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Backdrop to AWU Workplace Reform Association - Norm Gallagher's trial, conviction and jailing for secret commissions

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Norm Gallagher's conviction, appeals and jailing for receiving secret commissions was front page news for much of the 1980s.

The AWU WRA Inc affair should be viewed in this context.  Gallagher's crimes were widely reported and the effort that went into incorporating the Workplace Reform Association with the AWU in its name appears to aimed at concealing the transmission of secret commissions from Thiess to Wilson et al.

Here's Hedley Thomas writing in The Australian

Two chocolate-brick and timber houses rise above windswept plains at McLoughlins Beach, a three-hour drive from Melbourne. Their front doors are separated by sparse lawns and a curling bitumen road to a South Gippsland community too small to support a general store.

The houses — and a couple more in McLoughlins Beach that went unnoticed by police and lawyers at the time — are notorious for having once belonged to Norm Gallagher when he was the powerful head of Victoria’s militant Builders Labourers Federation.

They were quietly built for Gallagher almost 40 years ago thanks to the many secret commissions — materials and labour — that were given by developers and contractors. There were bogus in­voices to conceal the work. Builders spoke in code to describe it. The BLF’s notorious strongman sought the bribes — and his benefactors gave generously to keep Gallagher “on side”.

McLoughlins Beach is still a quiet enclave of shacks and modest houses. It is favoured by bat­tlers and retirees with pensioner budgets and few pretensions. Some of them like to catch fish.

It has nothing in common with Victoria’s wealthy seaside playgrounds of Portsea and the Mornington Peninsula, which boast plush holiday homes, wineries, elegant hotels and golf courses.

But the two Gallagher houses, which to this day remain in the family — his son owns one, another relative the other — stand out. They are enduring and unattractive monuments to an era of union corruption that helped to destroy the BLF, resulting in its 1986 deregistration.

They led to the BLF’s bent leader Gallagher being charged under the Crimes Act in Victoria, found guilty by a jury of eight men and four women, and sentenced to 18 months’ jail. And they exposed many of his cronies in the union and building industry.

“Back then, when Norm built his place, it would have nearly been the first two-storey one here. It was fancy for the time,’’ Maree Woodall, who grew up nearby and lives close to the two Gallagher houses, tells The Australian.

Her husband, Allan, adds: “I saw a new roof going on Norm’s old place the other day. It’s not a bad house. And old Norm, he was loved here.”

Another neighbour, George Mraz, says Gallagher would say to him, “If there’s anything you ever want, just sing out.”

Mraz says: “He had his fingers in a lot of pies and he did a lot of things against the law, but I didn’t judge him. Anyway, is what he did any different to what they do now?”

At his trial in Victoria’s County Court, after Winneke’s scathing findings were condemned by the union movement but adopted by police and prosecutors, Gallagher faced 43 charges. These related to secret commissions allegedly corruptly received between 1974 and 1981, worth more than $130,000 in materials and labour for the construction of those two beach houses. His prosecutor, Jim Morrissey QC, told the jury it was not important whether the gifts actually led Gallagher to show favour to the giver — because if it was known the gift was corruptly offered, its acceptance was also corrupt.

The people who gave Gallagher the secret commissions went to great lengths to keep the gifts from appearing in their books, Morris­sey told the jury. Three years earlier, Peter O’Callaghan QC, counsel assisting Winneke’s royal commission, described how Gallagher had been “on the take” in a very big way with labour and materials. “If there was no intention to pay for them and corruption or secrecy exists, subsequent payment does not obliterate the offence,’’ said O’Callaghan.

Gallagher, who told the jury in his trial it was all a crooked conspiracy to get rid of him, expressed regret that he had not been “more careful”, adding: “If for one moment I believed by getting one scrap through these people they thought I would sacrifice my members I would not have touched it with a bargepole.”

Retired Victorian Supreme Court justice George Hampel QC, who represented developers including the Grollo family in the Winneke royal commission and subsequently, tells The Australian the legal issues surrounding the criminal offence of secret commissions were “not that hard (to define) — it depends on the value of the gift, and the relationship between the giver and taker, and if there’s a tendency to corrupt if you are giving or taking some benefit from the gift”.

Hampel says: “The gift is secret, and it’s intending to corrupt the head of the union who has influence over the workers to say to them (for example) ‘we won’t strike’. It has to be secret from the person who stands to be potentially disadvantaged — non-disclosure is a very big clue. The gift doesn’t have to be goods. A service can be the subject of a secret commission — the Gallagher secret commissions were also about supplying him labour (to construct the beach houses).”

Judges and juries sometimes take the view that the givers — who, in the Gallagher case, were Hampel’s clients, the Grollo family — should be treated less harshly because “as a builder they had no choice but to buy him off. And that was the way the case was run.”

