return to letters list

Today’s coverage of Gillard’s involvement with the slush fund (now funds it seems) extends across major media (except the ABC) and identifies additional aspects as well as incidents that question some of her denials. Of particular interest is the detailed analysis by Hedley Thomas and his further set of questions to Gillard relating to both her acknowledged involvement and her denials or rejections as smear. One wonders whether Slater and Gordon now regret the creation of “The Julia Gillard Room” after she became a leading politician.

There are also suggestions that Wilson’s side kick, Ralph Blewitt, is about to return from Malaysia and that Bob Kernohan, who is said to have been bashed up when he threatened to spill the beans, may also come out into the open. Blewitt was closely involved in assisting Wilson establish the WA slush fund.

Deputy Opposition Leader, Julie Bishop, has raised further questions and someone has told the Financial Review that the issue will be pursued in the Senate, where Workplace Relations Minister, Eric Abetz, appears to have hold of it. Bishop has also called for an investigation into the “loss” of court files dealing with the AWU fraud issue.

One question which is yet to be raised is whether Gillard’s past connections have implications for existing policies, or the absence thereof, on workplace relations.

Des Moore

Dear diary: notes on a scandal

HEDLEY THOMAS, The Australian, November 17, 2012

IAN Cambridge's colleagues, friends and even some old foes insist he was never one to smear. Nor does he have any form for misogyny. He has no links with nut-jobs on the internet.

But he is a highly regarded commissioner of Fair Work Australia. His appointment in 2010 by the Labor government is described by legal figures interviewed by The Weekend Australian as appropriate recognition of ethical conduct in a quasi-judicial role for the preceding 14 years as a commissioner at the NSW Industrial Relations Commission.

Cambridge, say party insiders, is also a rusted-on Labor devotee. He always was (and still is) a backer of trade unions - but with an unconditional caveat: they must be run honestly, and any corruption has to be immediately, openly and ruthlessly rooted out.

For many people now trying to follow the Australian Workers Union scandal, one difficulty is understanding - amid a labyrinth of legal documents and union manoeuvring from the period - what happened, how, why, and the extent to which Julia Gillard may have been involved.

How during a four-year relationship with union official Bruce Wilson, for whom she also acted as his solicitor at Slater & Gordon in its work for the AWU, did she become caught up in this saga?

Cambridge was the most prominent investigator of a fraud scandal that engulfed the AWU in the mid-1990s, and, although she vehemently denies wrongdoing, still rattles the Prime Minister.

His extensive correspondence and diaries from the period are a helpful starting point to sketch what The Age described last week as "one of the biggest trade union rorts in Australian history" - and what the opposition intends to continue to prosecute in federal parliament with questions that remain unanswered.


"QUITE frankly, I am now certain that the Victorian affair goes a lot deeper than I had first suspected, and I am afraid that underlying the whole mess may be issues of serious corruption."

When Cambridge, then the national leader of the AWU, wrote this in a detailed letter to the then federal Labor industrial relations minister, Laurie Brereton, in January 1996, the exposure of fraud and corruption in the union had become a national story. Cambridge wanted a royal commission to clean up his union.

Senior investigative journalist Murray Hogarth summed it up in The Sydney Morning Herald in July 1996 as a "dynamite scandal" and reported: "Serious financial irregularities appear to have been happening for years and what should be the best trade union trademark in the country is looking very tarnished."

The modus operandi of the central figure who perpetrated much of the fraud, Bruce Wilson, was relatively straightforward. But it is important to appreciate that he had two scams going - in Western Australia and Victoria.

The scam in the west worked like a Swiss watch and stayed a secret for four years, until its accounts were first detected in April 1996. But the one in Victoria went awry earlier and had come to Cambridge's and public attention by July 1995.

In Victoria, where Wilson was a branch secretary after leaving Perth, he used secret bank accounts bearing the AWU's name (but which were not known to the union). These were Wilson's Victoria slush fund accounts.

These accounts received huge funds for the time - about $200,000 from major builder Thiess, the oil and gas producer Woodside, and other companies.

The cheques would be sent to Wilson and deposited in the AWU Welfare Association No 1 account at the Commonwealth Bank.

