The AWU Scandal Unpacked

What is the AWU "scandal" about?

In the early 1990s, two Australian Workers Union officials named Bruce Wilson and Ralph Blewitt used money donated by construction companies to a union election campaign fund (the "AWU Workplace Reform Association") to buy a house at 85 Kerr Street, Fitzroy. This association is the "slush fund" at the centre of the current controversy.

The AWU Workplace Reform Association was intended to be an organisation that would gather and disburse funds for Wilson and Blewitt’s re-election campaign for AWU positions. However, it appears that some of the money was in fact used for the personal gain of the two officials: in particular, the purchase of the house at Kerr Street.

The house was bought in Blewitt’s name for Wilson, who then lived in it as a tenant. The house was bought using money from the association and with a loan from Slater and Gordon.

Wilson was in a relationship with Julia Gillard, a solicitor at law firm Slater and Gordon, at the time.

What role did Julia Gillard play?

Julia Gillard provided legal advice on the incorporation of the AWU Workplace Reform Association. However, she played no official role in the association and says she was not privy to any of its operations.

Gillard claims she had no knowledge of what was going on with the association’s finances. Wilson says that he didn’t tell her.

Slater and Gordon arranged the conveyancing for the sale of the Kerr Street house. Gillard played a minor role in some of the paperwork for the conveyancing. She was also named on the certificate of currency for the mortgage insurance.

In summary, Gillard:

• Provided legal advice for the incorporation of the association.
• Witnessed a power of attorney for Blewitt, used by Wilson to buy the house in Blewitt’s name.
• Attended the auction where the house was purchased.
• Was peripherally involved in at least some routine aspects of the conveyancing and mortgage insurance, although these were principally handled by legal secretary Olive Brosnahan under the management of partner Nick Styant-Browne.
• Was in a relationship with Wilson at the time when the house was bought, and visited the house when Wilson lived there.

Were Bruce Wilson and Ralph Blewitt corrupt?

If the allegations levelled at them are true, probably yes. It certainly appears that Wilson and Blewitt used union funds in an improper manner.

But these allegations have never been tested in any Australian court of law. The affair was investigated by both Victorian and Western Australian police in the 1990s, and possibly by other agencies too.

No charges were laid. Indeed, at the time, setting up incorporated associations for union re-election campaigns was not illegal.

Several reports claim police may be re-opening investigations. So far, nothing has come of this. The fact remains that no charges have ever been laid regarding this affair, and hence there have never been any convictions.

Did Julia Gillard know about the Wilson and Blewitt scam?

As far as we can tell, no.

The Prime Minister has always maintained she did not know about the improper use of funds donated to the AWU association until the AWU found out about it in August 1995, despite providing legal advice on the incorporation of the association. Slater and Gordon were alerted to it in August 1995. They conducted an internal investigation, asking Gillard what she knew.

As mentioned, Gillard was involved in some minor aspects of the initial setting up of the association and in the purchase of the house.

Gillard told journalists in August this year that "once I became aware I had been deceived about a series of matters, I ended my relationship with Mr Wilson".

Wilson says Gillard did not know.

There is no substantiated evidence that Gillard knew about any wrong-doing or misuse of union funds. She points out that the deposit for the house was made by Blewitt, who she believed to be able to afford it.

Gillard has repeatedly explained that she became aware of the suspicions about Blewitt and Wilson only in August 1995.

Did the Prime Minister personally benefit from any union funds?

No. There is no substantiated evidence that Gillard ever received any money from the AWU Workplace Reform Association. The comprehensive affidavit by Ian Cambridge regarding the investigation and audit of the association does not list any funds disbursed to Julia Gillard.

It has been alleged that some of the renovations done on an Abbotsford property she owned in the 1990s was paid for with union money. The Prime Minister categorically denies this and there is no substantiated evidence to say otherwise.

What about the $5000?

The Australian’s Hedley Thomas has published a report alleging that a union employee named Wayne Hem deposited $5000 from Wilson in 1995 to a bank account in Julia Gillard’s name.

We only have Hem’s word on the matter; the allegation cannot be said to be substantiated, as so far Thomas has not published any of the supporting bank records he claims to have seen. Wilson himself has told journalist Steve Lewis that "look, it’s possible, but I don’t specifically recall".

The Prime Minister said yesterday she does not recall the money being deposited, saying she would have remembered a large sum of money turning up in her account. Gillard says she took steps to obtain bank records of her account but these were not available owing to the length of time since the deposit took place.

Even if the money was given to Gillard, there is no information on the public record to suggest the money was sourced improperly, or that it came from the AWU association, or that it was due to the proceeds of illegal or improper activity.

Should Gillard have reported the malfeasance by Blewitt and Wilson to the authorities?

