- The Australian
- December 01, 2012
Mr Costa told The Weekend Australian yesterday he was in "total agreement" about the need for a high-level inquiry run by a serving or retired judge to investigate the management of unions, following a series of scandals.
"I believe that Julia Gillard should look at an inquiry into a range of allegations across the union movement," Mr Costa said.
"There is a need to clear the air for trade union members over union administration generally, particularly after what we have seen in the HSU (Health Services Union).
"In fact I would go further and ask why union executives and management committees are not held to account in the same way as company executives. Unions collect money and ought to be regulated to the same extent."
In 1996, Mr Costa was said to have been "horrified" and determined to shut down the efforts of the then national leader of the Australian Workers Union, Ian Cambridge, who was seeking a royal commission into the union's fraud scandal.
Details of Mr Cambridge's August 1996 diary entry, documenting strong resistance to a public inquiry into the AWU's corruption, emerged as Tony Abbott pledged to set up a royal commission to investigate matters including the Prime Minister's role in the same scandal.
The Weekend Australian has obtained the comprehensive diary of Mr Cambridge, a former joint national secretary of the AWU and now a commissioner for Fair Work Australia.
Mr Cambridge wanted a royal commission in 1996 after his discovery of significant corruption involving Bruce Wilson, who was Ms Gillard's boyfriend and client when she was a salaried partner at the law firm Slater & Gordon.
His diary for August 1996 describes a meeting at the Labor Council building in Sydney, which included Mr Costa, then assistant secretary of the Labor Council; and his colleagues John Robertson (now NSW Opposition Leader); Mark Busby; and AWU NSW secretary Russ Collison.
The meeting occurred amid investigations by West Australian police, who were urged by Mr Cambridge and AWU national president Bill Ludwig to bring criminal charges for fraud over a slush fund, called the AWU Workplace Reform Association.
Neither Mr Ludwig nor Mr Cambridge knew then that the AWU's solicitor at Slater & Gordon, Ms Gillard, had given legal advice to her boyfriend in 1992 that helped lead to the incorporation of the association.
Ms Gillard has repeatedly and strenuously denied wrongdoing and said she had no knowledge of the operations of the association.
"Fairly quickly, the discussion at the meeting moved to the question of the internal conflict within the AWU," the Cambridge diary entry states. "(Michael) Costa mentioned a number of matters.
"Costa specifically indicated he thought that the current 'war' in the AWU was causing serious damage to the Right faction and that there needed to be some sort of solution established fairly quickly ... to limit the damage.
"In particular, Costa said that he was horrified at the public call that I had made for a royal commission and that he was further alarmed by the subsequent calls that (union leader Steve Harrison) had recently made in respect of a (National Crime Authority) investigation.
"Costa said he thought that these sorts of things were the last thing that the faction and the movement needed and that the idea of having pecuniary interest exposures and things of that nature was just crazy.
"He then went on to say that there would be no royal commission into these things and at this point I suggested to him that I could possibly guess as to why he was so confident. Costa then openly replied that he was aware that the (federal workplace relations) minister, Peter Reith, had been spoken to about these issues and that therefore there would be no further inquiry into these matters."
Mr Costa said yesterday his view then was that police were best positioned to get to the bottom of the fraud allegations.
"I would have strongly supported a full police investigation," he said. "But a royal commission is something extraordinary, it wouldn't have been justified at that time."
Mr Reith said if he had known then of the corruption, he would have set up an inquiry.
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