The cleared funds would then be taken out by Wilson with multiple and significant withdrawals.

Why the companies paid has not been satisfactorily explained, but it would be fair to question whether these were payments for industrial peace. Some of the companies would later say that they were led to believe that they were making legitimate payments for things such as union membership tickets for workers, and that Wilson's misuse of the money - and the union's lack of knowledge of the accounts and the funds - came as a shock when finally revealed. Cambridge concluded that those accounts were "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".


THE scam in the west was similar to that in Victoria, but there were some significant differences in how it was put to use.

Before Wilson left Perth (where he was AWU branch secretary) to go to Victoria for the union, he and his bagman Ralph Blewitt were in control of a secret entity. It was called the AWU Workplace Reform Association Inc, and because of its legal status it required approval and registration by the Commissioner for Corporate Affairs in Western Australia, under certain legislation.

The association was a fund-raising vehicle with a deeply misleading name - "Workplace Reform Association". The documentation and detailed legal jargon that accompanied its application for registration stated that it was dedicated to workplace safety.

Such a lofty ideal was hard to criticise or question, particularly at a time when the union's members were employed on large and dangerous construction sites.

Once the association was registered, two Commonwealth Bank accounts - a cash management account and a cheque account with the same name - came into existence.

Wilson and Blewitt then created paper invoices with the same title as the association. Those works of fiction billed Thiess for $400,000 for work that never occurred. Thiess has repeatedly declined to comment and never filed a complaint with police.


IN much of the biographical material produced since October 1995, the truth about Gillard's time as a solicitor and salaried partner at Slater & Gordon - and her simultaneous relationship with her client Wilson - has been carefully managed.

There were statements in parliament at the time that she was a beneficiary of Wilson's fraud and that she had been forced to leave the firm - but Gillard has always been emphatic and vociferous in her denials, and the firm was silent.

In August this year, one of the firm's equity partners, Nick Styant-Browne, decided that the silence about the Prime Minister's departure from the firm had gone on long enough.

He released a statement to The Australian as well as some key hitherto-undisclosed documents, including the transcript of a tape-recorded interview that was conducted on September 11, 1995, by the firm's senior partner, Peter Gordon.

These showed that the firm (which would years later honour her political rise by naming one of its suites in Melbourne "The Julia Gillard Room") had lost faith, trust and confidence in her during the firm's internal review in August and September 1995: of her legal advice to Wilson, her failure to disclose to her colleagues the work that she had done for him and her knowledge of the purchase of a Fitzroy terrace house by Blewitt.

The conclusions reached by the firm's partners after their review meant that Gillard's legal career was soon over. Her resignation and abrupt departure were sought and received.

The tipping point for the firm in severing its ties with Gillard was the revelation that she had helped establish the AWU Workplace Reform Association in early 1992 for Wilson and Blewitt. She had told nobody else at the firm about it. She had not opened a file, which meant the work could not have become known to any of her partners. She said she had sought no advice from anyone at the firm before doing it. The AWU's national leadership did not know about it; only Gillard, her boyfriend, and Blewitt knew.

This discovery by the firm - at a time that it was extremely concerned about its vulnerability amid revelations of only the Victorian scams and accounts, then the subject of investigation by fraud squad police in Melbourne - was sufficient to see her off.

There is no evidence that Gillard had any knowledge of the frauds.

The transcript reveals Gillard telling Gordon that the association in Western Australia was a "slush fund" for the elections of officials (raising questions of why it was passed off as something different); and that she knew of concerns and rumours about renovations of her house being funded with union money, which was a possibility that she believed to be remote but could not rule out.

The Prime Minister said in August this year that she paid for the renovations on the house. She says she had no knowledge of the operation of the fund.


THE tactic of the Prime Minister's new communications head, John McTernan, is to challenge journalists to make "allegations" against the PM, thus trying to put them on the defensive.

Questions are put by journalists to many politicians every day, and allegations of wrongdoing sometimes follow the answers - but McTernan and Gillard seek to switch the chronology of this custom, and many journalists are going along, wondering aloud about the whereabouts of a "smoking gun" while not bothering to ask.

