Why you should have faith in the legal profession
The AWU Scandal - Question Time Today

The AWU Scandal - an introduction - Revised, evening 31/10/2012

I've been asked to put a few words together as a somewhat detailed introduction to a speech - I thought I'd share it with you here for any improvements!


In 1987 Julia Gillard joined the law firm Slater and Gordon.

In 1990, at the age of 29 Julia Gillard was admitted as a partner in the firm.

At the time, other than sole practitioners, law firms operated as partnerships - it is a new and globally unique experiment for a law firm to list as a public company on a stock exchange.   The experiment is in its relatively early days - with Slater and Gordon being the listed company "in the test tube".   Only time will tell which of Slater and Gordon's over-riding duties will take precedence - the duty to continuous disclosure to the stock exchange, the duty to act as directed by its owners, the duty to its clients, the duty it has to the court.   Lawyers are accorded special privileges with a presumption in their favour of ethical behaviour at all times.  Listed company executives seem not to attract similar public sentiment.

A partnership has been the tradition structure for the organised practice of law.   It imposes very high obligations on each individual person within it.

In a partnership, each member is jointly and severally liable for the actions of each other - whether those actions are negligent 0r not.

In other words, an action by one partner in a law firm binds all of the other partners.

That is why partnership law and legal standards have developed to impose the highest ethical standards of behaviour on members of a human partnership.

The standard is known as an obligation of “utmost good faith”.

It is a non-negotiable duty on each partner to act in “utmost good faith” towards each other.

That is to tell each other the truth and the whole truth and nothing but the truth.  

To keep meticulous notes about instructions from clients and actions taken upon those instructions.

Not to do anything that could expose other partners to big payouts – especially if the action could fall outside the terms of the partnership's Professional Indemnity insurance coverage - because it won’t just be the partner at fault, it will be all of the partners who will get lumbered.

Every lawyer understands that obligation to act “in utmost good faith” to each other.

That is why lawyers open files on every client with whom they deal .   That is why lawyers are trained instinctively to record in writing instructions given to them by clients, and to confirm by letter to the client those instructions.  

That is why partnerships have meetings regularly, to fully inform each other about their work (where conflicts and the law permit), and so that the wiser heads can see problems developing and try to nip them in the bud.

And lawyers have obligations to the Supreme Court once they are admitted to practice.

They are officers of the court, and they must tell be truthful.   Advocating for a person in whose guilt or innocence the lawyer has doubt is an entirely different matter from knowingly making a false statement.   A lawyer cannot knowingly tell lies and remain an unblemished member of his profession.

And of course lawyers have duties to their client.   If a law firm is retained by Telstra or BHP to do Telstra’s or BHP’s legal work – and one of their ethical lawyers (and the profession has an obligation to ensure the public presumption is that lawyers act ethically always) is approached  by a Telstra or BHP executive with a dodgy proposal to set up a sham corporate structure, using the words “Telstra” or “BHP” in the title – any reasonable person would expect that lawyer to blow the whistle loud and long.

But Julia Gillard did not do that with her boyfriend Bruce Wilson who was married with children and whose day job was a state secretary with her client the AWU.

She did not report his questionable activities to her firm's significant client the AWU - of which she was one of the engagement partners.

She did not inform her other partners about the dodgy work she was doing, although there is some evidence that she did speak about it with the man her government recently appointed as a Federal Court Judge, Bernard Murphy.

She did not open a file about the Australian Workers’ Union Workplace Reform Association.

She wrote the words “Australian Workers’ Union Workplace Reform Association” in her own handwriting on the application form sent to the Western Australian Corporate Affairs Commissioner.

The WA Corporate Affairs Commissioner refused initially to incorporate the sham entity.  He made
reasonable enquiries about its bona fides.  

Julia Gillard did not report to her boyfriend the reasonablness and lawful grounding of the Commissioner's objections.   She did not suggest an alternative vehicle to achieve her client's expressed aims.   She did not refer to the rules of the AWU which expressly prohibited the actions Ms Gillard was taking (rules which existed so as to avoid precisely the situation that occured with the AWU-WRA - embezzlement of money).

No, Julia Gillard wrote to the Corporate Affairs Commissioner, using her position and credibility as an officer of the court and as a partner with Slater and Gordon, to place on the record a false statement vouching for the proper nature of the sham association.

