Monday, 29 August 2011

Gillard at Slater and Gordon; AWU; AWUgate

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TitleCity Link: tender
ActivityQuestions without Notice
Date12 October 1995

many unnamed bank spokesmen engage in political propaganda.

City Link: contractual arrangements

Mr BRUMBY (Leader of the Opposition) -- Will the Treasurer confirm that the major sticking point in the negotiations between the government and Transurban is that Transurban is insisting that it be given a guarantee that in order to increase toll revenue and force cars onto the tollways the government will, firstly, reduce the width of Footscray Road; secondly, close Alexandra Avenue; and, thirdly, allow parking on Toorak Road so that it is no longer a clearway? Will the Treasurer give an undertaking to the house that he will not agree to any of these measures?
Mr STOCKDALE (Treasurer) -- It is a pity for Hollywood that the fertile imagination of the Leader of the Opposition is not captured by somebody who makes movies, because his flights of fancy are beyond belief.
I do not propose to go into the detailed matters that are subject to negotiation.
Honourable members interjecting.
The SPEAKER -- Order! The Leader of the Opposition has posed his question and the house should listen in silence to the answer.
Mr STOCKDALE -- The fanciful suggestions the Leader of the Opposition has made are the first I have heard of that kind. They would be unacceptable to the government in the form in which he proposes them. So far as I am aware, nobody other than the Leader of the Opposition is contemplating them.

AWU union official

Mr PERRIN (Bulleen) -- Will the Minister for Industry and Employment inform the house what action the government is taking on allegations of corruption in the trade union movement?
The SPEAKER -- Order! The Chair has some difficulty with the question. Unless the answer can be related to government administration the question will be out of order.
Mr GUDE (Minister for Industry and Employment) -- This matter should be of serious concern to all Victorians. Serious allegations of fraud and impropriety have been brought to my attention.
It is alleged that the former secretary of the Australian Workers Union, Mr Bruce Wilson, who left the union's employ in August of this year, has apparently misappropriated union funds and used his position as secretary in the most improper manner.
I understand the AWU is still receiving bills for strange items ordered by Mr Wilson. All attempts thus far to find him have come to nothing. What did Mr Wilson do when he found out that his actions had been discovered? The first thing he did was to seek legal advice from the union's solicitors, none other than Slater and Gordon. From whom did he receive that advice? One Julia Gillard.
I am informed that Ms Gillard is no longer with Slater and Gordon due to commitments as an ALP Senate candidate. That may not be the only reason she is no longer working at Slater and Gordon.
Mr Bracks -- On a point of order, Mr Speaker, from the outset you asked the minister to relate his answer to government administration. The minister is not talking about government administration but is speculating. He is seeking to try in the Parliament a case which should be dealt with outside the Parliament.
Mr GUDE -- On the point of order, Mr Speaker, I should have thought that of all members opposite the one who has just risen in his place to make a point of order should have known better because, after all, he is supposed to be the spokesperson in the industrial relations area.
The Employee Relations Act clearly provides for investigation of alleged improper action against a union. I make the point to the honourable member that the AWU is a registered and recognised organisation under the Employee Relations Act.
The concerns that have been expressed have been expressed on behalf of decent working AWU members. I have not only a right but a responsibility as the responsible minister to deal with the matter, and I propose to do that irrespective of the point of order.
The SPEAKER -- Order! If the minister can relate his answer to the act he mentioned he will be in order, but if he strays from that he will be out of order and I will no longer hear him.
Mr GUDE -- Consistent with the provisions of the legislation I am informed that the first thing Ms Gillard did, when asked what she would be doing and why she was getting out of Slater and Gordon, was to pay back moneys to the AWU for work -- --
Mr Brumby -- On a point of order, Mr Speaker -- --

