The Australian - Slater and Gordon knew extent of Wilson's Workplace Reform Association crimes in AUG 95
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Notes of panicky, closed-door debriefings of Julia Gillard’s then lover and law firm client, disgraced union boss Bruce Wilson, set out his confessions 22 years ago to perpetrating a major fraud with a “slush fund” that she had set up for him.
The handwritten notes, leaked to The Weekend Australian and revealed publicly for the first time, show that Mr Wilson admitted his crimes to Bernard Murphy, now a Federal Court judge, in a tense meeting at Slater & Gordon in August 1995.
Publicly, in the years since and under oath at the trade union royal commission in 2014, Mr Wilson has repeatedly denied criminal wrongdoing.
He has avoided prosecution despite the commission’s recommending he be charged over one of the Australian Workers Union’s biggest frauds.
The slush fund scandal ended Mr Wilson’s prime ministerial ambitions in 1995, divided the AWU and caused a serious split at the law firm, resulting in Ms Gillard leaving as a salaried partner for a new career that took her into politics.
The notes show Mr Wilson told Ms Gillard’s manager and mentor at the law firm, Mr (later Justice) Murphy, that if the slush fund were “ever investigated”, he (Wilson) would “go to jail” with others over the misappropriation of more than $400,000.
Some of the conduct of the then AWU state secretary, once touted by union heavyweight Bill Ludwig as a future Labor leader, was written up by Mr Murphy at a tumultuous time in August and September 1995.
The large amounts of money Mr Wilson’s slush fund had received were described as illegal “secret commissions”.
One note describes Mr Wilson admitting that $7000 from an AWU-branded account had been spent on “renovations”, but the property was not disclosed. Ms Gillard’s house had significant renovations that were funded by what her builder, Athol James, told the royal commission in 2014 were “wads of cash” that he saw being provided by Mr Wilson.
The damning Murphy notes were not produced or used against Mr Wilson and others at the royal commission because of legal professional privilege, which prohibits courts receiving confidential communications between a client and a lawyer.
Justice Murphy, whose 2011 appointment to the Federal Court was strongly backed by Ms Gillard as the then prime minister, also cited legal professional privilege when he declined to answer some questions at the commission about Mr Wilson’s role in the slush fund scandal.
The emergence now of the notes will raise questions about why Mr Wilson, who was found by the commission to be the ring-leader and architect of a large fraud, has not been prosecuted.
The notes were locked up at the law firm after the abrupt departure of Ms Gillard over the slush fund scandal in 1995 and Mr Murphy quit at about the same time and went to Maurice Blackburn over a separate controversy.
The notes and other material were taken in 2013 when Victoria Police fraud squad detectives executed a search warrant.
The documents have been obtained by The Weekend Australian as authorities in Western Australia prepare to prosecute Mr Wilson’s former AWU sidekick, Ralph Blewitt, who has admitted his role as a bagman in a scam he said was run by his then boss and good friend Mr Wilson.
In one of his notes, Mr Murphy says Mr Wilson “told me for first time of the (AWU) Workplace Reform Association account in WA”. The AWU Workplace Reform Association Inc is the entity set up by Ms Gillard for Mr Wilson and Mr Blewitt.
In a tape-recorded exit interview in 1995 shortly before she left the firm, Ms Gillard described the entity as a “slush fund” for union officials to fight elections. This purpose was not described in its objects, and the rest of the AWU did not know of its existence.
Some at Slater & Gordon, including equity partner Nick Styant-Browne, were furious the firm had been caught up in fraud with a slush fund they did not know Ms Gillard, who did not open a file, had set up for her client and boyfriend.
Ms Gillard has repeatedly denied knowing the fund was to be used in a fraud. The royal commission found that she had been a sloppy lawyer but had not committed offences, and was not aware of Mr Wilson’s conduct.
Royal commission head Dyson Heydon QC rejected Ms Gillard’s denials that she was the beneficiary of cash sums from Mr Wilson for house renovations. The commission found that the builder, Mr James, who recalled the “wads of cash”, and a union staffer, Wayne Hem, who said he had deposited $5000 at Mr Wilson’s request into her account, were telling the truth.
