Julie Bishop - Member for Curtin

Sky News, Viewpoint with Chris Kenny

 14 November 2012

Subjects: AWU slush fund
 
E&OE…
 
CHRIS KENNY          Let’s get into the nitty gritty of the AWU. I’ve been accused of being part of some Liberal conspiracy, the Australian newspapers been accused of running a smear campaign. Let’s talk about what’s actually behind this issue. What are the questions that need to be answered and what the Opposition is doing about it. Joining me from Perth is Deputy Opposition Leader Julie Bishop whose just left a meeting with Hillary Clinton. Thanks for joining us Julie    
 
JULIE BISHOP    Good to be with you Chris.
 
CHRIS KENNY          Now firstly let’s look at this AWU affair. You are now leading the charge for the Opposition. Now presumably there are two reasons for that, you’re not a misogynist and also you used to be a managing partner at a law firm so you understand how a law firm operates and the issues behind this.
 
But the Liberal Party did not start asking questions about this until recently, initially you just let some media stories go out and Julia Gillard deal with this. Why are you leading the charge now and why has the Liberal Party waited until about two weeks ago to start asking forensic questions on this issue?

JULIE BISHOP    Chris we were prepared to give Julia Gillard the benefit of the doubt. The matters did occur some time ago. We were deeply concerned about some of the answers she had given in interviews to journalists but it was not until the exit interview from Slater and Gordon, that is the firm that she was working for, the exit interview when she left the firm was published in the newspapers. And I read through that interview and I put myself in the position of a managing partner of a firm dealing with Julia Gillard at that time and I was deeply troubled by her answers. In fact I would have sacked her on the spot if she had given those explanations to me. So I took a deep interest in the matter because of the Prime Minister’s professional conduct at that time.
 
But then she made that statement to the press on the 23rd of August, a very detailed statement about this issue and it just didn’t stack up and I started forensically going through the documents. They are not produced by the Liberal Party, these are documents that have been produced by members of the AWU the very union that was a client of Slater and Gordon which was defrauded of hundreds of thousands of dollars by Julia Gillard’s then partner.
 
At that point when I knew that there were inconsistencies in her story I started asking questions about October the 11th and the Prime Minister’s answers, well non answers in Question Time led me to believe that she was hiding her involvement in this scandal.
 
CHRIS KENNY          Well let’s get down to tin tacks and what the overarching allegation is. You mention that there is no question that hundreds of thousands of dollars was fraudulently put through these slush funds but no one is saying that Julia Gillard knew about that. In fact no one is producing any evidence she knew about that she says she didn’t know about that, that was her former partner. Now a Liberal MP under the cloak of parliamentary privilege yelled out 'corrupt' at her last week. Now surely neither you or anyone else would be making that allegation outside of parliament?
 
JULIE BISHOP    I’m not making that allegation now. What I’m saying is that the Prime Minister has admitted that she was involved in setting up a slush fund. She told the commissioner for corporate affairs in Western Australia that the slush fund was actually for training and workplace safety but she admitted to her law partners that it was really a re-election fund for the personal benefit of AWU union officials, one of whom happened to be her partner at the time.
 
But subsequently her answers to questions about the level of her involvement have shown such inconsistencies and now to the point where she’s not being honest about her involvement, that it does raise questions. What did she know about this misappropriation of hundreds of thousands of dollars defrauding her client, the AWU?
 
And it goes not just to her professional standards at the time, it now goes to her honesty, her integrity and her ethics today as she seeks to and I’ll say this, as she seeks to mislead journalists about her true involvement in both the slush fund, a conveyancing of a house that was paid for in part by monies out of the slush fund, a defamation action which was set up and designed to hide the fact of the slush fund and why she didn’t report this to either her client the AWU or to appropriate authorities.
 
CHRIS KENNY          I want to go through it step by step because I think it’s important people understand what’s here because a lot of people are saying there’s nothing here and certainly people are a little bit limited as to what they can say.
 
Let’s start at the start. Is it appropriate, was it appropriate if you’re running a law firm could you, would you see it as standard practice for a partner to be doing work for their lover?
 
JULIE BISHOP    Well it does raise a conflict of interest and that would have to be disclosed to the partners of the firm. But it would also have to be disclosed to the client of the firm, the AWU, and Bruce Wilson her partner was an official at that time at the AWU so if you’re doing work for that client, for him, you should have informed your partners and the AWU.
 
CHRIS KENNY          Well let’s assume they did that. Let’s assume that Slater and Gordon knew about the relationship and the AWU did. Now she did some work about setting up this association that she called at the time a slush fund. She did not open a file at the firm for that. Now that doesn’t mean much to the rest of us who are not lawyers. What is the significance of not opening a file?
 
JULIE BISHOP    Chris I practised law for 20 years, I was a partner, in two firms, for 15 years, I was the managing partner of a major firm for four years. It is standard practice for every lawyer to open a file, every partner that I’ve ever come across in my legal profession opens a file for work they are doing for a client.
 
CHRIS KENNY          Why?
 
