AWU affair

The AWU scandal is an allegation of embezzlement of funds in the early 1990s by Bruce Wilson, an official of the Australian Workers' Union (AWU). It has received significant media attention in Australia as the current Australian Prime Minister, Julia Gillard, was involved in a romantic relationship with Wilson at the time of the alleged fraud and provided legal assistance in the establishment of the fund at the centre of the allegations. The Australian Workers Union never brought charges against Wilson regarding the matter. Gillard's conduct was the subject of an internal investigation by Slater and Gordon, the law firm for whom Gillard was then working as a Partner. The investigator found no evidence that she was involved in any wrongdoing. Gillard has denied engaging in any illegality.

Background

In 1992 the legal entity "AWU Workplace Reform Association" was established for Australian Workers Union state secretary Bruce Wilson and Ralph Blewitt, without the knowledge of the national leaders of the AWU. As part of the formal establishment process, the association was described as being formed for the purpose of "development of changes to work to achieve safe workplaces."

In 1993 Wilson arranged the purchase of a house for Ralph Blewitt. The house was part paid by funds from the "AWU Workplace Reform Association", with the balance lent by Slater & Gordon.

A police investigation in 1995 and 1996 looked into the possible misappropriation of funds through the association, and in 1996 Ian Cambridge, former national secretary of the AWU and currently a commissioner of Fair Work Australia, lodged an affidavit claiming that Wilson and Blewitt had extorted money from construction companies. A memo written in 1997 by WA police fraud squad Detective Sergeant David McAlpine stated that police suspected that the association was used by Wilson and Blewitt to allegedly fraudulently obtain over $400,000 from major construction companies. Nevertheless, after a "thorough investigation", no charges were laid, and the police decided not to take any further action.

Slater & Gordon lost the AWU account over the affair.

Allegations regarding Julia Gillard

In 1991, while she was a lawyer with the firm Slater & Gordon in Melbourne, Gillard was also in a romantic relationship with Bruce Wilson who was married with two kids and a wife in Perth. Gillard provided legal assistance to help establish the AWU Workplace Reform Association. Gillard has subsequently described the intent of the association as being to assist in the re-election of union officials and as a "slush fund", which commentators have identified as being at odds with the association's stated purpose. Gillard responded by stating that she only provided legal assistance, and that she neither drafted the passage in the legal documentation describing the association's purpose, nor signed the papers. Contrary to standard practice, Gillard did not open a file at the law firm covering the work.

Slater and Gordon examined Gillard's conduct in an internal investigation into the affair in 1995. In 2012, Nick Styant-Browne, a former partner of Slater & Gordon, alleged that Gillard was interviewed in September 1995 to determine her involvement, if any, in Wilson's alleged fraud. Gillard was unable to categorically rule out being a beneficiary of the fund, because there was a dispute over one part of the renovation which she did not pay for. Styant-Browne stated that the interview was recorded and transcribed, and alleged that Gillard resigned as a result of the investigation. However, the equity partner who interviewed Gillard in 1995, Peter Gordon, found no evidence Gillard was involved in any wrongdoing, and he confirmed in 2012 that was still his opinion. Furthermore, in response to Styant-Browne's assertions, Andrew Grech, the Managing Director of Slater & Gordon, also stated that the 1995 investigation found no improper behaviour by Gillard, and said that Gillard did not resign as a result of the investigation, but instead took a leave of absence in order to campaign for a senate position, and resigned in 1996 to work for the Victorian opposition leader.

Contemporaneously, Phil Gude, a minister in the Victorian Liberal Government, spoke of Gillard's connection to the affair in the Victorian Parliament on 12 October 1995. Gude alleged that Gillard's senate candidature "may not be the only reason she is no longer working for Slater & Gordon" and that she may have indirectly received a financial benefit through the association, and may therefore have been a recipient of fraudulently obtained funds. In particular, it was alleged that part of her home renovations were paid for out of the fund without Gillard's knowledge, although Gillard has repeatedly denied that this occurred, and no evidence that disproves her account has been produced. In 2012 it was revealed that Ian Cambridge, in investigating the claims, had recorded in his diary on 25 September 1995, that Victorian AWU official Helmut Gries had alleged that union funds had been used to fund renovations on Gillard's home. However, when asked about the matter in 2012, Gries stated that although he considered Cambridge very honest, he did not believe he made the allegation to Cambridge in 1996, and that he would not have been aware of any issues in regard to the renovations. The issue was raised in the Victorian state parliament by a Liberal Party MP in 2001.

In 2011 reporter Glenn Milne covered the allegations, on the website of The Australian, including a claim regarding Gillard's living arrangements with Wilson. Gillard contacted the chief executive of Milne's paper and threatened legal action over the story. The story was removed and an apology and retraction was posted in its place. Milne based part of the article on a statutory declaration by a former AWU vice president, Bob Kernohan, that had been aired by 2UE presenter, Michael Smith. ABC's television program Media Watch found that the allegation had been considered untrue by News Limited lawyers and removed from an article Milne wrote in 2007. Michael Smith left his position at 2UE over editorial differences that emerged as a result of an interview which he had recorded with Kernohan about the allegations but never aired, and Milne was dropped from his roles at The Australian and the ABC's The Insiders program.

The scandal was raised in Federal Parliament in June 2012 by Labor MP Robert McClelland. McClelland had been demoted some six months earlier. In a speech condemning profiteering by union officials, McClelland said that "I know the Prime Minister is quite familiar with this area of the law; as lawyers in the mid-1990s, we were involved in a matter representing opposing clients" and that this had coloured his thinking on legal reforms. McClelland had worked for Ian Cambridge, the former AWU national secretary who had exposed the AWU scandal.

On 23 August 2012, Gillard conducted a surprise and lengthy press conference at which she addressed the allegations in depth for the first time. She restated her innocence of any wrongdoing, and claimed that she was the victim of a sexist online smear campaign. Gillard confirmed her 1995 statement that her understanding of the purpose of the association was that it was a re-election fund for union officials. She also expressed regret that she had neglected to open a file on the case at Slater & Gordon.

In November 2012, The Australian reported that Ian Cambridge recorded in his diary in 1996 that Wayne Hem claimed that Wilson had given him approximately $5,000 in cash after Wilson had spent a night at a casino, and instructed him to deposit the amount into Julia Gillard's bank account. Hem could not confirm that the account was Julia Gillard's, nor was it known where the funds originated from or why they may have been deposited, and Gillard has stated that she has no memory of the deposit being made.

Also in November, 2012, Ralph Blewitt provided statements and a number of files to police in regard to the events in return for immunity from prosecution. Although the statements have not been released, Blewitt alleged that Gillard did not properly witness the signing of a legal power of attorney – an allegation denied by Gillard, who also questioned Blewitt's credibility. Shortly before Gillard's statement, Bruce Wilson spoke to the press and denied that Julia Gillard had any knowledge about the alleged fraud.

External links

• Transcript of press conference, Canberra (23 August 2012) Press Office, Prime Minister of Australia.