THEIR ABC Won't tell full story on Labor Union Slush funds

ABC won't tell the full story of slush funds

Piers Akerman
The Sunday Telegraph
December 7,2013

EXPECT astonishment from the ABC's vast national audience when the federal government places trade-union slush funds front-and-centre of a major inquiry in the New Year.

The rusted-on viewers and listeners will be bewildered because the taxpayer-funded state-owned broadcaster has imposed a regimen of strict censorship on the key element in the inquiry - the misuse of money from the AWU association which was established with the assistance of legal advice from former Prime Minister Julia Gillard when she was a partner in the Victorian Labor law firm Slater & Gordon.

Those who don't take their news solely from the ABC would be well aware that the Victorian police are conducting a major inquiry into Ms Gillard's role in the establishment of the Australian Workers' Union Workplace Reform Association by her then boyfriend, Bruce Wilson and his AWU mate Ralph Blewitt in 1992.

Early last week, The Australian newspaper revealed that Fair Work Commissioner and former AWU boss Ian Cambridge has given sworn evidence of "gross irregularities" in the union slush fund that Ms Gillard advised on.

Wilson, who was in a long-term relationship with Ms Gillard in the 1990s is the target of a police investigation and Victorian fraud squad detectives have already seized files from Slater & Gordon, files which Wilson claims should be subject to client-lawyer privilege.

The detectives are seeking to establish whether the documents were created in furtherance of a fraud, which would render void the privilege claim and make them available as evidence.

The court heard Mr Cambridge had provided "substantial evidence" in his affidavit about misappropriation of union funds by Ms Gillard.

Lawyer Ron Gipp, representing lead fraud squad detective Ross Mitchell, said Mr Cambridge's evidence "puts it beyond any doubt" that there were "gross irregularities" in the funding of the association, which Ms Gillard referred to as a "slush fund" in an exit interview before she left Slater & Gordon.

He said statements from Mr Blewitt - "essentially a full confession by a co-accused" - describe the slush fund as a "scam".

Ms Gillard has repeatedly denied wrongdoing and said she had no knowledge of the fund's operations other than it was a "slush fund" for the re-election of union officials.

Money from the fund was used to purchase the Fitzroy house in Mr Blewitt's name at a 1993 auction, which Ms Gillard attended with Mr Wilson, who subsequently lived in the property.

Slater & Gordon handled the conveyancing and helped provide finance.

That's the background for ABC fans who have been kept in the dark and goes someway to explaining why many other Australians not affected by the ABC's news blackout are watching every legal move in this case.

In her exit interview with Slater & Gordon on September 1, 1995, Ms Gillard said: "It's common practice, indeed every union has what it refers to as a re-election fund, slush fund".

Whether every union does indeed have a slush fund is something the federal government should be looking into, and probably will, informed as it is by the material being developed by the ongoing AWU investigation.

Even without an official inquiry, it has emerged that money was used from a union slush fund known as the McLean Forum to finance campaigns in internal elections in the TWU's Queensland branch and to bankroll candidates in the Flight Attendants Association of Australia and the Health Services Union's NSW Branch.

Sums of at least $500,000 were reportedly spent in the TWU's Queensland campaign.

It was reported in March that a fund known as Industry 2020 donated funds for HSU elections and a 2008 article in The Sydney Morning Herald noted that former Prime Minister Julia Gillard "was a guest speaker at the inaugural fundraising lunch for the Industry 2020 fund at Flemington racecourse, which generated about $250,000 with nearly half that profit".

In that article it was also suggested that "two other fundraisers have been held for Industry 2020, including a small event at Melbourne's Greek Museum in Melbourne last year attended by (current Opposition leader) Mr (Bill) Shorten".

The Age reported in May that ASIC records in May showed that Industry 2020 was a registered company under Mr Cesar Melhem's sole directorship. Mr Melhem was formerly the AWU Victorian Secretary but is now a Victorian Labor MP, a more recent search however indicated that two companies, Industry 2020 Pty Ltd and Industry 2020 Ltd are both under voluntary external administration.

Two weeks ago, The Age reported that the nation's largest construction union, the CFMEU, had used a drug and alcohol charity to raise up to $1 million for union activities.

It has also been revealed that the Queensland branch of the Shop, Distributive and Allied Union has for a decade had an undisclosed internal slush fund - wrongly promoted to contributors as being tax deductible - to support union boss, Mr Chris Ketter's, re-election as State Secretary of the union. Mr Ketter was the ALP's lead Senate candidate in Queensland at the 2013 election.

The ongoing court case against former Labor MP and former HSU boss Craig Thomson over his alleged misuse of trade union funds has given added impetus to the need for a wider investigation into trade unions and their handling of members' funds.

The establishment of slush funds, the practice Ms Gillard regards as "common place" and carried out by "every union" must be examined to ensure that such operations are held to the same exacting standards of governance as organisations which hold investors' money.

Trade union members deserve to know who is responsible for holding their compulsory contributions and how their cash is being spent.

For too long, the union bosses have insisted that the Labor Party turn a blind eye to union activities.

Next year, the ALP must be given the opportunity to demonstrate it truly has the workers' interests at heart.

It will send a disgraceful message if it doesn't champion the broadest inquiry into the operation of slush funds and the union movement's handling of members' money more generally.

Surely it has nothing to hide?