Gillard says she became aware of the suspicions at the same time that Slater and Gordon did, when the law firm was alerted by the AWU. She says that she had no concrete information about any wrong-doing, and therefore had nothing to report.

The AWU did conduct its own internal investigation into the matter, headed by respected industrial lawyer and then-AWU secretary Ian Cambridge (now a Fair Work Commissioner). Cambridge found significant improprieties when he reported on the matter in 1996. However, no charges were laid by police or other authorities on the basis of Cambridge’s statutory declaration. Cambridge did not find any wrong-doing by Gillard. He did press for a Royal Commission, but it didn’t happen.

Was Julia Gillard sacked by Slater and Gordon as a result of the AWU affair?

No. Gillard left the firm to run for a Victorian Senate seat.

Having said that, relationships at Slater and Gordon were not entirely amicable. S&G partner Nick Styant-Browne was dissatisfied with her account of her relationship with Bruce Wilson. As he told the ABC, "there was deep disquiet amongst the partnership about Ms Gillard’s conduct". Styant-Browne argues that "that there is absolutely no doubt that Ms Gillard not only knew of the Slater & Gordon mortgage in March of 1993, but was specifically involved in taking steps to facilitate that mortgage".

So, Julia Gillard did know about the mortgage?

Not according to the Prime Minister. She argues that Nick Styant-Browne handled the conveyancing and that she did not recall the particular mortgage insurance certificate addressed in her name. "The conveyancing file was a file of Nick Styant-Browne’s, he was the partner in charge. In terms of the day to day work on the file, it would have been done by the paralegal, Olive Brosnahan," she said yesterday.

If Julia Gillard did know about the activities of Wilson and Blewitt, does this mean she was corrupt?

If Julia Gillard aided and abetted her then-boyfriend in the improper use of union monies to buy the house, and if she knew about the mortgage he bought with those union funds, and if she hid her involvement from the firm by not opening a file, any of these would be serious charges.

But, in fact, all of these claims are contested and none have been substantiated.

Even if they were proven, none of them would necessarily constitute illegal conduct. Nor would they necessarily render Gillard constitutionally ineligible to be Prime Minister — for this, she would have to be found guilty of a criminal charge with a sentence of longer than a year.

Has there been a cover-up?

No. In fact, the Prime Minister has been unusually open and transparent in her responses to questions about this issue.

In August, the Prime Minister hosted a marathon press conference in which she answered every question put to her on the matter. Yesterday, she hosted another long conference which dealt with the issue again. In the course of the two press conferences, the Prime Minister has spent nearly two hours answering press gallery questions on these matters.

The allegations of a cover-up centre around Gillard’s decision not to open a file when giving legal advice on the AWU association. Nick Styant-Browne is on the record as being critical of that decision.

There have also been claims of missing files in various state jurisdictions relating to this matter. Some of these files have since been found.

Despite these claims, there is no evidence of a cover-up. No documents have been destroyed, as far as we know: indeed, documents continue to surface from 17 years ago.

Nor is there evidence that the Prime Minister or her office have tried to stifle or in any other way hinder media interest in these stories. It is true that Gillard has threatened to sue over claims in the media she regards as defamatory. However, no defamation action has actually gone to court. And defamation is not really a "cover-up", either, because defamation action can be taken only against public allegations that are untruthful.

So, what are the allegations against the Prime Minister?

According to the Prime Minister’s office, nothing. Despite all that has been written about the affair, the Prime Minister claims there is no specific allegation that has been made about her.

During yesterday’s press conference, no new claims emerged.

However, Michael Smith, formerly a radio host for 2UE, has made a formal allegation to Victorian police. He alleges that Gillard falsified the power of attorney of Blewitt, because she did not witness it. This would contravene Section 83A of the Crimes Act Victoria. relating to the creation of false documents.

Julia Gillard denies the allegation, saying she did witness the document correctly, and saying it comes down to her word against Blewitt’s. In the absence of conclusive documentary evidence, if it is the Prime Minister’s word against Ralph Blewitt’s, it is difficult to imagine she could ever be charged.

What about the Prime Minister’s judgment and credibility?

Daily Telegraph journalist Steve Lewis argues the current claims go to the Prime Minister’s "judgment and credibility".

"The current issues in the AWU scandal raise concerns about the Prime Minister’s judgment and credibility," he writes.

Undoubtedly, they do. But so what? "Judgment and credibility" are simply media constructs: they have no legal or constitutional relevance. In a democracy, voters get to decide who they elect to parliament. They may decide that issues of character are important; equally, they may decide to vote according to which party embraces the policies they desire. Or they may vote for other reasons altogether: for reasons of personal loyalty to a popular local member, for instance.

Ultimately, arguments about relevance of the AWU affair to the Prime Minister’s fitness for office are a matter for voters, whatever the media may assert.