AWU: funds

Mr LEIGH (Mordialloc) -- I grieve about the Australian Workers Union and the allocation of some of its money. The union has a well-known history in the Labor Party. It has been involved in a lot of rorting of the funds of many union members. Today I am seeking a fraud squad investigation into what happened to $57 000 of the union's money.
To set the scene, I want to show the credibility of the witness from whom the information was supplied.
Honourable members interjecting.
Mr LEIGH -- The gentleman concerned -- and government members may laugh -- is a 20-year member of the Victorian branch of the Australian Labor Party, the joint president of the Australian Workers Union and a four-year member of the Victorian ALP administrative committee. He is well known to the Minister for Transport because he sat on the administrative committee during the Nunawading Province re-election inquiry that checked out what the honourable member for Thomastown -- now the Minister for Transport -- was doing when he was secretary of the ALP.
Mr Bob Kernohan has been hounded. Together with a whole range of things that have been done to him, through Telstra the union found his silent phone numbers and has made threatening phone calls to him. Today, the union is still up to its tricks and so are a number of members of the ALP. In a letter to me Mr Kernohan states:
When this is used ... may counteract by attacking me over the $6500 I received from Wilson ...
That is Bruce Wilson, who was then involved in the union. The letter continues that this person:
is well aware that the money I received came out of the Wilson election fund, this was confirmed by John Cain Jr, senior partner, Maurice Blackburn and Co.
On top of that --
this person --
is also aware that I went to the federal fraud squad and made a statement to this effect.
They found that I had no case to answer.
You must also remember that over half a million dollars went missing that --
the secretary of the union --
was aware of prior to him paying out Wilson and his mates (an additional $300 000).
I will make all of the material I have available to the house, including a copy of Mr Kernohan's statement to the federal police, following which no charges were laid against him.
This is a man who has spent a lot of years in the Victorian ALP. He has decided to come forward today

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because he is sick of what is going on in this open, honest and transparent government. Is it so honest?
Government members interjecting.
Mr LEIGH -- Who pays for you guys? The material I will make available includes several statutory declarations and I intend to read them.
Mr Maxfield -- Can you read?
Mr LEIGH -- I refer to the first statutory declaration which was signed yesterday, although I also have another one signed some time ago by Mr Kernohan. The statutory declaration states:
I had a discussion with ...
the then secretary of the Australian Workers Union (AWU) in mid-1995 and, during the discussions --
the secretary --
alerted me to the fact that a building contractor had been to see him seeking final payment for renovation works undertaken and completed at an address that was authorised by the AWU. AWU officials Bill Shorten and Terry Muscat were also aware of this serious matter.
The secretary:
told me that a considerable amount of ... union funds had already been spent on renovations at this property and that his investigations had disclosed that the property in question belonged to --
an individual. I have not named the individual as yet, but I will in a minute. The statutory declaration continues:
... he told me that $40 000 had been spent by the AWU to date.
The secretary:
told me that --
the person concerned --
was a ... close friend of Bruce Wilson. Wilson was also an AWU secretary.
The person:
was not known to me but --
the secretary --
and Bill Shorten knew her, in fact Bill Shorten said that he knew her well.
I asked --
the secretary --
what was he and the union going to do to recover our members union funds.
The secretary:
told me that he would not rest 'until these --
I cannot use the expletive that is in the document --
crooks are in jail and that the money is returned in full to the union'. To this day, despite court action taken against Mr Wilson and a court order authorising the AWU to recover these moneys nothing has been done.
The secretary:
and myself had a significant fallout over this and other serious fraudulent activities within the union because they wanted to 'cover it up'.
The secretary:
told me that Wilson also spent $17 000 on women's clothing for --
this person --
out of union funds. The ladies clothing store is called the Town Mode of Melbourne Fashion House.
I do not believe the store exists any more. So $17 000 of the union's funds were spent by the Victorian branch of the AWU to make this person well dressed. This person ultimately became what one would describe as the best-dressed chief of staff in the country for a Leader of the Opposition, because this person was a former Leader of the Opposition's chief of staff and received the clothes and the renovations.
Mr Hulls -- I was the chief of staff.
A Government Member -- Do you wear dresses?
Were you wearing a dress at that time?
Mr LEIGH -- I am well aware of some of the strange habits of the now Attorney-General but I think dressing up in women's clothes is not one of them -- that I know of!
I am talking about a former Leader of the Opposition's chief of staff -- not the current or former chief of staff, the honourable member for Niddrie -- Ms Julia Gillard, who was the chief of staff to the now Victorian Treasurer. While Ms Gillard was swanning around the country, presumably with the Leader of the Opposition, to promote the Labor Party, union funds were being used to renovate her property and $17 000 of the $57 000 bought her the best clothes -- --
Mr Hulls -- On a point of order, Mr Acting Speaker, the honourable member is casting aspersions on a member of another Parliament. His remarks are