She wrote that it was a genuine vehicle for workplace reform and a proper, authorised and necessary subsidiary of the AWU.   She knew it was in fact set up with the intention of operating as a slush fund to raise and hold money for her boyfriend’s personal benefit.

That benefit at the start was funding for his election to a paid role in the union.

Once the scam was up and running, money from the slush fund was used to buy a house and to whatever other purpose several hundreds of dollars in Australian cash can be put.  

Hundreds of thousands of dollars came out in cash, much of the cash withdrawals coinciding with trips to Sydney for meetings of the national leadership group of the AWU, chaired by Bill Ludwig.

Money came in from the construction company Thiess.   Money went in to Thiess from the Western Australian Government Building and Construction Industry Training Fund.

Gillard knew the association “passed itself off” as being a related entity of the Australian Workers’ Union”.   She knew or should have known that the union’s rules prohibited the establishment of an entity like that.

When her partners found out about her deception, they hit the roof.   Ms Gillard had failed in
her duty to them of “utmost good faith” and had exposed the partnership to damages payments it could do without given its then perilously illiquid state.

Ms Gillard was given her marching orders.   I might add, the Law Institute should have been informed about all of this – I assume no report to it was made and I would be interested to know how it would have dealt with her, taking into account a series of prima face indications of grossly improper behaviour.

Months after setting up what she called a union slush fund, Ms Gillard went to the house auction where her boyfriend, married with 2 sons, bought a house.

He signed the contract for sale on 13 February, 1993.

Next to his signature, undated, is handwriting that says “Ralph Blewitt, as per Power of Attorney”

No written Power of Attorney was present at the time of signing.

On he 15th of Febraury, Wilson flew to Perth to install Blewitt as the AWU branch secretary.

We are told by Blewitt that Wilson produced a one page document, placed it on Blewitt's desk, and told Blewitt to sign it.   Wilson said it was a legal document to put the house Wilson wanted to purchase into Blewitt's name.   Blewitt, signed it.   Blewitt has explained that he felt under pressure to please his boss.

Julia Gillard was not present at the time or place of signing.

However the actual document states that Julia Gillard witnessed Blewitt signing it – on 4 February, nearly 2 weeks earlier.   Signed, Sealed and Delivered to use the legal parlance on what purports then to be a Deed.

Julia Gillard’s firm Slater and Gordon relied on that document, which purportedly gave Wilson the power to buy property and to do that only – to approve a $150,000 loan given to Blewitt.

Blewitt ended up lumbered with a $150,000 loan he knew nothing about and which he manifestly could not afford to service.   His only asset was his matrimonial home in which he was a joint proprietor, it was worth $77,000 and was encumbered with a $74,000 mortgage.   His only official income was his union organiser salary of $40K odd.

Well Wilson was caught fiddling the books nearly 3 years later in Melbourne in relation to accounts established and operated in Melbourne.

But the Workplace Reform Association was not then known about by the union.

Wilson was forced out of his job with the union.

Gillard was forced out her job as a lawyer and has never practised law since.

Slater and Gordon acted for Wilson up until the moment of his separation from the union.

Almost $200,000 was returned to companies from a secret (ie unknown to the national leadership of the union) slush fund operated by Wilson and into which he or persons close to him had placed the money extracted from those companies.   The account was called the AWU Members Welfare Association No 1 Account.

The Victoria Police said in its report writing off a report of fraud in Victoria in relation to Wilson and that account, that it was to his credit that when challenged he returned money to the companies.

Wilson and Blewitt continued to invoice Thiess even after his dismissal from the AWU at a time when he could in no way claim to be a representative of the AWU.   His dismissal was well known and publicly reported.   When taken with the manifest absence of any purported "Workplace Reform Advisers" at the Dawesville Cut project, the continued payment by Thiess of invoices raised by the slush fund created by Ms Gillard lends credence to a push by WA Police contemplating the laying of fraud charges against 4 known persons, including persons employed at Thiess.

Joe Trio was married to Bruce Wilson's sister.   Joe Trio was  Bruce Wilson's brother-in-law.   Joe Trio was the General Manager for Thiess in Western Australia.

Bruce Wilson had been on the board of the Building and Construction Industry Training Fund in the lead up to the Dawesville Cut project, awarded to Thiess.   Apparently Christmas at the Wilson/Trio households in 1991 brought much good cheer and anticipation of a great year ahead.