malaysia next week, after parliament resumed, because he wanted to see Ms Gillard's reaction to further questions about the scandal. He said: "I'm ready, willing and able to make myself available to either the Victorian police should they request me to return to Australia . . . and I will make myself available to the West Australian police at some time in the near future."

West Australian police have requested an interview with Mr Blewitt as they consider whether to reopen their 1996 investigation into the AWU fraud.

Members' fund a pot of gold official plundered at will

Hedley Thomas, Pia Akerman, The Australian, November 24, 2012

CASH was king in Australia in 1994 and 95. For a couple of years, in which mortgage rates pushed above 10 per cent and national unemployment rates were not far behind, Bruce Wilson ruled.

The union official controlled two secret slush funds, stuffed with cash from major employers who provided the work performed by members of the Australian Workers Union.

None of the money in the funds was earned in the traditional way by Mr Wilson or the members of Australia's oldest union.

It was quietly doled out to Mr Wilson's slush fund in Victoria -- the quaintly-named AWU Members Welfare Association No 1 account -- in large cheques from companies such as Woodside (through its solicitors, Phillips Fox) and construction groups Thiess, John Holland and Fluor Daniel.

Those companies and several others relied on Mr Wilson -- who as state secretary held sway over members of the AWU in Victoria and elsewhere -- to complete their major building projects without industrial stoppages.

Workplace unrest was profit-killing.

But, as Commonwealth Bank records and other documents examined by The Weekend Australian show, Mr Wilson -- who at the time was Julia Gillard's boyfriend and her client at law firm Slater & Gordon -- was a cavalier spender of slush fund cash.

He lived a high life in inner Melbourne in a Fitzroy property purchased for $230,000 in 1993 with about $100,000 from his other slush fund -- the similarly secret AWU Workplace Reform Association that Ms Gillard provided advice to help him set up.

Aside from the purchase of the trendy terrace house, Mr Wilson and his bagman, Ralph Blewitt, made numerous cash withdrawals in large lumps from the accounts of the Perth-based slush fund to finance the lifestyle.

In Melbourne, Mr Wilson repeatedly helped himself to the money in the Victorian slush fund.

Its cheque and cash management accounts had the words "Members Welfare", but the AWU's people were not its beneficiaries, nor were they even aware of it -- this was Mr Wilson's scam and pot of wealth to be plundered as he wished.

He had one other signatory to the Victorian slush fund, Jim Collins, who would subsequently disclose to the union's national joint secretary, Ian Cambridge, that Mr Wilson did what he liked. Mr Collins did what he was told.

Mr Cambridge, who called for a royal commission into the fraud in his own union, made a diary entry in which he described a July 1996 conversation with Mr Collins, "who could probably understand now the seriousness of the matter".

According to the entry, Mr Collins confided that "although he was the second signatory to 'some of those accounts' and that on occasions he might pre-sign 10 or 15 cheques in advance, he did not think that he could be accountable for what may or may not have happened with some of this money".

For Victorian police, who yesterday interviewed Mr Blewitt, and for the Prime Minister, who has repeatedly and strenuously rejected suggestions of wrongdoing by her, questions over where the money went are critical.

Mr Blewitt is understood to have told police about his role in a large and organised fraud with the help of the Perth-based slush fund, as well as his own role in the renovation of Ms Gillard's house in Abbotsford in Melbourne's east.

Police have hundreds of documents to examine. The Federal Court holds files for legal proceedings launched in 1995 and 1996 by the AWU and Mr Cambridge, supported by the union's then president, Bill Ludwig, to try to unravel a fraud perpetrated using the slush funds controlled by Mr Wilson.

One of those files contains affidavit material including bank documents obtained from the CBA. One is a $15,000 cheque for cash drawn on the Victorian slush fund, the AWU Members Welfare No 1 account, on April 27, 1995.

Mr Collins and Mr Wilson signed the cheque. The handwriting on an accompanying note later handed over by the bank to Mr Cambridge states: "5000 -- cash. K. Spyridis -- 10,000 B/chq."

Kon Spyridis is now retired and living in inner Melbourne, but at the time had a business called KM & J Spyridis and did building work around the city, including extensive work valued at more than $30,000 to refit new offices for the AWU at the request of Mr Wilson.

Mr Spyridis was introduced to Ms Gillard by AWU organiser Bill "the Greek" Telikostoglou and they were both involved in the renovations on her workers' cottage in Abbotsford.