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grossly inaccurate, outlandish, outrageous and indeed highly defamatory. The grievance debate is not a time for members of Parliament to get on their high horse and grossly defame federal members of Parliament for their own purpose, whatever that may be. I ask that you bring the honourable member back to the forms of the house and conduct the grievance debate in a proper manner without allowing the honourable member to cast outrageous defamatory aspersions on a federal member of Parliament.
Mr McArthur -- On the point of order, Mr Acting Speaker, I request that if there are points of order in this vein that you ask the Clerks to stop the clock. I also refer you to Speakers' rulings on this issue. I refer especially to Speaker Wheeler's ruling in 1973 when he said:
In the best traditions of this place, members should refrain from making imputations concerning the official actions of members of other parliaments ...
Mr Acting Speaker, I draw your attention to two things in relation to the ruling. Firstly it says 'in the best traditions of this place'; it is not an absolute prohibition from drawing into question the actions of members of other parliaments. Secondly, the ruling draws a very clear line. It says, 'should refrain from making imputations concerning the official actions of members of other parliaments'.
The honourable member for Mordialloc is bringing into question the actions of a person while not a member of another Parliament, but he is certainly not questioning this person's official actions in any way. The honourable member's issue relates to the possibly fraudulent use of members' funds from a union and where those funds were eventually expended. It does not relate to the official actions of a member of another Parliament. On those grounds you should rule the point of order out of order.
Mr Cooper -- Are you going to stop the clock?
Mr Brumby -- On the point of order, Mr Acting Speaker, the rules of debate in this place, as in other parliaments, are very clear. If a member of Parliament wants to make substantive allegations against another member of Parliament -- --
Mr Leigh interjected.
Mr Brumby -- You have mentioned the person's name now in this debate. If you want to make those sorts of allegations, as repeated in the house by the honourable member for Monbulk, it must be done by way of substantive motion.
To come in here as the honourable member does -- a member who has a reputation for never getting out of the gutter, for always being in the gutter -- --
Honourable members interjecting.
Mr Brumby -- Accusations of that type should be made by way of substantive motion. I stated through you, Mr Acting Speaker, that I assume the honourable member is prepared to make those allegations outside the house, and the gutless little coward opposite says, 'I don't have the guts to do it'!
This is a member of Parliament who cannot help himself to get out of the gutter. I suggest that if he wants to make these allegations he should get to his feet, walk out of this house, stand on the front steps and repeat them. We will then see whether he has the guts and the backbone to back up the filth that he has peddled today in Parliament.
Mr Cooper -- On the point of order, Mr Acting Speaker, there are some rules that govern matters that come before this house, and in particular rules that govern points of order. Neither the Attorney-General nor the Treasurer has followed those rules: they have simply made wild allegations. The Treasurer has tried to debate the issue and extend the debate into an attack upon the honourable member for Mordialloc. The realities are that the house runs by standing orders and precedents set by previous Speakers and by the present Speaker.
The honourable member for Monbulk stated that the precedent states that there is no point of order. The only standing order that is relevant to this matter is standing order 108. I notice that the Attorney-General very carefully avoided quoting that standing order because it refers to members of the house and states that:
all imputations of improper motives and all personal reflections on members shall be deemed disorderly.
The honourable member for Mordialloc did not breach standing order 108 in his remarks about Ms Gillard and her misuse of union funds. There is no point of order. Further, the clock should have been stopped to allow the honourable member to finish his contribution.
The ACTING SPEAKER (Mr Kilgour) -- Order! I do not uphold the point of order.
Mr LEIGH -- If the Labor government is true to its word under its leader, Mr Bracks, that it is an open and honest transparent government, I seek from the Minister for Police and Emergency Services an admission that the government has a rogue union inside

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its organisation, affiliated to its body, providing hundreds of thousands of dollars. I have a record of the former president of that organisation saying that hundreds of thousands of dollars of union money has been rorted. What we have uncovered is a small proportion of that money.
The now secretary of the union, Mr Bill Shorten, knew about it, and the former secretary and now the upper house member in this Parliament, Mr Bob Smith, knew about it. They all know about it. Ms Julia Gillard knew about it and she took the 57 000 bucks to avenge herself.
Mr Maxfield interjected.
The ACTING SPEAKER (Mr Kilgour) -- Order! The honourable member for Narracan should not shout like that from the back seat.
Mr Lenders -- On a point of order, Mr Acting Speaker, I draw your attention to standing order 108, on which the honourable member for Mornington so helpfully addressed us before. The honourable member for Mordialloc has in this case directly and unequivocally impugned the motives of the honourable member for Chelsea Province in another place. It is unambiguous in terms of standing order 108, which reads:
No member shall use offensive or unbecoming words in reference to any member of the house ...
The ACTING SPEAKER (Mr Kilgour) -- Order! I have heard enough. I do not uphold the point of order.
Mr LEIGH -- In closing, I seek a police investigation into the misuse of those funds, and I urge the Minister for Police and Emergency Services to take some steps to demonstrate that the Victorian ALP government is as honest as its leader, Mr Bracks, says it is. I do not believe he will do that.
Last Updated on Wednesday, 12 May 2010 

