return to letters list

There is continued commentary in some of the week-end press on Gillard’s involvement in the slush fund. The most interesting is Saturday’s Financial Review which takes up a third of its front page with her photo and a ”What Gillard Knew” caption, followed by two articles inside the paper by two journos with well-known political inclinations (see below). These articles acknowledge the emergence of new material but seem to be saying that some of it may help Gillard.

The article in The Australia, however, suggests Gillard’s responses still leave unanswered questions. Perhaps the Opposition could offer her free time to explain in the next House week?

Des Moore

Gillard might not have seen cheque

AFR 10 Nov 2012, Laura Tingle and Mark Skulley

Key points

Internal records from law firm Slater & Gordon have cast doubt on whether the Prime Minister saw a crucial cheque for almost $68,000 from an alleged union slush fund that was used to buy a Melbourne property in 1993.

The opposition has queried how Ms Gillard could not have known the money used for the purchase came from the fund associated with her former boyfriend, union official Bruce Wilson, when the deposit cheque was written to the fund’s account.

At the time of the deal Ms Gillard was a partner at Slater & Gordon, which has released mortgage and conveyancing documents to former union official Ralph Blewitt, who registered the Australian Workers’ Union Workplace Reform Association. However, the conveyancing file shows the conveyancing work was undertaken by another employee of Slater & Gordon, Olive Brosnahan, who worked in the commercial division of the firm, while Ms Gillard worked in the industrial wing.

The Melbourne property was bought for $230,000, with Mr Wilson using power of attorney to buy it on behalf of Mr Blewitt. The law firm’s file shows that a deposit of $23,000 was paid, with the firm acting as the intermediary for a $150,000 mortgage.

In Parliament, Deputy Opposition Leader Julie Bishop sought to table a copy of a cheque for $67,722.30 from the Workplace Reform Association that was used to settle the purchase of the property.

The cheque is made out to “Slater & Gordon Trust Acc” and is drawn on a branch of the Commonwealth Bank in James Street, Northbridge.

However, an internal Slater & Gordon account ledger shows the same amount of money was paid by Mr Blewitt as a “DDep”, or direct deposit, meaning the law firm might not have sighted the cheque.

The documents show that Ms Gillard witnessed the document that gave Mr Wilson power of attorney to act on behalf of Mr Blewitt’s documents. They also show that Ms Gillard was sent a memo explaining in what circumstances interest rates would be charged on the mortgage paid and an assurance from the bank that the building was insured.

The Slater & Gordon documents do not support queries on the dates of the power-of-attorney documents witnessed by Ms Gillard.

However, questions remain over incorporation of the association. The State Record Office of Western Australia confirmed the file had been located but had no contents.

State archivist Cathrin Cassarchus said the file showed no sign of having held any contents and “appears unused”.

She said the State Archives comprised 2 million items and no government agency had borrowed the file since it was transferred in 1999. “It is unusual for files to have nothing in them but it is not a unique occurrence,” Ms Cassarchis told the Weekend Financial Review. At a press conference in Laos this week Ms Gillard said she had not been involved in the conveyancing, had no ongoing involvement in the slush fund after it had been established and was therefore not in a position to know there had been any malfeasance.

“My role here was as a lawyer,” she said. “I provided advice on the incorporation of an association. I was never connected with the operation of any fund. I was not an office bearer of the association. I was not involved in its activities.

“I was not involved in any bank accounts it may have held. I was not an official of the AWU. I was not in charge of the conveyancing file. So you are effectively asking me why didn’t I report to authorities things I did not know.”

The Australian Financial Review

What Gillard knew about the ‘slush fund’

AFR 10 Nov 2012 Laura Tingle and Mark Skulley

There is concern within government Julia Gillard remains vulnerable on her role at Slater & Gordon.

Julia Gillard had reason to be feeling good when federal Parliament rose last week. The polls were continuing to improve for the Prime Minister and the ALP. The release of the Asian Century white paper finally gave a structure to the government’s agenda for the next election. Ms Gillard held the ascendancy in Parliament over Tony Abbott, who was facing his own pressures and demons.

But all was not well. Not only was the government in conflict with its cross benches about the budget, but the controversy over Gillard’s role in a 17-year-old union corruption scandal had been revived.

