George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Hansard source

For more than a year, and increasingly over recent weeks, there has been growing concern over the scandal involving the Australian Workers' Union Workplace Reform Association—described by Ms Julia Gillard as 'a slush fund'—the use of the association to defraud AWU members and donors to the fund, and the role of Ms Gillard in the creation and operation of the fund. The Prime Minister's response to the scandal has used every tool in the political spin-master's kit. First she sought to discredit and professionally damage the journalists who broke the story. Then she ridiculed it. Pre-emptive press conferences were used as a device to avoid answering specific and detailed questions on the floor of the parliament. But, as new and more damaging facts have emerged on an almost daily basis, the Prime Minister's attempts to portray the story as insubstantial and fanciful—to laugh it off and deride her accusers—have come to seem increasingly desperate and improbable.

The allegations against her are serious, they are made by experienced and credible people and they cannot be ignored. They come from both of the national newspapers, the Australian and the Australian Financial Review, as well as the other Fairfax titles, the television networks, including the national broadcaster—somewhat late to the party, it must be said, but nevertheless now pursuing the issue with vigour—and, now, virtually the whole of the Australian media. The journalists who have led the investigation include Hedley Thomas, one of Australia's most awarded investigative journalists, with five Walkley Awards to his name; Leigh Sales of ABC's 7.30; Mark Baker of the Age and Laura Tingle of the Australian Financial Reviewhardly right-wing 'nut jobs'. The reality is that the Prime Minister faces serious and specific allegations of improper conduct, and possible illegality, which go to her personal integrity and fitness for office. Her tactic of ridiculing her accusers and avoiding the issue only reinforces the growing public perception that she has something to hide.

Amid all the complexities of the various legal transactions and money flows, the central facts of the case are essentially quite simple. In 1992, the AWU Workplace Reform Association was established as a vehicle for fraud. In the course of the next few years, the substantial sums of money paid into the bank account operated by the association—both by innocent members of the AWU and commercial donors like Thiess, wishing to support its ostensibly honest objectives—were diverted to the personal use and benefit of two AWU officials in particular, Mr Bruce Wilson, then the Victorian State Secretary of the AWU, and Mr Ralph Blewitt, who has been described as his 'close associate'. Among other things, $100,000 of those funds—effectively, stolen money—were used towards the purchase of a house at 85 Kerr Street, Fitzroy for the benefit of Bruce Wilson. In an interview on 7.30 last night, Wilson confirmed the use of moneys from the fund for that acquisition. For reasons which have never been explained, the property was purchased in the name of Ralph Blewitt under a power of attorney given to Wilson. The solicitor who drew the power of attorney was Ms Gillard. Ms Gillard was also involved in the conveyance of the property, and indeed attended the auction in February 1993.

The association was a sham from the start. It was set up on the advice of Ms Gillard, then a partner of the law firm Slater & Gordon, and she acted professionally in its establishment. The AWU was a client of Ms Gillard's firm. At the time, Wilson was in a personal relationship with Ms Gillard. This fact itself raises issues of potential conflict of interest. It also demonstrates the implausibility of Ms Gillard's attempts to characterise her involvement as an arm's length professional transaction of whose nature and context she was unaware.

It is important to understand Ms Gillard's knowledge of the nature and purpose of the AWU Workplace Reform Association, for that is a central issue in the case. This is how Ms Gillard described the association in her exit interview from Slater & Gordon on 11 September 1995:

It's common practice, indeed every union has what it refers to as a re-election fund, slush fund, whatever, which is the funds that the leadership team, into which the leadership team puts money so that they can finance their next election campaign. … they can cost $10,000, $20,000—they're not cheap. So the usual mechanism people use to amass that amount of money is that they require the officials who ran on their ticket to enter payroll deduction schemes where money each week or fortnight goes from their pay into a bank account which is used for re-election purposes from time to time. They also have different fundraisers, dinners and raffles and so on, to amass the necessary amount of money to mount their re-election campaign.

She went on to say:

The thinking behind the forming of incorporated associations is that it had been our experience that if you did it in a less formal way, you just had someone, say Fred Bloggs, say, oh look, I'll just open a bank account and everybody can put the money into there, the problem developed that when the leadership team fractured, as relatively commonly happens, you got into a very difficult dispute about who was the owner of the monies in the bank account, so it was better to have an incorporated association, a legal entity, into which people could participate as members, that was the holder of the account.

So there is no doubt, no doubt whatsoever, that, at the time she was involved in setting up the slush fund, Ms Gillard knew what its purpose was—indeed, the choice of an incorporated association as the entity to hold the funds for union election purposes was Ms Gillard's brainchild, her 'thinking', as she said.