But here is a small sample of questions, some of which are informed by the disclosures this week from Cambridge's 1995 diary - namely that Wayne Hem, a former union employee, allegedly put $5000 in Gillard's bank account at the time on Wilson's instruction.

Hem swore a statutory declaration to The Australian to confirm that he did what he was told. Another contemporaneous diary entry described union official Helmut Gries alleging that union money paid for Gillard's renovation (although Gries is now insisting he did not say it).


HAVE you ever received funds into your bank account from the association or any other account owned or controlled by anyone from the AWU? Have you ever made inquiries as to whether that occurred?

Was the Commissioner for Corporate Affairs in Western Australia misled as to the true nature of the AWU Workplace Reform Association, given you later described it as a slush fund?

Was the unauthorised description of the slush fund as being a related entity of the AWU misleading and deceptive?

What was your precise role in the registration of the association?

When did you first become aware that the inclusion of the AWU's name in the title of the slush fund enabled cheques intended for the AWU to be deposited into accounts operated by the association?

Was this the only such incorporated re-election fund that you helped establish for union clients as their solicitor?

Did your failure to open a file at Slater and Gordon prevent your fellow partners from ascertaining a conflict of interest?

Did your failure to open a file and your decision not to render a bill to the AWU for your work prevent the AWU from finding out about the unauthorised passing-off of its name?

Do you accept that as a solicitor acting for the AWU that you were in a position of trust to the AWU?

Before you helped Ralph Blewitt purchase an investment property in Melbourne, what inquiries were taken of his capacity to repay the loan?

When did you discover this was a sham transaction with Blewitt the purchaser in name only, who never provided funds for the purchase, while Wilson controlled the asset with a power of attorney you witnessed?

Why did neither you nor Slater & Gordon - on being made aware in mid-1995 of fraud concerns related to Wilson over the Victorian slush fund - not alert anyone in the AWU to the existence of the association you had helped to establish, and which bore the name of the AWU (the firm's client)?

AWU leader Ian Cambridge's surprise as slush fund revealed

HEDLEY THOMAS, The Australian, November 17, 2012

THE diary of the Australian Workers Union's national leader tells how a secret slush fund bearing his union's name was revealed to him by a bank officer eight months after Julia Gillard left her job amid her law firm's concern at her undisclosed role in helping establish the fund.

The diary of Ian Cambridge, a Fair Work commissioner who was national joint secretary of the AWU in the mid 1990s, reveals his surprise when the Commonwealth Bank advises him that a national search has identified bank records showing the existence of an AWU "association".

"It is now 11.35 and a short time ago I concluded a telephone conversation with a Mr Andrew Chalker from the Commonwealth Bank," Mr Cambridge states in the entry for April 3, 1996.

"Mr Chalker rang me, indicating that he was undertaking certain activities in respect to our request for the names of accounts held by the Commonwealth Bank which may relate to the AWU.

"Mr Chalker then indicated to me, and in fact asked me, if I had knowledge of a Workplace Reform Association, to which I responded that I had never heard of such an organisation before, and I asked him if that was one of the names that had been thrown up by his computer search.

"He said that was something which had been uncovered in the search to date and I indicated to him I thought that may well be something that we would have some interest in further investigation of."

The Prime Minister's role in helping set up the AWU Workplace Reform Association for her boyfriend, AWU official Bruce Wilson, was not known outside law firm Slater & Gordon until three months ago - when a former equity partner of the firm released a statement and secret transcript of a September 1995 interview with Ms Gillard.

The September 1995 interview was part of an internal review by the firm into Ms Gillard, then a salaried partner. She told the firm at the time that the association was a "slush fund for union elections".

After becoming aware in August-September 1995 of fraud concerns relating to Mr Wilson over a different AWU slush fund in Victoria, neither the law firm nor Ms Gillard alerted anyone in the AWU to the existence of the association that she had helped to set up.

Ms Gillard said on August 23 this year that she was not involved in any wrongdoing and insisted that while she provided legal advice for the establishment of the association, she was unaware of its workings. Ms Gillard has this week refused to respond to detailed questions about $5000 allegedly paid into her bank account on the instruction of Mr Wilson in mid 1995. She accused The Australian of a smear campaign and of "being unable to substantiate any allegations of wrongdoing".