After a marathon press conference on August 23, the Prime Minister declared done and dealt with the saga of her role as a lawyer at Slater & Gordon in the establishment of a fund in 1992 by her then boyfriend, Australian Workers Union official Bruce Wilson, which Gillard believed to be for the purpose of his re-election but was subsequently alleged to have been used to corruptly siphon off $400,000.

She would deal with any questions journalists had about the matter at that press conference, she declared on the day, but after that the matter would be closed.

Unfortunately for Gillard, new material has emerged, the opposition has got it all, and there is a deep concern within the government that she remains both vulnerable to a renewed focus on the issue and dangerously resistant to discussing it with her colleagues.

Conspicuously sensitive to new questions about the issue, the Prime Minister continued to claim last week in federal parliament that she had dealt with all the allegations that had been made against her.

But a slow but relentless series of questions from Deputy Opposition Leader Julie Bishop last week finally procured what the Coalition had been seeking: a declaration by the Prime Minister that she stuck by everything she had said at the August 23 press conference.

The opposition says that declaration brings the whole issue to life again because the political question becomes a matter of what the Prime Minister said on August 23, and what she has subsequently told the Parliament, rather than what happened 17 years ago. In her answer to a last question from Ms Bishop last week, Ms Gillard confirmed in Parliament that she stuck by everything she had said at the August press conference.

The opposition believes Ms Gillard’s declaration gives it the material to, at the least, declare the Prime Minister has misled Parliament or even to suggest she did not bring criminal behaviour to the attention of authorities.

The eruption of the sexism debate in federal politics and Ms Gillard’s effectiveness in rebutting the earlier claims on August 23 mean the Coalition is treading carefully in how it pursues the issue, determined not to overplay its hand.

But the outstanding questions now – as opposed to the ones being pursued in August – involve the conveyancing of a Melbourne property bought by Mr Wilson (in the name of his friend Ralph Blewitt); questions about what Gillard might have told West Australian regulatory authorities about the reasons for setting up what she later described as the “slush fund” for Mr Wilson; and her knowledge of the alleged corrupt use of funds by Mr Wilson and Mr Blewitt and the failure to bring this knowledge to the attention of either the Australian Workers Union, the police or regulatory authorities.

The new documents that have emerged on the matter, however, don’t just raise questions. They offer some answers which should take the Prime Minister out of the frame of at least some of the opposition’s allegations.

The problem for the Prime Minister now in managing this issue is that having declared she would not revisit it, she has put a constraint on defending herself.

The Prime Minister held her press conference in August, after the publication in The Australian of a transcript of a recorded interview between her and the Slater & Gordon senior partners. The press conference came on a day when The Australian had made a minor but crucial error in its reporting which allowed the Prime Minister to go on the front foot, and at a time when the government assessed the paper’s campaign against her was running out of steam.

The issues that were being pursued at that time were whether she had been the beneficiary of free and corrupt work on her house from union mates, the reasons why she had left Slater & Gordon, and why she had not established an official file at her then law firm to cover the work she was doing to set up the fund for Mr Wilson.

The Prime Minister comprehensively answered the questions about work on her house and her departure from Slater and Gordon.

Equally, she talked down the reasons why she didn’t set up a file in Slater & Gordon’s system to cover the work she did in establishing the fund, arguing that this was not abnormal given she didn’t intend to charge for the work, even though this meant the partners at Slater & Gordon were unaware of the work.

Ms Gillard explained the difference between the stated purpose of setting up the AWU Workplace Reform Association – for the “development of changes to work to achieve safe workplaces” – and her admission to Slater & Gordon that it was a “slush fund” , though conceding that, “slush fund” was “terminology with a particular overtone to it which I don’t think helps with understanding these events”.

On October 30, Ms Bishop asked Ms Gillard in Parliament why, “given that the Prime Minister has admitted to knowing in advance that the Australian Workers Union Workplace Reform Association was in fact a union slush fund, why did the Prime Minister draft these objects of association that I have in my hand, claiming that it was for training and workplace safety”.

The Prime Minister responded that she had “dealt with these matters extensively on the public record, and no amount of muck and filth from her, to the dismay of her Liberal colleagues, will change that simple fact”.

Ms Bishop unsuccessfully sought to tender the memorandum and articles of the Australian Workers Unions Workplace Reform Association.

Ms Gillard had already offered an explanation on this at her August 23 press conference.