Mr Spyridis -- a former branch organiser for the Liberal Party who worked in the fashion industry before moving into building work -- says he was not paid with bank cheques for the AWU work but today recalls Ms Gillard paying him with two bank cheques for the renovation work on her house, for amounts totalling about $3500.

His current recollection of the amount he was paid for the work on the house chimes approximately with Ms Gillard's 1995 recollection when she was interviewed by the firm's senior partner, Peter Gordon, of agreeing to pay Mr Spyridis $3780 in two tranches.

According to Ms Gillard's 1995 interview, those payments were made several months after Mr Spyridis received the bank cheque from the Victorian slush fund.

Asked about the payments he received for the renovation of the house, Mr Spyridis told The Weekend Australian: "I get my money and that's it."

Ms Gillard insisted on August 23 this year that she paid for the renovations to her own house. In 1995, however, she told her law firm in the tape-recorded interview that she could not categorically rule out whether union money or slush fund money went into the cottage, "but I can't see how it's happened".

The Prime Minister says she had no knowledge of the operations of the fund.

Ms Gillard revealed in the 1995 interview during an internal probe by the firm that she went on holiday and "Bruce, whilst I was away, decided that I should just get it done so he commenced with a group of friends demolishing the bathroom . . . "By the time I came back the bathroom had been demolished so I had no option but to get the rest of the renovations done and a series of tradespeople who Jim Collins predominantly organised, Jim Collins being an organiser at the AWU . . . a series of tradespeople came in and did the renovation . . ."

AWU fund name led to confusion on its purpose

Laura Tingle, Political editor AFR 24 Nov 2012

Labor MPs are bracing themselves for a Coalition assault on the Prime Minister’s integrity as Parliament sits next week for the last time this year. But opinions are divided about how much damage the Australian Workers Union controversy is causing, and how vulnerable Julia Gillard might be.

As of Friday, the prospects were remote that the Prime Minister would meet Coalition demands for a parliamentary statement on her involvement in events surrounding a union fund she set up as a lawyer in the 1990s.

Most of Gillard’s colleagues believe she has little to gain from answering individual questions about the affair and that, as far as voters are concerned, the controversy will be viewed from the perspective of already solidly fixed prejudices: either that the Prime Minister is a woman being unfairly attacked or that she is a liar.

So it is unclear to what extent Gillard will engage in detail in answers to questions from deputy Opposition Leader Julie Bishop.

But the issue of the whole affair that is causing some disquiet is Gillard’s role in establishing the AWU’s Workplace Reform Association.

The Prime Minister has said the fund, which was later used to partially pay for the purchase of a Melbourne property lived in by Gillard’s former boyfriend, Bruce Wilson, was set up as a union officials’ re-election or “slush” fund.

While the controversy has ranged over other issues in recent weeks, it has returned to the establishment of the fund, particularly after Workplace Relations Minister (and former AWU official) Bill Shorten’s comments on the ABC’s Lateline  on Wednesday night.

Shorten was asked what a union slush fund was.

“Oh well,” he said, “that account was unauthorised by the union and it was an inappropriate account, that account, as far as I can tell. So that was out of bounds.”

Asked whether in that case it was “inappropriate for Julia Gillard as a young lawyer to set up what you believe was an inappropriate fund”, he responded, “when that account came to light, what I do know is that the union took action. I know the union leadership of the day reported this to the police. In terms of the Prime Minister’s explanations, I’m satisfied with them.”

Shorten’s comments touch on the contentious issue of the name of the fund. Some of Gillard’s critics argue her greatest problem in the whole AWU saga is agreeing to establish a fund that contained the AWU name.

They argue that by setting up what she later said she believed to be a union officials’ re-election fund under a name bearing the union’s name, Gillard as a lawyer left open the possibility that there could be an “actionable passing off” of the fund as an official body of the AWU.

The name would also allow cheques written to the AWU to be diverted into the fund.

Those familiar with such re-election funds, which are relatively common in unions, say they never carry the name of the union to ensure they are kept as completely separate entities.

Some Labor MPS have taken a rather sour view of Shorten’s comments and why he made them.

Others are simply bracing for a tough week on this issue and on asylum seekers, and are hoping the government can simply ride it out, arguing it is dealing with issues of significance to the nation while the Coalition lingers in the mud.

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