EXCLUSIVE
THE Australian Workers Union is again under pressure after the emergence of a current slush fund used to bankroll ALP factional dogfights including elections within the disgraced Health Services Union.
AWU Victorian secretary Cesar Melhem reluctantly went public yesterday to confirm that a non-profit company he runs, Industry 2020, had raised about $500,000 since 2008 to support the political activities of his Right faction sub-group within the ALP.
Notable among those activities was a ''significant'' outlay of funds on the bitter HSU election in 2009. As workplace relations minister in August 2008, Prime Minister Julia Gillard was a guest speaker at the inaugural fund-raising lunch for the Industry 2020 fund at Flemington racecourse, which generated about $250,000 with nearly half that profit.
Fairfax does not suggest Ms Gillard knew how the money raised at the event would be spent. The news comes as Ms Gillard has been embroiled in controversy over her legal work relating to a different AWU-linked slush fund in the mid-1990s. Mr Melhem's use of funds from unions and companies on elections in other unions raises questions about democracy across the labour movement.
It comes at a difficult time for Australia's labour movement as it faces escalating demands for greater transparency from both conservative opponents and from within its own ranks.
The 2008 lunch, booked in the name of the AWU, was attended by about 600 employers, union officials and MPs, including current workplace relations minister, Bill Shorten.
Mr Melhem initially refused to discuss Industry 2020 with Fairfax but later called back to confirm that money generated at the $400-a-head lunch was used, in part, to support candidates in elections within ''friendly'' unions, notable among them the HSU poll in 2009.
Mr Melhem said some money raised at the Flemington lunch was spent on the unsuccessful bid for secretary of the Victorian HSU No. 1 branch by a right-wing factional colleague,
Diana Asmar. Ms Asmar is running for the Victorian secretary position in the current HSUA election. Mr Melhem said that ''at this stage'' he would not use Industry 2020 to support her in the current poll. ''I don't think I'll do it again,'' he said.
However, labour movement figures close to the current HSU election said Industry 2020 was already being used to support Ms Asmar.
Two other fund-raisers have been held for Industry 2020, including a small event at Melbourne's Greek Museum in Melbourne last year attended by Mr Shorten.
Asked if the contributors to such events knew how the funds were to be spent - for example, on other unions' elections - Mr Melhem said he thought probably not. ''Maybe I should disclose that next time.''
He said he did not believe Mr Howes, Ms Gillard or Mr Shorten were aware of how the funds raised by Industry 2020 would be spent. Mr Melhem said he had formally registered the fund with the ASIC. ''People are not committing a crime here.''
Yesterday Ms Gillard's office stressed that her 2008 address was published at the time and remained on a government website.
''Questions about the organisation of the function, including the raising and disbursement of any funds, should be directed to the function organisers,'' it said.
Mr Shorten issued a short statement: ''The Minister believes that any fundraising and campaigning for parliamentary, union or other democratic elections should be conducted transparently and in accordance with the law and any applicable rules of the relevant organisation.''
Among the guests at the Flemington event were companies with which the AWU deals including builder John Holland and train builder, Bombardier. Both companies refused to comment when asked if they knew how the funds were spent.
AWU national secretary Paul Howes defended speaking at a recent fund-raiser at Zinc at Federation Square for Industry 2020. He said he believed the fundraiser was for Mr Melhem's re-election. ''The reality in contested election campaigns, incumbent officials have to raise funds to seek re-election.''
Mr Howes has been a vocal critic of the corruption at the HSU and earlier this year said union officials had nothing to fear ''from more transparency, from being more open and ensuring we act diligently."
Asked about the transparency of Mr Melhem's fund he directed questions to the Victorian secretary.
New AWU slush fund revealed:
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