“My understanding of the purpose of this association was to support the re-election of union officials who would run a campaign saying that they wanted re-election because they were committed to reforming workplaces in a certain way, to increasing occupational health and safety, to improving the conditions of the members of the union”, she said

“My role in relation to this was I provided advice as a solicitor. I am not the signatory to the documents that incorporated this association. I was not an office bearer of the association. I had no involvement in the working of the association.

“I provided advice in relation to its establishment and that was it.”

Last month The Age’s editor at large, Mark Baker, reported that answer was misleading.

He reported that it was understood the WA Corporate Affairs Commission had queried the registration in 1992 because the Australian Workers Union Workplace Reform Association sounded like a trade union body, and should therefore be registered under the Industrial Relations Act, which had much tougher rules.

Mr Gillard allegedly wrote back to confirm the association was genuine and legitimate under WA law, dedicated to workplace safety, he reported.

The report appears to contradict claims by Ms Gillard that she did no more than provide limited professional advice about establishing the association.

But it is unclear what the documentary basis for these claims is because, in a twist with a certain Agatha Christie feel to it, the WA Corporate Affairs Commission file now held at the state archives is empty. Slater & Gordon has released documents relating to a 1993 property purchase to Mr Blewitt’s lawyers. But the law firm has reportedly told him they have no documents relating to the creation of the association.

But if there was indeed further correspondence between Ms Gillard and the CAC, it might have been no more than here giving a clarification of details as Mr Blewitt’s lawyer. It did not mean she was giving any personal assurance on bona fides of the registration.

It has also been asserted that in providing legal advice for the registration of the AWU Workplace Reform Association in 1992, Ms Gillard tried to hide the entity’s true purpose.

But an unlikely white knight came to the Prime Minister’s defence on this issue in August. Mark Latham wrote in The Australian Financial Review that to test the claim he “contacted the Associations and Charities Branch of the WA Department of Commerce. Its officers informed me that under the Associations Incorporation Act 1987, ‘you can basically register anything as long as it’s not-for-profit’.

“Indeed, Section 4 of the statute makes provision for associations with ‘political purposes’, thereby covering a wide range of election types. When I asked about fund-raising for trade union elections, I was told that ‘there should not be a prohibition on that’.”

But the really new pieces of information that have come to light since the Prime Minister’s press conference in August come from Slater & Gordon’s file on the conveyancing of the Melbourne property in Kerr Street, Fitzroy bought for Mr Wilson in the name of his sidekick Mr Blewitt (though some of its contents had been previously released in a West Australian police file).

On August 23, Mr Gillard told the press conference that her understanding “about that house was that it was being purchased by Blewitt. It was being purchased as an investment property. It was purchased on the understanding that Wilson would be the tenant of the property and that Blewitt was in a position with a mortgage like an ordinary person to purchase the property.

“I did not, at the time, understand that any funds from any other source would be used to support the purchase, that is funds from the association or any other accounts related to the union.”

But the conveyancing file has revealed that a cheque for more than $67,000, made out on the slush fund’s account to the Slater & Gordon trust account was used as a deposit on the property. But Slater & Gordon’s internal ledger shows the same amount as having been paid by Mr Blewitt as a “DDep” or direct deposit.

Further, the conveyancing file has revealed that a $150,000 loan to Mr Blewitt was made by Slater & Gordon under the firm’s mortgage lending scheme. It includes details from Mr Blewitt’s account saying that his current gross salary was $51,801 but it does not include any details of his existing financial commitments.

The transcript of the Slater & Gordon interview with Ms Gillard in 1995 records Peter Gordon asking her: “Did you ever make inquiries as to the source of those funds from [Mr Blewitt’s] point of view?”

Ms Gillard replied: “No, I just, from the discussions I had an understanding that he was going to put a deposit on and that he was interested in then having a negative-gearing arrangement for the rest so that he would get a tax break, so he was, I mean like one ordinarily does, he was going to have a deposit and a mortgage.

“To the extent that I thought about it, I hadn’t made careful inquiry about his financial circumstances, he’s a middle-aged man, he’s on his second marriage. From what he says it’s apparent his first marriage ended in circumstances where he didn’t have much by way of ongoing relationship with the children and I understood that to be in the maintenance sense as well as the access sense ... his wife worked. So you know, they weren’t Mr and Mrs Onassis but they were relatively well-positioned.”

Ms Gillard confirmed in the Slater & Gordon interview that, with Mr Wilson, she went to the early 1993 auction at which Mr Wilson successfully bid on the property purchased.

Her name also turns up on a handful of 420 pages in the conveyancing file.