Two months after the April 1996 disclosure by the bank to Mr Cambridge, he received further bank records showing large deposits and asked the AWU's officials in Perth about the association, but none had ever heard of it.

In a July 5 diary entry, Mr Cambridge spoke to branch official Russell Frearson and said to him "I thought it would be easy to remember because approximately $400,000 had gone through it, to which he responded by saying words to the effect that 'shit, I certainly could have done with that sort of money'.

"He said he could not remember and would have remembered any account that handled amounts of money like that."

Mr Cambridge's diary states that he told Mr Frearson: "This effectively seems to have been a slush fund account which acted as the receptacle for money which was properly intended to go to the union. I thought that the whole matter would never be properly resolved until such time as a royal commission was established to investigate all the accounts and the money trails."

Opposition claims 'cover-up' as more AWU files go missing

Joe Kelly, The Australian, November 17, 2012

CRUCIAL court files detailing the Australian Workers Union's discovery of internal fraud 17 years ago and the fight to overturn redundancies to dodgy union officials - including Julia Gillard's former boyfriend Bruce Wilson - have mysteriously vanished.

Yesterday the Federal Court confirmed that key documents filed in the Industrial Relations Court's Queensland registry in 1995 by then AWU national president Bill Ludwig had been lost in the past nine months.

Julie Bishop called yesterday for a police investigation into their disappearance, saying "unless they are located, the assumption must be that they have been stolen".

"Unless there are plausible explanations as to why official records would go missing from record-keeping institutions, such as WA state archives and the Federal Court, this is starting to look like a sinister cover-up and the deliberate destruction of documents which could otherwise throw light on the true involvement of a number of people in a massive fraud," the Deputy Opposition Leader said.

The files are the third set of documents relating to the AWU from the period to go missing.

The Australian revealed last month that the file held by the State Records Office in Perth on the AWU Workplace Reform Association was empty.

It should contain key documents from 1992, when the association was registered by the West Australian government.

Slater & Gordon also has disclosed that it cannot find its file on the association, which the Prime Minister helped set up as a salaried partner at the law firm and later described as a "slush fund".

The Federal Court documents were filed by Mr Ludwig in a bid to recover the large redundancies paid to Mr Wilson and other AWU officials - including his bagman Ralph Blewitt and their friend Bill Telikostoglou.

Retired lawyer and union historian Harry Nowicki says the files contain affidavits from key players and the details of the meetings in which the AWU became aware of fraudulent activity.

These include the national executive meeting of August 16, 1995, which voted to pay large redundancy cheques of AWU members' money.

"I can confirm the files in question cannot currently be located," said a spokesman for the Federal Court. "However, the court continues to search and make inquiries as to their whereabouts.

"The files date back to the mid-1990s and are kept in off-site storage, meaning they have to be retrieved, delivered to court and, on some occasions, sent to interstate registries."

It appears the files were lost in a return transfer from Melbourne to Brisbane.

Meanwhile, Attorney-General Nicola Roxon yesterday ruled out instigating any legal action into the actions of Ms Gillard, saying it was not her "role to be doing that".

Slush fund that keeps paying out

The Age, November 17, 2012 Mark Baker

IN NOVEMBER 1991, Julia Gillard took a business trip to Perth that would prove to be a one-way ticket to trouble. The West Australian branch of the Australian Workers Union had a legal problem and called in its Melbourne-based lawyers, Slater & Gordon. Equity partner Bernard Murphy, now a Federal Court judge, was tied up so he sent instead his deputy and close friend in the firm's industrial department.

In Perth, Julia Gillard - 30 years old, single and a woman already with political ambitions - met AWU state secretary Bruce Wilson, a handsome, smooth-talking father of two and accolyte of AWU boss and Labor Party kingmaker Bill Ludwig.

It may not have been love at first sight between the man already being talked about as prime ministerial material and the woman who was, but it later developed into a 3½ year relationship.

Even before then, Wilson was hatching plans that would snare Gillard in a corruption scandal through a series of legal transactions, questions about which have shadowed her career for two decades.

In June 1992, with Gillard's legal advice and support, a body called the AWU Workplace Reform Association was registered in Perth with the declared objective of promoting workplace safety and training.