However the objects of the association, set out in rule 3 of the rules, do not disclose that the purpose of the association was to be a holding entity for trade union election campaign funds. A variety of vaguely-expressed, rather innocuous objects are recited, declaring the association to be for the advancement of workers' wellbeing and like purposes, not to finance the election of the ticket of a faction of officials within the union. On a fair reading of the objects clause, the conclusion seems inescapable that the provision is written to conceal, not to explain, its purpose. The concealment of the true purpose of the association is even more plain from an advertisement placed in the West Australian newspaper, which describes the purposes of the association as follows:

The Association is formed for the purpose of propagating and encouraging workplace reform for workers performing construction and maintenance work.

It is important to set out subclause 2 of the objects clause, which provides:

The property and income of the Association must be applied solely in accordance with the objects of the Association and no part of that property or income may be paid or otherwise distributed, directly or indirectly, to members, except in good faith in the promotion of those objects.

But that was not to be.

If it was Ms Gillard's 'thinking' and Wilson's and Blewitt's intention to set up the association as a device for deceiving contributing members and external donors into believing that their donations would be used consistently with the objects of the association or, indeed, for a purpose associated with the broader objectives of the AWU itself, but in fact the money was to be used for their own private purposes—namely, their election campaigns—then, at that stage, there was a conspiracy to defraud the donors, and all persons who assisted in or facilitated the setting up of the organisation, with that awareness, were parties to the conspiracy to defraud.

In the extract from her exit interview which I have quoted, Ms Gillard in effect admitted that, at the time, she knew that the funds would be used not for the purposes indicated by the name and objects of the association but for the private purposes of Wilson and Blewitt. In other words, she knew the association she acted in setting up was to be used to deceive companies into donating money for a purpose alien to that which they thought their donations would be used for and members into contributing for a purpose alien to what they thought their contribution would be for. If that was the case, she was a party to a conspiracy to defraud.

One of the external donors, Thiess, actually says it was misled, and made a complaint to the police dated 22 August 1996. In the event that the Thiess funds were misapplied, there was a crime committed when they were paid—namely, the crime of obtaining money by false pretences. Furthermore, it was necessary, in order to obtain the registration of the association, for Ms Gillard, as the solicitor responsible, to certify to the Western Australian Corporate Affairs Commission that the association was being incorporated for a bona fide purpose consistent with the incorporating documents lodged. She did so. In doing so, she made a knowingly false declaration which appears to be in breach of section 170 of the Western Australian criminal code.

Furthermore, the certification provision, section 5 of the Western Australian Associations Incorporation Act, also requires the applicant to verify that the association has more than five members. Ms Gillard did so. However, the association, as Ms Gillard well knew, only had two members—Wilson and Blewitt. While there might be room for argument about the vagueness of the objects, there is no vagary about this: Ms Gillard falsely certified the association to be compliant in respect of its number of members. She knew it was not and, once again, appears to have breached section 170 of the Western Australian Criminal Code. As well, since one of Slater & Gordon's principal clients was the AWU, Ms Gillard must be taken to have been aware of the rules of that union. She must therefore have been aware of the fact that the establishment of such an association would have required a resolution of the executive of the union. No such resolution was ever passed. Ms Gillard either knew that or neglected to inform herself of it. The certification to the Western Australian Corporate Affairs Commission of compliance seems also to have been false in that respect.

One thing which makes this matter particularly suspicious is that no file was created. Thus, Ms Gillard's work was effectively concealed from her firm, an issue about which she was challenged in her exit interview, and which ultimately meant that she had put Slater & Gordon into a position of conflict between two clients—the association and the Australian Workers Union itself, which resulted ultimately in the loss to that firm of the AWU, one of its biggest and most lucrative clients—no doubt one of the reasons for Ms Gillard's hasty exit from the firm. The AWU work went to the rival Labor-associated law firm Maurice Blackburn and, by a remarkable coincidence, the solicitor who took it over is none other than the person who serves as Attorney-General in Ms Gillard's government, Ms Nicola Roxon. To add further intrigue to the affair, the file containing the original documents, which would reveal in more detail Ms Gillard's knowledge and involvement in this matter, has mysteriously and inexplicably disappeared from the archives of the Western Australian Corporate Affairs Commission and cannot be located.

I do not have time today to explore the subsequent use of the Workplace Reform Association to defraud its members, in particular by the acquisition of the Kerr Street property and the cash payments transacted through the fund. I will deal with those matters on a subsequent occasion. But it is already clear that, from its inception, Ms Julia Gillard's involvement in this matter has been characterised by concealment, deception, professional misconduct and, it would appear, several breaches of the criminal law.