For example, Mr Gillard was sent a memo from Slater & Gordon staff on how penalty interest was to be paid under the mortgage, and a bank letter saying the property was insured.

She also formally witnessed documents that gave Mr Wilson power of attorney over Mr Blewitt to complete the transaction.

The opposition question arising from the new revelations was whether Ms Gillard could be so intimately involved in the purchase of the property yet not know that the deposit came from the reform fund ostensibly set up to promote workplace reform.

Ms Gillard told a press conference in Vientiane, Laos this week that she was “not in charge of the conveyancing file”.

On October 31 in Parliament, Ms Bishop reminded the Prime Minister of her statement on August 23 that Mr Blewitt had personally provided the funds for the purchases of the Fitzroy property in 1993.

“I refer to a cheque, which I have a copy of, for over $67,000 from the AWU Workplace Reform Association made out to the Slater & Gordon trust account used to purchase that property,” Ms Bishop said.

“As the lawyer advising on the conveyance, does the Prime Minister stand by her statement that she did not know that the money came from the union slush fund that she had assisted in establishing?”

The Prime Minister once again said she stood by “all of my statements on this matter”.

Ms Bishop unsuccessfully sought to table the cheque, dated March 18 1993.

Ms Bishop then asked about an affidavit by former AWU official Ian Cambridge [now at Fair Work Australia] “in which he states: ‘I am unable to understand how Slater & Gordon could have permitted the use of funds obviously taken from the union without obtaining proper authority from the union’.”

Ms Bishop asked the Prime Minister: “As a lawyer acting for the union and on the purchase of the property, how could the Prime Minister have been ignorant of the source of funds?”

The Prime Minister responded: “The Deputy Leader of the Opposition in her initial question asked me to stand by my public statements on this matter. What that should imply is that it has been canvassed and dealt with on the public record. I stand by my public statements.”

Ms Bishop asked a supplementary question: “Given that none of the specific questions asked this week about the slush fund and the Slater & Gordon trust fund have been answered by the Prime Minister previously, how can she continue to assert that she has dealt with them before, as that is patently untrue?”

However, the significant weakness in the Opposition’s attack on the $67,000 cheque stems from the fact the attack rests on the presumption that Ms Gillard handled the conveyancing of the property.

In fact, the notations in the conveyancing file show all the conveyancing work was done in the commercial division of the Slater & Gordon practice, under partner Nick Styant-Browne, rather than in the industrial division where Ms Gillard worked.

Slater & Gordon at this point of history was fiercely competing – particularly with rival firm Maurice Blackburn – to build up links with trade unions in search of business.

As a result, it offered package benefits to union officials and members as it touted for business, including free consultations, discount conveyancing and the like to create good will

Styant-Browne told The Australian in August that “The Kerr Street conveyance and mortgage were both unexceptionable transactions for the firm’s conveyancing and mortgage practice.” But he told The Age last month that, in his view, Ms Gillard had been “wilfully blind” at a minimum and that a media release by Slater & Gordon on August 19 was “stunningly incomplete”.

Peter Gordon had said in a statement that he remained of the view that there was “no explicit or indirect evidence that [Ms Gillard] was involved in any wrongdoing”. He believed that statement was “utterly consistent” with the Slater & Gordon press release.

While Ms Gillard was regularly dealing with Mr Blewitt and Mr Wilson as an industrial lawyer, the files show the conveyancing on the property was primarily handled by Olive Brosnahan, a senior paralegal working in the commercial division.

Ms Gillard’s name coming up in the file can generally be explained by her passing messages between her colleagues seeking to complete the settlement and Mr Blewitt.

Further, the Slater & Gordon ledger suggests Mr Blewitt deposited the cheque in the firm’s account at a Commonwealth Bank branch in Perth, meaning no-one at the firm might have seen it then.

More questions were asked of the Prime Minister relating to the power of attorney document that gave Mr Wilson the authority to buy the property on behalf of the nominal owner, Mr Blewitt.

On November 1, Ms Bishop asked the Prime Minister about her claim on August 23 “that she had no involvement with the AWU Workplace Reform Fund after she helped set it up in early 1992.

“I refer the Prime Minister to the power of attorney, which I have a copy of, that carries the Prime Minister’s signature as a witness on 4 February 1993 from Mr Ralph Blewitt to Mr Bruce Wilson. Mr Blewitt has stated publicly that he did not sign the power of attorney on that date and nor did he sign it in your presence. Did the Prime Minister witness this document in the presence of Mr Blewitt and on the date nominated?”