JULIE BISHOP   ... because it’s required for your professional indemnity insurance, it’s best practice for your professional indemnity insurance. It avoids conflicts so that you know which partners are doing what work - because somebody might open a file on the other side of a transaction for example. Take the conveyancing file that’s the subject of this matter. Julia Gillard did not open, sorry the incorporation file, Julia Gillard did not open a file on the incorporation of this association. If she had, the AWU would have been alerted to the fact that she was opening a file called AWU Workplace Reform Fund (Association). So you would be able to check for conflicts and to ensure that the firm knew what was going on and also so that you could bill for your time. Or if you were doing a freebee you could at least write it off.
 
CHRIS KENNY     But.....
 
JULIE BISHOP    Sorry Chris, you also have to have a file number so that you can allocate disbursements against it. So court fees or filing fees, registration fees have to be allocated to a file number. Its just standard basic practice.
 
CHRIS KENNY          But Julia Gillard says well, it wasn’t such a big deal, she just did it in hindsight and in hindsight perhaps she should have opened a file, there was nothing wrong with not doing it. From what you’re saying it seems by not opening a file it means that the rest of the firm of course wouldn’t  have known about this work. It would be what you would do if you wanted to keep a secret.
 
JULIE BISHOP    The only reason a lawyer would not open a file and not alert their partners to it by putting it into the system is because you’ve got something to hide.
 
CHRIS KENNY          The other question that, this one has been asked of Julia Gillard and I think her answer is kind of neither here nor there, that is the fact that what she calls, what she said in her interview at the time was a slush fund was actually registered as you pointed out as the AWU Reform Association.
 
Now, is it appropriate morally, legally and professionally to know that this association is being run as a slush fund but it’s described in these legal papers and registered as a reform association? There was nothing in its rules or the paperwork to suggest it was an election slush fund.
 
JULIE BISHOP    Julia Gillard had a duty as an officer of the court and as a member of the legal profession and as the lawyer doing work for her client to be honest and straightforward about the work she was doing. By registering a name, the AWU Workplace Reform Fund (Association) and saying that the purpose of the association was training and workplace safety when you knew that the real purpose was a slush fund to be used for the re-election of union officials so they would be getting a personal benefit, that is not only against the law, the incorporations law in Western Australia, but you’re misleading the corporate affairs commissioner.
 
And there is evidence that Julia Gillard even wrote to the commissioner of corporate affairs when he queried whether this fund was legitimate, she actually vouched for the legitimacy of the fund when she knew it wasn’t for training and workplace safety, it was actually a slush fund. Her own words, a slush fund.
 
CHRIS KENNY          That is obviously a key element, a serious element of this controversy that needs to be resolved. Then we go forward, we know that Julia Gillard went to a house auction with Bruce Wilson. He bought the house, she helped to some degree in the legal arrangements for the purchase of that house but we know some of the slush fund money went toward buying that house. Again Julia Gillard said she had no knowledge of this. She obviously had knowledge of the purchase. But she had no knowledge that the money for the purchase had come from the slush fund and that’s fair enough isn’t it? She’s not to know where the money was to come from?
 
JULIE BISHOP    It is inconceivable that she, as the lawyer doing work on the conveyancing file, did not know that a cheque had been drawn on the AWU slush fund account and paid into Slater and Gordon. The firm would have been alerted to the fact that the drawer of a cheque was the AWU Reform Fund and it was allocated to Ralph Blewitt’s conveyancing file. It’s inconceivable that she didn’t know.
 
But the other point is, in Parliament and elsewhere she’s indicated that she had nothing to do with the conveyancing file, she wasn’t in charge of it, she had nothing to do with it. She said she was only involved in the establishment of the slush fund and nothing thereafter. Well this conveyancing file was 12 months after the incorporation of the association, incorporation of the slush fund. And monies from the slush fund were used, about $100,000 was used to purchase a house that her boyfriend lived in, although it was put in the name of another union official.

And that brings us to the question of the power of attorney.
 
CHRIS KENNY          Alright, well just bring us up to date quickly with that power of attorney issue, because I want to move on quickly after that.
 
JULIE BISHOP    The conveyancing of the house is complicated because her boyfriend bought the house at a sale and then apparently a power of attorney document was created so that it was then in the name of Ralph Blewitt rather than Bruce Wilson.
 
Now according to Mr Blewitt, now this is a self incriminating statement, he says that the power of attorney document was backdated, not by him, and that it was not signed in Julia Gillard’s presence even though she witnessed it as the lawyer witnessing the signature. He maintains that it was neither on the same date as it was shown on the document and that in fact that she did not properly witness it.
 
Now that has all sorts of consequences for a lawyer, if you backdate and don’t properly witness a power of attorney. Particularly in this case because it was used to obtain $150,000 mortgage from her own law firm, from Slater and Gordon.
 
CHRIS KENNY          I want to now go to what I think is perhaps the key question, or one of the most important questions that we have not had a proper answer from the Prime Minister on and that is why eventually when she and her firm discovered there were untoward things going on, they believed that Bruce Wilson was up to no good and the AWU was worried about that and it caused all sorts of consternation at the firm and an internal investigation that led to the interview of Julia Gillard and of course it led to her leaving the firm. This is when she’s starting to see and also led to Julia Gillard breaking up her relationship with Bruce Wilson.
 