AWU: funds

Mr McINTOSH (Kew) -- I am glad to be able to follow the honourable member for Tullamarine in the grievance debate. She talked about workers, but a lot of the issues I propose to raise deal with the way workers have been mistreated by at least one large public institution that operates throughout this country. All honourable members have been concerned about the collapse of HIH Insurance and the appropriate regulatory and prudential controls that should be established to ensure that people do not lose their money through mismanagement and misappropriation, if not criminal behaviour.
Mr Acting Speaker, I have asked the honourable member for Glen Waverley to pass to you a draft report by Coopers and Lybrand and a bundle of various documents. I am happy to table those documents for the benefit of the house.
The honourable member for Monbulk has some copies for any honourable member who wishes to follow my comments.
The institution I wish to deal with is the Australian Workers Union. The Australian Workers Union is now a super-union that resulted from the amalgamation of the AWU and the Federation of Industrial Manufacturing and Engineering Employees on 1 November 1993.
I refer you to the draft report by Coopers and Lybrand, which is addressed to the Australian Workers Union and raises major matters for the attention of the union's committee of management. As I understand it, it is a draft report that was prepared for the head office of the AWU.
The covering letter dated April 1998 deals with matters that arose in the financial years ended 30 June 1995, 1996 and 1997.
I say from the outset that I make no allegation against any individual member or official of that union. I am concerned that the processes adopted by the union raise substantial questions that should be dealt with by way of a public inquiry, if not a police investigation. Most importantly, the dispassionate draft report by the auditors indicates that the union has substantial difficulties.
I refer you, Mr Acting Speaker, to the first page of the draft report, which is the first page of the April letter, and in particular to the second paragraph, which reads:
The issues detailed in this report are considered to be the major issues which significantly impact the control environment and financial integrity of not only the head office branch --
that is, the head office of the AWU --
but also the union as a whole. The seriousness and magnitude of the issues we have identified have resulted in an extreme limitation in the scope of our audit, and as a consequence we propose to issue a disclaimer of opinion on the financial statements for each of the financial years presented.

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I refer you to what may be the most important words, at the end of the third paragraph:
It must also be noted that should this less than adequate financial environment persist, we would be required under our professional auditing and ethical standards to tender our resignation as auditors of the union.
I refer you to some of the substantial allegations made by the auditors. On page 16 of that draft report, the following observation is made:
During our audit we identified a significant number of transactions for which no supporting documentation was available.
They state that that impacts on their ability to determine income and expenditure and to correctly detail the accounts of the union.
On the last page, page 17, the auditors make the following observation:
With regard to contributions paid by branches and payments on behalf of branches, we noted that:
in the general ledger there are no separate accounts to record contributions/payments for other branches separately ...
It goes on to say that there is a substantial discrepancy between what the state branches and the head office say the income and expenditure should be.
The second bundle of documents relates to a number of exhibits to an affidavit sworn on 19 September 1996 by Mr Ian Cambridge, who was then the national secretary of the AWU. As I understand it, he is now a member of the New South Wales industrial relations court.
The source of the information I propose to put before the house is the affidavit filed in proceedings in the federal industrial relations court.
I refer honourable members to the last three pages of that bundle of documents, numbered 15, 16 and 17. Those pages contain a list of some 30 bank accounts in Western Australia, New South Wales, Queensland, Tasmania and the Northern Territory. Page 16 contains a list of substantive accounts in Western Australia and Victoria detailing not only account names and numbers but also huge deposits -- $156 000 in one case and $383 000 in another.
Mr Cambridge says in his affidavit that he wrote to every bank in Australia and that the replies he received were from the Commonwealth Bank alone. The list of the individual bank accounts relate to the Commonwealth Bank and not to any other. He says in his affidavit that the AWU does not operate these accounts. They are not union accounts but somebody else's.
But they are using the name 'AWU' or 'Federation of Industrial Manufacturing Engineering Employees' or some variation on a theme in all those cases.
By way of example, on page 16 of the documents the first two accounts are shown as the 'AWU Workplace Reform Association Inc. (Cash Management Call Account)', which I will name the call account. The second account is named the 'AWU Workplace Reform Association Inc. (Cheque Account)', which I will refer to as the cheque account. As the front of the documents shows, in about April 1992 a corporation called the Australian Workers Union -- Workplace Reform Association was incorporated in Western Australia. The top document is an application for its incorporation. The second document is the certificate of incorporation.
The association opened the two accounts in Western Australia referred to above, the call account and the cheque account. One must remember that these are not union accounts but accounts operated by a person or persons unknown.
Mr Cambridge names a Mr Blewitt and a Mr Wilson as the signatories and the operators of the accounts, and it appears from his evidence that they were not doing it for the purpose of depositing moneys for the union.
Most importantly, during the course of the operation of those accounts a number of deposits were made by, among others, corporations such as Thiess Contractors in Western Australia. Page 3 is a deposit slip for the cheque account for the sum of $16 000. The second deposit slip on page 4 shows a deposit of some $31 000. Mr Cambridge has deposed that this is the only deposit slips he has, but he understands that the vast majority of the deposits were made by Thiess Contractors. I make no allegation against Thiess Contractors, in fact quite the opposite.
It appears that Thiess Contractors operations were above board.
It had an arrangement with the AWU to employ people for the purposes of training them on their sites in Western Australia under the then Labor government's workplace reform legislation. According to Mr Cambridge's affidavit, the Western Australian government also made substantial contributions to the union in that regard. This was dealing with taxpayers moneys! Those moneys were built up over time. Page 5 is lifted straight out of Mr Cambridge's affidavit. I am happy to table a copy of the affidavit or make it available to anyone who wishes to peruse it.
The table on page 5 gives details of expenditure and shows an unbelievable amount of cash money -- $50 000 -- together with further amounts of $8000 all