What no one else in the union apart from Wilson and his crony Ralph Blewitt knew then - and would not discover until several years later - was that the association was the mechanism they would use to misappropriate hundreds of thousands of dollars in payments from Thiess and other construction companies, payments that were channelled through secret bank accounts and a private post office box.

Within a year, more than $100,000 siphoned from the association was put towards buying a unit in Kerr Street, Fitzroy. The property was bought in the name of Blewitt, who had never seen it and who now claims to have had no real role in the transaction, and had not received any rental income from the property where Bruce Wilson lived. He also claimed to have received nothing when it was finally sold in early 1996.

The unit was bought by Wilson, by then AWU state secretary in Victoria, using a power-of-attorney drafted and witnessed by Julia Gillard, who was with him at the auction and waived legal fees on the conveyancing work for the transaction, which was completed with $150,000 from a Slater & Gordon loan facility.

When national officials of the AWU finally uncovered the rorting of the Workplace Reform Association, Gillard - who continues to insist that she did nothing wrong and knew of no wrongdoing - was confronted by the senior partners at Slater & Gordon about her failure to brief them about the work she had done and her failure to take advice within the firm about the work or to open a formal file about it on their computer system.

At a meeting with the partners in September 1995 - after dumping the boyfriend she declared had ''betrayed'' her - Gillard confirmed that rather than the benevolent body implied in its registration documents, she regarded the AWU association from the outset as a ''slush fund'' to raise money for union election campaigning.

When questioned in detail about allegations union money had been used for renovations on a house she owned in Abbotsford, she said: ''I can't categorically rule out that something at my house didn't get paid for by the association or something at my house didn't get paid for by the union or whatever.''

At a media conference in late August this year, after the controversy was reignited by the publication of a redacted transcript of that 1995 meeting, Gillard was no longer equivocal.

''I paid for my renovations,'' she declared. And asked why a body incorporated to promote workplace reform could be a slush fund, she said its purpose was dedicated to funding the election of union officials ''committed to reforming workplaces''.

Further revelations since August about the events in the early 1990s have reignited the debate, drawn the federal opposition into a concerted attack on the Prime Minister's account of what she knew or didn't know and opened the prospect of renewed police investigations in Victoria and Western Australia.

The Australian newspaper this week published fresh information from detailed diary notes compiled by senior AWU official and now Fair Work Australia commissioner Ian Cambridge, who first blew the whistle on the scandal, and interviews with two former AWU workers who had made allegations to Cambridge involving Gillard in 1996.

Former AWU employee Wayne Hem alleged Wilson had given him instructions to deposit $5000 in bundles of $50 and $100 notes into an account held under Julia Gillard's name. And former union official Helmut Gries, who told Cambridge in September 1995 that union money had been used on renovations of Gillard's house, was quoted as saying he was now unsure of his recollections of those events.

Gillard responded furiously to the Hem allegation, denouncing it as a smear, but did not say whether or not she had knowledge of such a deposit. ''This matter has been trawled over for the best part of 20 years and … there is not one finding of wrongdoing by me. And the reason for that: I didn't do anything wrong.''

With media now focusing with renewed interest on the issue, there is no doubt the trawlers will be busy still when Federal Parliament resumes in a week for the last sittings of the year.

Coalition to raise AWU in Senate

AFR Pip Fairbairn and Mark Skulley

The Opposition will raise allegations against Prime Minister Julia Gillard in the Senate that she was a “conduit” for laundering money in a 1990s corruption scandal at the Australian Workers Union.

The Opposition plans to ask questions about Ms Gillard’s involvement in the purchase of a Melbourne property using money from a union slush fund she set up for her then partner, AWU official Bruce Wilson, while she was working as lawyer for Slater and Gordon.

Mr Wilson and union official Ralph Blewitt used the fund, called the AWU Workplace Reform Association, to take money from major construction companies. The money was used to buy a house in Fitzroy, Melbourne.

The Opposition has raised questions as to whether Ms Gillard knew the money was used to buy a house, which Ms Gillard has denied.

Slater and Gordon did the conveyancing for the property purchase. Ms Gillard has said that she was not responsible for the conveyancing.

