Deputy Opposition Leader Julie Bishop questions Julia Gillard. Picture: Ray Strange Source: The Australian
The claim raises new questions about what was known of Mr Wilson's activities inside Slater & Gordon, which yesterday hit back at criticism it should have told police or its client, the Australian Workers Union, about the fund.
And it comes one day after Julia Gillard's repeated assertions of being unaware at that time of any wrongdoing with the AWU Workplace Reform Association, which as a lawyer at Slater & Gordon she provided legal advice to help Mr Wilson set up.
The Prime Minister said on Monday: "You can't report things you don't know."
The claim in parliament that Mr Wilson, then Ms Gillard's boyfriend and client, effectively confessed to misappropriating funds came after new information in a statement issued yesterday by Slater & Gordon.
The statement raises questions about the firm's level of knowledge of a major union fraud that was perpetrated by Mr Wilson and his bagman, Ralph Blewitt, who last week provided detailed statements to police.
The firm's statement follows repeated questioning by The Australian about why Slater & Gordon did "not notify either the police or its then client the AWU of information concerning the AWU Workplace Reform Association when it learnt of allegations of misconduct by its other client, Mr Wilson, in August 1995?"
The union was never told by its lawyers about the AWU Workplace Reform Association that carried the union's name.
As a result of the union's lack of knowledge, further fraud continued with the 1996 sale of the terrace house in the suburb of Fitzroy and the draining of slush fund accounts involving about $150,000 of union money.
The law firm's statement yesterday revealed for the first time that Slater & Gordon "obtained information that was confidential to (Mr Wilson)".
Slater & Gordon added this confidential information could not be disclosed "as it would have represented a conflict between his interests and the interests of the AWU".
As a result, the firm ceased acting for the union and Mr Wilson in August 1995.
The law firm refuses to comment on the nature of the "confidential information" obtained at the time, saying it was "not permitted to disclose the confidential information of the official to the union or anyone else".
The firm recently commissioned legal opinions from senior counsel as well as Arnold Bloch Leibler lawyers, which "have confirmed that Slater & Gordon acted appropriately by ceasing to act for all parties".
Within hours of the statement's release, Deputy Opposition Leader Julie Bishop seized on the discrepancy between Slater & Gordon's position and the explanations given by Ms Gillard.
Ms Bishop told federal parliament the statement meant that "when Mr Wilson disclosed the use of the slush fund to purchase the Fitzroy property, Slater & Gordon ceased acting for both parties (Mr Wilson and the AWU)".
"Does the Prime Minister still say that as a partner of Slater & Gordon she did nothing wrong?" Ms Bishop said.
Ms Gillard accused Ms Bishop of being on "a mission of sleaze and smear". She added: "I did nothing wrong. Nothing the Deputy Leader of the Opposition has said or done during the course of the day actually raises as a matter of fact any wrongdoing."
Ms Gillard has repeatedly and strenuously denied any wrongdoing. She admits providing legal advice to help set up the association, which she later described as a "slush fund" for the re-election of union officials, but says she had no knowledge of its operations.
Legal documents, property searches and bank records show that about $100,000 was siphoned from the association to buy the Fitzroy house in 1993 as a home for Mr Wilson to use in Melbourne. Ms Gillard, who attended the auction with Mr Wilson, provided a power of attorney so he could purchase the property for $230,000 in the name of Mr Blewitt.
In her second marathon news conference on the issue, on Monday, Ms Gillard was asked several times why she did not disclose the existence of the association to the AWU, the firm's client, in August-September 1995 when Mr Wilson was accused of fraud involving a different slush fund in Melbourne.
Ms Gillard said: "I did not have in front of me any evidence of criminality or wrongdoing, but there was a lot of rumour about what was happening in the Victorian branch of the AWU at that time. In those circumstances I came to a personal decision about ending my relationship with Mr Wilson and I did so."
The Australian asked Mr Wilson yesterday about the claim in parliament that he had disclosed to Slater & Gordon in 1995 that money from the slush fund had gone into the Fitzroy house and whether that was the conflict that led to the firm ceasing to act for him and the AWU. Mr Wilson declined to comment.
Slater & Gordon said it had "consistently maintained, and still maintains, that at all times it has acted in accordance with its legal and ethical obligations in relation to all aspects of the AWU matter".
The firm said its independent advice "has confirmed that Slater & Gordon was and is not permitted to divulge confidential and privileged information of one client to another client or any other party". "Further, in circumstances where a conflict arises between two existing clients, Slater & Gordon was obliged to, and did, cease acting for both."
Slater & Gordon legal firm 'was told of fund raid' | The Australian:
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