The Prime Minister once again said she stood by her “comments on the public record in relation to this matter”.

Asked further about this matter this week, the Prime Minister’s office once again referred the AFR to her earlier statements.

Mr Blewitt took defamation action against AWU members who were asking questions about corruption in the union late in 1993, action on which he instructed Ms Gillard and her then boss Bernard Murphy.

The Australian reported this year that Mr Blewitt said the defamation action was vital to silence dissenters because if they had succeeded in ousting him, the slush fund would have been exposed.

Ms Bishop asked: “Given the Prime Minister’s involvement in this defamation action don’t you agree that...[this was ] the purpose of the action?”

The Prime Minister replied: “I say that I stand by my statement on 23 August.”

Ms Bishop then asked how, “given the Prime Minister’s involvement in the power of attorney in early 1993 and the defamation action in late 1993, the Prime Minister [can]continue to claim, as she did to journalists at her press conference on 23 August, that her involvement in the AWU fund ceased in early 1992?”

Ms Gillard replied: “I continue to stand by what I said at that press conference.”

Finally on November 1, Ms Bishop asked the Prime Minister about a statement made by former High Court judge Michael Kirby that “if a person is aware of a serious crime and doesn’t report it to the police, that is what we call a misprison of a felony; if there is a felony, you have to report it, it is a citizen’s duty”.

Ms Bishop asked why the Prime Minister had not reported the fraud involved the Australian Workers Union Workplace Reform Association that she helped establish.

“This question has been asked in the past,” the Prime Minister responded.

“I refer the Deputy Leader of the Opposition to when I dealt with all of these issues extensively on the public record. By the time the matters she refers to came to my attention they were already the subject of inquiry and investigation.”

This question of the timing of events when the AWU corruption started to be investigated is also now the focus of the opposition.

Ms Gillard has said she was unaware that there was anything untoward going on until the issue of corruption in the AWU emerged in mid-1995.

The Prime Minister was asked in Parliament on October 11 about her statement that “once I became aware that I had been deceived I ended my relationship with Mr Wilson”.

Did she also inform the appropriate authority of Mr Wilson’s misappropriation of union funds at that time, she was asked.

The Prime Minister responded that “the appropriate authorities were engaged in this matter” by this point.

But in fact while allegations of corruption surrounding Mr Wilson had started to emerge in August 1995, and Ms Gillard was interviewed by Slater & Gordon managing partners about rumours milling about concerning renovations at her house in September 1995, neither she nor the firm told the AWU, or any authorities, about the slush fund.

However, because the transcript of the Slater & Gordon interview was heavily redacted, it is unclear from the transcript whether either Ms Gillard or the firm’s partners were aware that any money in the fund had been improperly used.

The AWU leadership did not become aware of the slush fund until April 1996 (by which time the notorious Fitzroy property had been sold) and called in the police.

At a press conference in Laos on Tuesday, the Prime Minister asserted that, since she had not been involved in the conveyancing, and had no on-going involvement in the slush fund once it had been established, she was not in a position to know there had been any malfeasance.

“My role here was as a lawyer”, she said.

“I provided advice on the incorporation of an association. I was never connected with the operation of any fund. I was not an office bearer of the association. I was not involved in its activities. I was not involved in any bank accounts it may have held. I was not an official of the AWU. I was not in charge of the conveyancing file. So you are effectively asking me why didn’t I report to authorities things I did not know.”

with Pip Freebairn

The Australian Financial Review

Gillard hides behind non-answers as press, pollies up the pressure

Chris Kenny, The Australian, 10-11 Nov 2012

THE most telling political development of the past month has been the emergence of the Slater and Gordon affair as a mainstream issue. For months it had been pursued only by this newspaper but has now been taken up by our Fairfax competitors and, more importantly, the Opposition.

Julia Gillard now appears panicked as she refuses to answer forensic questions on the matter in parliament. She stonewalls when it is raised in press conferences.

As more journalists ask questions, this makes life more uncomfortable for the Prime Minister. And with parliament sitting for one more week, later this month, she knows it will get worse before it gets better.

What Gillard probably doesn't realise is how she invited this political assault upon herself as an unintended blowback from her notorious misogyny speech.

Until recently the complicated saga of Gillard's involvement in the establishment of a secret union slush fund for then boyfriend Bruce Wilson had broken into major media coverage only once.