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the way down the table. Payments were made to unknown people. Items 3 and 4 on page 5 show that on about 10 February a cheque was drawn for $25 000 and made payable to a Mr Blewitt. As I indicated earlier Mr Blewitt was a union official, and his involvement raises questions that need to be answered.
On 13 February Mr Blewitt purchased a property in Victoria for $230 000, paying a deposit of $23 000. This happened three days after he was given a cash cheque for $25 000. He nominated a firm called Slater and Gordon to handle the transaction. I emphasise that I make no allegation against Slater and Gordon. It is important to note that that firm was the union's solicitors in Victoria, so no doubt Mr Blewitt went to his internal solicitors. But on or about 18 March, at the request of Slater and Gordon, some $67 000 was paid to complete the settlement of the property, and a further $2000 was paid out of that account. It is not the union's account, but it certainly appears to be union money.
Mr Cambridge has given evidence to say that the property has subsequently been sold and not 1 cent has been used from the sale proceeds to reimburse the union. It has disappeared into the ether, despite the fact that there is a civil order out against Mr Wilson and Mr Blewitt in that regard.
On page 16 of the documents the first account under the heading 'Victoria' is named 'Australian Workers Union Members Welfare Association (No. 1) Account'. Again Mr Cambridge knows nothing about that account. It is not a union account, although money has been paid into it.
Page 14 indicates that over a long period corporations such as Thiess Contractors, John Holland, Phillips Fox on behalf of Woodside, Chambers Consulting and Fluor Daniel paid moneys into the account. This is not an account operated by the union. Curiously, on page 15 there are all sorts of extraordinary items.
Items 13 and 14, totalling $17 500, were paid to Town Mode, which is a women's fashion house in Melbourne. Mr Cambridge has given evidence about the likely proceeds of this. The companies were doing no more than they were obliged to do, which is to remit union fees on a regular basis to the AWU. They were the fees of ordinary members. These moneys were put into an account not operated by the union, so ordinary members were paying for items from a women's fashion house. There may be a perfectly innocent explanation but I cannot see it.
Curiously, on my accounting some $185 000 in bank cheques has also been drawn and paid back to individual corporations, presumably because by that time August had expired. At page 16, a letter dated 4 August indicates real concerns on the part of the Victorian finance committee. It states that people are to be charged under various union rules and that those matters will be referred to the industrial relations tribunal and the police. So far as I am aware, those investigations have not been completed.
At page 17, Mr Cambridge indicates he wants the accounts frozen, and they are frozen. Then, for some reason, at the behest of Maurice Blackburn Solicitors, who were then acting on behalf of the Australian Workers Union, moneys were paid out to various accounts. A handwritten note indicates that notwithstanding that the accounts contained union moneys, according to a number of documents signed by union officials they were not appropriately dispersed.
The ACTING SPEAKER (Mr Plowman) -- Order! The honourable members time has expired.
Last Updated on Wednesday, 12 May 2010 
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