Now in a moment we’ll come to Mark Latham’s comments on this but firstly I want to got to what Julia Gillard said about it last week. Now remember this is the point, why, when she left the firm and broke up with Bruce Wilson because she was worried about what was going on, why did Julia Gillard not go to the police or to the AWU or both and tell them about this slush fund that she had helped set up?
 
Here’s what she said about it in Laos last week:
 
Julia Gillard: My role here was as a lawyer, I provided advice on the incorporation of an association, I was never connected with the operation of any fund, never connected with the operation of any fund. I was not an office bearer of the association, I was not involved in its activities, I was not involved in any bank accounts it may have held, I was not an official of the AWU, I was not in charge of the conveyancing file. So you are effectively asking me, why didn’t I report to authorities, things I did not know?
 
CHRIS KENNY          Now to me that’s a very important point, things she did not know. We don’t question that the Prime Minister Julia Gillard at the time didn’t know about all the activities Brice Wilson was up to. But she did know that the Western Australian AWU Reform Association existed, the slush fund as she called it. She knew that existed and so I want to show you now what Mark Latham says about why Julia Gillard didn’t alert the police or the AWU to the existence of that fund.
 
Mark Latham: Chris is the sort of person whose recommending that when you break up with a partner, you also dob them in to the police. Now I don’t know how you were brought up, and I don’t know your standards in life but that’s not how I was brought up and it’s not something that I think your average decent Australian would regard as an acceptable recommendation. Dobbing him into the police after you’ve broken up a relationship.
 
Journalist: I think we’re getting off the track a bit …
 
Mark Latham: In terms of human decency, he’s revealed what sort of person he is, and what this is all about. It’s the flint hearted Liberals, trying to get at Gillard where you couldn’t get at her over Thompson and the hung parliament and bring the Government down that way, bring the Government down that way, what they’re now saying about Gillard is break up with a partner and dob him into the police. Well it shows what sort of people they are.
 
CHRIS KENNY          Well Julie Bishop, let’s forget about the personal abuse there. But Mark Latham is saying that we could not expect Julia Gillard to have gone to the police or the AWU because this was a personal relationship. Is that good enough?
 
JULIE BISHOP    Absolutely not. That  shows a fundamental misunderstanding of the obligations, the legal obligations of a lawyer and the obligations of a lawyer as a officer of the court. It also overlooks the citizen’s duty to inform authorities when you know there’s been a wrongdoing. In this case it was defrauding a union of hundreds of thousands of dollars of money, of union fees.
 
Now in fact the issue here is that when Julia Gillard says she found out about it all, there was already an inquiry underway. That is not true. There was not a police inquiry underway. The AWU didn’t find out about the WA slush fund until about 12 months later. So it’s very misleading of her to say there was already an investigation underway into the Perth slush fund. There was not.
 
She also had an obligation to her client the AWU. It’s an obligation that overrides any relationship she had with her boyfriend. It put her in a terribly conflicted position but she had a duty to inform her client that she believed that there had been a massive fraud perpetrated by her boyfriend. She also owed a duty to her partners, she has a fiduciary duty to her partners.
 
CHRIS KENNY          Julie Bishop I’m sorry to interrupt but we do need to finish up on the final point. The revelations today that claims that $5000 in cash was paid into Julia Gillard’s bank account back then via Bruce Wilson. And here’s what Julia Gillard had to say about that today:
 
Julia Gillard: This matter has been trawled over for the best part of 20 years and at the end of it being trawled over for the best part of 20 years there is not one finding of wrongdoing by me and there’s a reason for that. I didn’t do anything wrong, this kind of smear that we are seeing in today’s Australian, no allegation of wrongdoing by me, but the story’s been published today. This is smear pure and simple and I’m not going to dignify it by becoming involved in it.
 
CHRIS KENNY          So very strong response from the Prime Minister today. Very very briefly Julie Bishop if you could just, you’ll be following this up in Parliament presumably because you do want to ask more questions?
 
JULIE BISHOP    That’s right I will and the $5000 issue was raised by an AWU member of the union, not by the Liberal Party. The Australian has just published what one of the union members said and if Julia Gillard has an explanation for why $5000 was paid into her account then she should give it and this is in the context of a scandal involving hundreds of thousands of dollars and perpetrated by her boyfriend against the AWU, a client at her firm. She should answer why that payment was made. She didn’t deny it, why that payment was made. If she has an explanation, fine, but I note, she didn’t say it today.
 
CHRIS KENNY          Thanks very much for your time Julie Bishop in Perth, appreciate your time. Deputy Opposition Leader Julie Bishop.
 
JULIE BISHOP    My pleasure.
 
CHRIS KENNY          We’ll be going to a break in a moment but that’s the story, that’s the accusations, that’s some of the detail that is lacking from people if you want to get your head around this issue you can call it a smear or some sort of a campaign if you like but there’s a lot of factual information there and if the Prime Minister can provide the answers then I think the Australian public deserves to hear them. Back in a moment.