That was in August when she seized on a minor yet regrettable mistake, in a background story in The Australian, to demand an apology, criticise the coverage and convene an indignant press conference to put the issue to bed.

This clever tactic, expertly executed, had the desired effect of giving most of the Canberra press gallery the excuse to ignore the questions at the heart of the matter. They bought the Prime Minister's line and decided the Slater and Gordon affair was history.

An email response to a viewer from the ABC's Canberra news editor, John Mulhall, neatly encapsulated this media compliance. "We know The Australian newspaper maintains an abiding interest in events 17 years ago at the law firm Slater and Gordon," he wrote last month, "but the ABC is unaware of any allegation in the public domain which goes to the Prime Minister's integrity."

It might be hard to imagine the ABC adopting a similar policy of incuriosity with a conservative leader but, to be fair, many media organisations have shied away from the story.

In this newspaper, award-winning reporter Hedley Thomas has assiduously investigated the issue, unearthing a series of exclusive reports. His critical breakthrough was revealing the transcript of Gillard's interview with senior law partners during her firm's internal review of AWU matters in 1995.

This confirmed Gillard helped to establish what she described as a "slush fund" and that she had not informed her colleagues or adopted the standard accountability practice of opening a file on the matter. Thomas also revealed that as a result, Gillard's partners lost trust and confidence in her, and she left.

Significantly, last month former Fairfax national managing editor Mark Baker began writing extensively on the issue - recounting, confirming and building on Thomas's revelations. This would have put the fear of God into the Prime Minister's office.

Her office had successfully portrayed the issue as a campaign by the Murdoch press, encouraging other journalists to mock and ignore the story. Gillard had deliberately conflated this newspaper's serious and sober coverage with the "misogynists and nutjobs on the internet" who had been running a vicious campaign against her.

The sometimes factual and sometimes offensive internet claims have perversely helped the Prime Minister because they enabled her to discredit any coverage of the affair.

But this has now changed with the interest of Fairfax and the parliamentary questioning from the opposition. Fairfax can explain its delayed curiosity itself but presumably Baker simply recognised a substantive issue worthy of inquiry. Thomas and Baker have independently continued their probing, as has sacked Fairfax radio host Michael Smith, who blogs on it.

The awakening of the opposition is telling. Despite the eagerness of some MPs, its tactics team chose not to pursue Gillard. Tony Abbott was under attack for being too negative, Labor was complaining of a gender bias against its leader, and (especially with the wounds still raw from the Godwin Grech debacle) the Coalition thought discretion was the better part of valour.

Oppositions have to choose their battles, and they were sitting this one out. Whether or not this was the right decision for the Coalition, it undoubtedly made Gillard relaxed and comfortable.

All that changed on October 9 when Gillard launched her now famous misogynist tirade against the Opposition Leader. It was a blistering, personal assault that insulted Abbott, won praise from feminists but prompted a rethink of opposition tactics.

Suddenly it didn't make sense to take the high road by avoiding personal scrutiny of Gillard when, in return, she indulged in vitriolic character assassination. As Gillard herself might say, it was about to be game on.

Two days later Deputy Opposition Leader Julie Bishop asked in parliament if, once Gillard became aware of Wilson's fraudulent use of the slush fund she had helped to establish, she informed the appropriate authorities. The Prime Minister said: "I gave a press conference about these matters and answered all questions until the federal parliamentary press gallery was exhausted from these questions. I remind the Deputy Leader of the Opposition that, in relation to these matters, there were police investigations that did ensue.

That, of course, did not answer the question.

Bishop asked a similar question this month, and Gillard replied: "By the time the matters she refers to came to my attention they were already the subject of inquiry and investigation."

Gillard's non-answers are problematic. On one hand she has ducked the issue by saying inquiries were under way, on the other she said in Laos this week that she could not report to authorities "things I did not know".

Importantly, however, Gillard clearly knew of the existence of the slush fund that she had helped to establish. On the evidence so far, it seems neither Gillard nor her firm alerted their client (AWU) or the police to this slush fund's existence in 1995.

Bishop will continue to probe, focusing on precisely when Gillard became aware of the fraudulent use of the slush fund, and why she didn't report what she knew about the slush fund to the AWU or the police.

The opposition will be alive to the risks of political overreach. But Gillard is stuck between the rock of stonewalling and the hard place of revealing more to explain herself.

return to letters list