The Australian asks Hampel, a professor of law at Monash University since 2000, about politicians and secret commissions, and he adds: “If everyone knows that someone was giving the politician a gift, and it was open and accounted for, it’s not a criminal offence. If (a politician) conceals, it immediately has a badge of secrecy, particularly if the giver says ‘and I didn’t tell anyone about it’.

 
Judge Bernard Murphy told the Trade Union Royal Commission about concerns within Slater and Gordon over the issue of corrupt payments (not fraud, corrupt payments refer to bribes/secret commissions) involving the AWU WRA Inc.
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Secret Commissions were certainly in Bob Smith's mind when he made enquiries as to the source of the deposits in the AWU Members Welfare Association account Wilson operated in Melbourne.
 
This is an extract from Ian Cambridge's presentation to Queensland AWU Delegates in January 1996.
 
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Gallagher's court appearances and conviction for receiving secret commissions 

Victoria's CRIMES ACT 1958 - SECT 176

Receipt or solicitation of secret commission by an agent an indictable offence

    (1)     Whosoever being an agent CORRUPTLY receives or solicits from any person for himself or for any other person any valuable consideration— 

        (a)     as an inducement or reward for or otherwise on account of doing or forbearing to do or having done or forborne to do any act in relation to his principal's affairs or business; or 

        (b)     the receipt or any expectation of which would in any way tend to influence him to show or to forbear to show favour or disfavour to any person in relation to his principal's affairs or business

From the appeal in Norm Gallagher's case.

In charging the jury as he did, the learned trial Judge followed the ruling concerning the meaning of corruptly in offences under para. (b) of s176(1) and s176(2) of the Crimes Act made by Brooking J in R v Dillon and Riach [1982] VicRp 43; [1982] VR 434. Brooking J's ruling arose in the course of the trial of two persons charged with corruptly giving and receiving, respectively, valuable considerations. Counsel for the alleged recipient took exception to the direction concerning what constitutes "corruptly receives" which his Honour indicated he proposed to give. The direction which his Honour contemplated was that the accused (the receiver) acted corruptly if, at the time he received the benefit, he believed the giver intended that it should influence him to show or refrain from showing favour or disfavour in relation to the principal's affairs or business. After reviewing authorities, Brooking J, at p. 436, expressed his reasons for his intended direction as follows: "In my view, an agent does act corruptly if he receives a benefit in the belief that the giver intends that it should influence him to show favour in relation to the principal's affairs. If he accepts the benefit which he believes is being given to him because the donor hopes for an act of favouritism in return, even though he does not intend to perform that act, he is, by the mere act of receiving the benefit with his belief as to the intention with which it is given, knowingly encouraging the donor in an act of bribery or attempted bribery, knowingly profiting from his position of agent by reason of his supposed ability and willingness, in return for some reward, to show favouritism in his principal's affairs and knowingly putting himself in a position of temptation as regards the impartial discharge of his duties in consequence of the acceptance of a benefit." 

Determination of this ground of appeal, therefore, depends upon our view of the correctness of Brooking J's ruling

It therefore clearly emerges from the decisions and opinions of the Court of Appeal, and from what was said by Cussen J in R v Scott [1907] VicLawRp 84; [1907] VLR 471 and Hood J in R v Stevenson [1907] VicLawRp 85; [1907] VLR 475, that it is the intention of the person either giving or receiving, as the case may be, at the time of the passing of the consideration which is relevant to whether the behaviour charged was corrupt within the meaning of the section. This emerges in the passage cited by Bray CJ in C v Johnson [1967] SASR 279, at p. 290, from the judgment of the Court of Appeal of Ontario in R v Gross [1946] OR 1: "The word 'corruptly' in the section sounds the key note to the conduct at which the section is aimed. The evil is the giving of a gift or consideration, not bona fide but mala fide, and designedly, wholly or partially, for the purpose of bringing about the effect forbidden by the section

Thus Brooking J's ruling is consistent with the weight of authority founded upon Cooper v Slade

Where could anyone at S&G have got the idea that what the WRA was involved in amounted to the receipt of corrupt money?

Julia (Sgt Schultz) Gillard knew nuzzink about nuzzink.

Wilson had briefed Murphy about the Welfare a/c.

Hang on! Wasn't there a deposit into that account from a Theiss cheque made out to the WRA?

You would expect Wilson to have told Murphy about the deposits into the Welfare a/c so that he could advise him properly.

Could he have told Murphy what was really going on between him and Theiss?

We know Murphy at least opened a file in relation to the advice he gave Wilson because Gordon referred to it in his press release about what caused the departure of Gillard and Murphy from S&G.

Do you think some other partners may have had a little peek at what Wilson told Murphy?

Possibly, seeing as how they were probably shitting their pants at their potential liabilities to third parties.

Ah , the mystery remains; why on earth would Murphy talk about “corrupt payments”.

Where did he get that idea from?

ENDS

And this considered opinion from a clearly well informed Julia Gillard who had seen enough and "thought" about it enough to "think" she knew about the character of the money.

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