Former ACTU secretary Bill Kelty has criticised as "inappropriate" the use of a secret Australian Workers Union fund in the 1990s. Picture: Bob Finlayson Source: The Australian
Mr Kelty backed cabinet minister and former AWU leader Bill Shorten in declaring the fund to be "out of bounds" but added that the attention on the affair was a distraction from more pressing issues including economic policy and border protection.
Caucus members said Ms Gillard should make a statement to parliament about her link to the fund, while Tasmanian independent Andrew Wilkie also said she should answer "outstanding questions" about her past.
Setting her strategy for a brutal week in federal parliament on Monday, Ms Gillard sought to tough out another round of Coalition attacks on the grounds that the entire matter boiled down to "absolutely nothing". But the opposition plans to continue its interrogation of Ms Gillard over her role as a salaried partner at Slater & Gordon in the 90s in giving advice to help set up an association for her then client and boyfriend, Bruce Wilson.
The association, which Ms Gillard later described as a "slush fund" for the re-election of union officials, was used by Mr Wilson and his bagman Ralph Blewitt to defraud the AWU of hundreds of thousands of dollars. Mr Blewitt yesterday gave Victorian police three written statements about his involvement in an affair on condition that none of the material could be used in court against him. Ms Gillard has repeatedly denied wrongdoing, saying she had no knowledge of the workings of the fund.
Deputy Opposition Leader Julie Bishop vowed last night to question Ms Gillard closely about her professional conduct as a lawyer, in a clear escalation of the Coalition strategy when parliament resumes on Monday.
In particular, the opposition has been pressing Ms Gillard on whether she should have informed Slater & Gordon's client, the AWU, about the existence of the slush fund when the firm became aware the union and police were investigating alleged fraud by Mr Wilson involving a separate Victorian fund.
Mr Shorten told the ABC's Lateline this week that the fund was "unauthorised", "inappropriate" and "out of bounds" but added that he was satisfied with Ms Gillard's explanations about the matter. Mr Kelty said he had a very high regard for Mr Shorten's views and that most people in the unions would have regarded those kind of funds as being inappropriate.
"If they're not authorised, then they're not known, they're secret and nobody knows what purpose they're for," he said. "All I can say is that unions in my experience were overwhelmingly frank and honest and raised their money in those ways." Mr Kelty, who led the labour movement at the time of the AWU affair in the 90s, said he had not examined the issue in detail and did not know of the fund's existence at the time.
It is alleged that Mr Wilson and Mr Blewitt used the fund - the AWU Workplace Reform Association - to collect money from companies, which said later they thought it was going to legitimate purposes. Some of the cash was allegedly used to pay for a Melbourne house that Mr Blewitt bought with a mortgage taken out through Slater & Gordon.
While Ms Gillard has denied being in charge of the conveyancing for the house, which Mr Wilson lived in, she faced questions yesterday over a Commonwealth Bank letter addressed to her at Slater & Gordon in March 1993 that suggested she knew about the mortgage insurance arrangements for the property.
Former Slater & Gordon partner Nick Styant-Browne told ABC's 7.30 there was "absolutely no doubt" that Ms Gillard not only knew of the Slater & Gordon mortgage in March 1993 but was involved in helping to set it up.
The Prime Minister said yesterday this only showed that she could not recall events when asked about them many years ago. "What this boils down to is that 17 years ago I couldn't recall events that happened 2 1/2 years earlier. That's what it boils down to," she told reporters in Melbourne. "And let's be very clear that the event I couldn't recall, the matter I couldn't recall, related to Slater & Gordon issuing a mortgage. Not a matter associated with any union fund or account."
Ms Bishop said last night that in her "20 years experience as a practising lawyer, my observation of her conduct is that it ... did not meet the standards expected of a partner in a law firm".
She said she would ask Ms Gillard the sorts of questions that the AWU should have asked in the 90s and which the union's former leader, Ian Cambridge, wanted answered at the time.
One senior government source said the Prime Minister's strategy was clearly not working, adding: "This is something that could affect the future of the government."
ADDITIONAL REPORTING: BEN PACKHAM
Bill Kelty joins critics of AWU fund as Julia Gillard fights back
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