Mr Murphy wrote in his August 1995 notes that Mr Wilson disclosed that “the monies from the account had been misspent on a (number) of things he did not want to tell us about”.
Mr Wilson confessed that hundreds of thousands of dollars were received from companies and funnelled through the slush fund accounts while being kept secret from all other officials of the AWU — which was also a client of Slater & Gordon.
The $7000 renovation cost referenced in one of Mr Murphy’s notes matches the sum Mr Blewitt told the commission he had handed over at Ms Gillard’s house.
The notes set out summaries of tense talks with Mr Wilson, culminating in his being sacked as a client and Ms Gillard leaving her job because of the grave concerns of some at the firm.
Justice Murphy told the commission that at the time and among some equity partners of the firm, “the concern that was conveyed was that Julia Gillard had created an association which might have been set up corruptly and might have involved corrupt monies and it involved the firm in a conveyance involving those monies”.
He said he always believed she had done nothing wrong.
The notes state that after Mr Wilson had confessed his role in the fraud, Mr Murphy agreed with a barrister, Robert Hinkley, “that I (would) contact John Cain from (Maurice Blackburn) on behalf of Wilson to negotiate a redundancy package + resignation for Wilson in the hope that if he left (the AWU) there (would) be no further investigation”.
Mr Wilson ultimately succeeded in getting a redundancy package.
John Cain Jr is Victoria’s Solicitor for Public Prosecutions but in 1995 he was acting for union officials opposed to Mr Wilson and unaware of the extent of his fraud.
Mr Murphy says in a note: “Very concerned. Told him (Wilson) that glad he had made his decision to resign already (because) this issue (would) affect my (the word is unintelligible).”
Mr Murphy told Mr Wilson that despite the criminality and the firm also acting for the AWU, the firm would not tell anyone of his admissions of fraud.
A handwritten note shows Mr Murphy wrote at 1.10pm on August 14, 1995: “Advised unable to act on his behalf (because) not prepared to be party to misleading union re (AWU Workplace Reform Association) monies.”
Describing Mr Wilson’s response, Mr Murphy wrote: “Very worried. Thought this meant we (would) tell. Advise him that (could) not tell anyone. Completely prohibited. Legal Prof. Priv. Different thing (though) to sit idly by or co-operate with it by acting for him.
“Furthermore, he had lied to us about (Workplace Reform Association). He had instructed us to set it up. He had then received monies into it improperly. Then he had spent the monies improperly. Lied to us and involved us in criminal wrongdoing, re the house. Partners very angry about that. (Could) not act for him. (Would) give him a letter that day which set this out. He concerned re letter being posted or even couriered. I said I (would) hand-deliver it.”
The August 14 letter to Mr Wilson, headed “possible criminal prosecution” and written by Mr Murphy as head of the firm’s industrial unit, says: “Your recent provision of information regarding the AWU Workplace Reform Association Bank Account and misappropriations from it has rendered it impossible for us to continue to act on your behalf.”
Mr Murphy wrote it would be unethical of the firm to continue, and the rules of professional privilege “are such that we cannot disclose the misappropriation without your consent”.
Despite the fraud, “we considered that negotiating a redundancy payment on your behalf … was proper”.
He also referred to “false instructions” from Mr Wilson and Mr Blewitt about a house at Kerr Street, Fitzroy, bought in Mr Blewitt’s name by Mr Wilson with slush fund money at an auction attended by Ms Gillard. The law firm handled the conveyancing.
The AWU’s then national secretary, Ian Cambridge, now a Fair Work commissioner, discovered the slush fund bank accounts in 1996 and learnt of the house after it had been sold in 1996, when it was too late to claw money back.
Internal documents show the firm wrote off money it was owed by Mr Wilson and elected not to bill him for its fees after his confession, as any money he paid would be “poss(ibly) tainted”.