The firm’s file shows that in April 1993, Ms Gillard gave a$2000 cheque from Mr Blewitt to Olive Brosnahan, solicitor in charge of conveyancing, for money owing to the firm.

The file contains a handwritten note alleged to be from Ms Gillard that was attached to the envelope containing the cheque. It says: “Cheque for costs for Blewitt conveyancing, JEG 29-4 -1993”.

Separately, former AWU national secretary and now Fair Work Commissioner Ian Cambridge has alleged in an affidavit that Mr Blewitt withdrew $2000 from the slush fund and deposited the money into his personal account, which was used to pay Slater and Gordon.

The affidavit contains a copy of the cheque from the “AWU Workplace Reform Association Account” signed by Mr Wilson and Mr Blewitt for $2000 that was deposited into Mr Blewitt’s account at the Commonwealth Bank in James Street, Perth on April 4 1993.

Opposition workplace relations minister Eric Abetz said the cheque raised questions about whether Ms Gillard knew the money was laundered through Mr Blewitt’s personal account.

“If slush fund money for the purchase of the Fitzroy terrace house was laundered through Blewitt’s account and Julia Gillard was then the conduit for this money, then the Prime Minister must explain her role and what she knew,“ Senator Abetz said.

“Despite denying she was in charge of conveyancing, the conveyancing file has Ms Gillard’s fingerprints all over it. This is just another example.”

The Prime Minister has repeatedly denied any wrongdoing. This is smear, pure and simple,” Ms Gillard told reporters on Wednesday.

On Friday, Opposition Leader Tony Abbott renewed calls for Ms Gillard to make a statement to Parliament when the House or Representatives returns for its final week sitting week in the last week of November.

Mr Blewitt is expected to return to Australia within the next 10 days to make a statement to the Victorian Police.

BLEWITT TO TELL ALL... and Kernohan can come out of hiding

Larry Pickering sent from Nov 16, 2012

Ralph Blewitt has replied this morning to an article on Pickering Post which was repeated on facebook. He has said he will return to Australia to face the music and tell what must be told.

“I will report to the Victorian Police Fraud Squad with my Lawyer Mr Robert Galbally... I will make a statement telling the Truth to the best of my recollection about the AWU Workplace Reform Association /slush fund that I, Bruce Wilson & Julia Gillard set up in WA and answer all and any questions asked as honestly as I can.
And let the cards fall where they may.
To those of you that have offered words of support. Thank you.” Mr Blewitt said.

“Michael Smith and Glen Milne lost their jobs because Julia Gillard used her position to shut down this story..that's an abuse of her position as PM. That cannot be allowed to happen in Australia, I will not stand by and see Freedom of the Press and Freedom of speech trashed by ANYONE.

My Brothers of the Royal Australian Regiment would never forgive me.
“Bob Kernohan tried to expose this and got beaten up by union thugs and lives in fear every day because he tried to get the truth out.

“If someone deserves hero status it's Bob.

“...I will make my statement to the Victorian Fraud Squad and let the cards fall where they may.”

As the stench of ALP corruption increases, stinging the nostrils of decent union men, Blewitt has bitten the bullet and decided he can take it no longer.

Bob Kernohan and Ralph are the only two people who Gillard has not been able to shut down. All others have been silenced or paid off with judicial promotions that have prevented them discussing the matter.

There is no doubt Gillard was integral to massive fraud involving theft from the very workers she claims to represent.

There is no doubt Gillard at a minimum knew of the corruption and not only did nothing to prevent it but clearly hid it from her client, the AWU. She admits she cannot deny she profited from the corruption.

Her claim of “Liberal smear tactics” has become a threadbare diversion as more evidence is unearthed daily by those in her own Party who have a conscience.

This stain on Australia’s Office of Prime Minister reaches far beyond Gillard’s incompetence and must be cleansed by those who have historical respect for the Labor movement.

Blewitt is right, Bob Kernohan is the true hero in this nasty business. He hides, cold and broke, pilloried, bashed and continually threatened by Gillard’s corrupt thugs in the union movement.

Blewitt’s full statement can be seen on Pickering Post under “BLEWITT’S DILEMMA”.

return to letters list