Slush fund that keeps paying out

In Perth, Julia Gillard - 30 years old, single and a woman already with political ambitions - met AWU state secretary Bruce Wilson, a handsome, smooth-talking father of two and accolyte of AWU boss and Labor Party kingmaker Bill Ludwig.

It may not have been love at first sight between the man already being talked about as prime ministerial material and the woman who was, but it later developed into a 3 year relationship.

Even before then, Wilson was hatching plans that would snare Gillard in a corruption scandal through a series of legal transactions, questions about which have shadowed her career for two decades.

In June 1992, with Gillard's legal advice and support, a body called the AWU Workplace Reform Association was registered in Perth with the declared objective of promoting workplace safety and training.

What no one else in the union apart from Wilson and his crony Ralph Blewitt knew then - and would not discover until several years later - was that the association was the mechanism they would use to misappropriate hundreds of thousands of dollars in payments from Thiess and other construction companies, payments that were channelled through secret bank accounts and a private post office box.

Within a year, more than $100,000 siphoned from the association was put towards buying a unit in Kerr Street, Fitzroy. The property was bought in the name of Blewitt, who had never seen it and who now claims to have had no real role in the transaction, and had not received any rental income from the property where Bruce Wilson lived. He also claimed to have received nothing when it was finally sold in early 1996.

The unit was bought by Wilson, by then AWU state secretary in Victoria, using a power-of-attorney drafted and witnessed by Julia Gillard, who was with him at the auction and waived legal fees on the conveyancing work for the transaction, which was completed with $150,000 from a Slater & Gordon loan facility.

When national officials of the AWU finally uncovered the rorting of the Workplace Reform Association, Gillard - who continues to insist that she did nothing wrong and knew of no wrongdoing - was confronted by the senior partners at Slater & Gordon about her failure to brief them about the work she had done and her failure to take advice within the firm about the work or to open a formal file about it on their computer system.

At a meeting with the partners in September 1995 - after dumping the boyfriend she declared had "betrayed" her - Gillard confirmed that rather than the benevolent body implied in its registration documents, she regarded the AWU association from the outset as a "slush fund" to raise money for union election campaigning.

When questioned in detail about allegations union money had been used for renovations on a house she owned in Abbotsford, she said: "I can't categorically rule out that something at my house didn't get paid for by the association or something at my house didn't get paid for by the union or whatever."

At a media conference in late August this year, after the controversy was reignited by the publication of a redacted transcript of that 1995 meeting, Gillard was no longer equivocal.

"I paid for my renovations," she declared. And asked why a body incorporated to promote workplace reform could be a slush fund, she said its purpose was dedicated to funding the election of union officials "committed to reforming workplaces".

Further revelations since August about the events in the early 1990s have reignited the debate, drawn the federal opposition into a concerted attack on the Prime Minister's account of what she knew or didn't know and opened the prospect of renewed police investigations in Victoria and Western Australia.

The Australian newspaper this week published fresh information from detailed diary notes compiled by senior AWU official and now Fair Work Australia commissioner Ian Cambridge, who first blew the whistle on the scandal, and interviews with two former AWU workers who had made allegations to Cambridge involving Gillard in 1996.

Former AWU employee Wayne Hem alleged Wilson had given him instructions to deposit $5000 in bundles of $50 and $100 notes into an account held under Julia Gillard's name. And former union official Helmut Gries, who told Cambridge in September 1995 that union money had been used on renovations of Gillard's house, was quoted as saying he was now unsure of his recollections of those events.

Gillard responded furiously to the Hem allegation, denouncing it as a smear, but did not say whether or not she had knowledge of such a deposit. "This matter has been trawled over for the best part of 20 years and . . . there is not one finding of wrongdoing by me. And the reason for that: I didn't do anything wrong."

With media now focusing with renewed interest on the issue, there is no doubt the trawlers will be busy still when Federal Parliament resumes in a week for the last sittings of the year.

SMEAR v SCANDAL THE STORY SO FAR

JULIA GILLARD

Prime Minister, former at Slater & Gordon

Helped established slush fund rorted by boyfriend Bruce Wilson

Prepared power of attorney for Mr Wilson to buy Fitzroy unit in Ralph Blewitts name

Denied receiving benefit from union for home renovations

Has repeatedly denied any wrongdoing. Says she is the victim of a smear

campaign

BRUCE WILSON

Former AWU official, ex-boyfriend of Ms Gillard

Used slush fund to defraud AWU of more than $400,000

Allegedly ordered $5000 be paid into Julia Gillards bank account

BILL TELIKOSTOGLOU, AKA BILL THE GREEK

Former union official

Accused of having intimate knowledge of union fraud

Involved in botched renovation of Ms Gillards Abbotsford home

WAYNE HEM

Former AWU employee

Worked closely with Mr Wilson and Mr Telikostoglou

Deposited numerous cheques on orders from Mr Wilson, including $5000 to

Ms Gillards account

Reported deposits to former AWU national secretary Ian Cambridge

RALPH BLEWITT

Former AWU official and Bruce Wilson crony

Fitzroy unit bought in his name with stolen union funds

Admits role in fraud and seeks immunity from prosecution in exchange

for giving evidence

NICK STYANT-BROWNE

Former Slater & Gordon partner

Expressed concern about controversial work Ms Gillard did for Mr Wilson while she was working at Slater & Gordon

Released transcript of 1995 meeting between Slater & Gordon executives

and Ms Gillard

Believes Ms Gillard was wilfully blind about the union fraud.

QUESTIONS FOR THE PM

1. In 1995, you were unsure whether union money was spent on your home renovations. Why are you now sure they werent?

2. Why did you write to WA authorities vouching for a workplace reform association you knew was an election slush fund?

3. Was $5000 in cash from boyfriend Bruce Wilson paid into your bank account in 1995 as a former union worker alleges and, if so, why?