The hive-mind that is the Canberra Press Gallery has apparently decided that PM Julia Gillard’s activities at Slater & Gordon in the 1990s are to be deemed a non-story. Presumably they think the fact that she survived journalists’ probing for over an hour only a few weeks ago proves that there’s nothing in it, at least in the absence of evidence that she knew the money her ex-boyfriend union secretary Bruce Wilson used to buy a house in the name of his crony Ralph Blewitt was actually stolen from the AWU.
However, on a dispassionate analysis three stories published in the Fairfax media in the last few days raise new and very real and serious questions about Gillard’s behaviour at that time. See Property Links PM to Stolen Funds, The Man Who Knew Too Much and PM vouched for union body caught in corruption scandal.
Giving false information to officials?
In the last of these three stories it is reported that:
A TRADE union association from which hundreds of thousands of dollars were stolen by a former boyfriend of the Prime Minister, Julia Gillard, was only registered after Ms Gillard vouched for its legitimacy to authorities in Western Australia.
Ms Gillard – then a salaried partner with the law firm Slater & Gordon – wrote to the WA Corporate Affairs Commission in mid-1992 confirming that the Australian Workers Union Workplace Reform Association was a legitimate organisation under WA law.
In August the Herald reported that Ms Gillard may have breached West Australian corporations law by her involvement in setting up an association for her then-boyfriend Bruce Wilson, a senior AWU official, because the application documents, lodged by then state secretary, Ralph Blewitt, for the association stated its purpose was the ”development of changes to work to achieve safe workplaces”.
However, on Gillard’s own admission she actually knew that the real purpose of the Association was to serve as a “slush fund” to gather “donations” from AWU members to fund the re-election campaigns of Wilson and his cronies.11. KP : In fact it seems many of the “donations” were actually extorted from the WA corporate sector by union officials, but there is currently no evidence that Gillard was aware of this. [↩]
As the Fairfax story explains:
The West Australian Associations Incorporation Act in force in 1992 prohibited associations designed to secure a pecuniary profit for members and broadly restricted their activity to benevolent, charitable or cultural purposes. Melbourne lawyers Galbally Rolfe – representing Mr Blewitt – have been pressing Slater & Gordon for more than a month to enable him to gain access to the association incorporation file.
Not only does this new information indicate that Gillard’s involvement in the affair was more extensive than to “provide limited professional advice about establishing the association”, as she asserted to journalists when being questioned a few weeks ago, but it also suggests the strong possibility that the PM may have committed a criminal offence, not only against corporations law but probably at general law. Section 170(1) of the WA Criminal Code reads:
(1) Any person who, being required under a written law to give information, whether orally or in writing, to another person, knowingly gives information to the other person that is false in a material particular is guilty of a crime and is liable to imprisonment for 3 years.
Of course it is possible that Gillard first learned about the true “slush fund” purpose of the Association at some time between 1992 when she misinformed WA corporate affairs authorities and 1995 when she was questioned about it by Slater & Gordon partners. However at the very least this information raises new questions about the Prime Minister’s integrity in the context of possible criminal breaches of the law.
Falsely witnessing a signature?
The same Fairfax story reports new allegations by Wilson crony Ralph Blewitt about the witnessing of a power of attorney signed by Blewitt and which was later used by Wilson to sign the contract and transfer for purchase of a Fitzroy unit in Blewitt’s name (Gillard accompanied her boyfriend to the auction):
WA police later confirmed that more than $400,000 had been stolen from the association by Mr Wilson, including about $100,000 used to buy a Fitzroy unit in the name of the AWU state secretary, Ralph Blewitt.
Mr Blewitt had not seen the property before it was bought at auction by Mr Wilson, in the company of Ms Gillard, using a power of attorney for Mr Blewitt that she prepared.
Mr Blewitt claimed this week he signed the power of attorney in Perth some time in the week of February 13, 1993 in the presence of Mr Wilson. He said Ms Gillard – whom the document shows as witnessing it on February 4, 1993 – was not present.
No doubt Blewitt is far from the world’s most credible witness, but If true this is an extraordinary allegation evidencing professional misconduct by a lawyer in falsely witnessing an important legal document. Even now it should not be difficult to establish by independent evidence whether Gillard went to Perth or Blewitt came to Melbourne at the material time.
Conduct of this sort has always been regarded as professional misconduct, as a recent VCAT decision involving solicitor Rodney Lamplugh illustrates:
Clearly, the courts and the community generally place great reliance on statements by solicitors that they have witnessed parties’ signatures to important documents such as mortgages and associated declarations. The same applies to statements by solicitors that they have explained the effect of executing such documents to the parties involved. The making of false declarations by solicitors undermines the trust which is placed in them, and for this reason constitutes professional misconduct.
Conflict of interest?
It also appears that Ms Gillard may have acted for the purchaser Blewitt, the proposed “tenant” Wilson and the mortgagee Slater & Gordon in the one transaction in relation to the Fitzroy unit:
Conveyancing files prepared in Ms Gillard’s office in early 1993 show Mr Wilson handled almost all of the matters associated with the purchase and that she waived professional fees totalling more than $1600.
The files show that $67,722.20 towards the purchase was transferred to Slater & Gordon’s trust account on February 22, 1993. That money was later revealed to have been taken from the AWU Workplace Reform Association.
The balance of the purchase was funded by a $150,000 mortgage with Slater & Gordon loan funds arranged by Ms Gillard.
Almost all of the correspondence relating to the settlement was addressed to Mr Wilson, who also swore a statutory declaration of behalf of Mr Blewitt to effect the mortgage.
A detailed letter dated March 17, 1993, outlining the conditions of the mortgage – including instructions on how to make the mortgage loan repayments – was sent to Mr Wilson’s then home address in Carlton and not copied to Mr Blewitt.
In another document Ms Gillard requested a memo from Slater & Gordon staff on how penalty interest was to be paid.
In her September 1995 meeting with the firm’s senior partner, Peter Gordon, and general manager Geoff Shaw – details of which were first revealed last month – Ms Gillard said Mr Wilson had persuaded Mr Blewitt to purchase a property where he would become tenant.
Acting for three separate parties in a transaction, each one of whom had clearly divergent interests, has always been a breach of professional ethics for a solicitor. Rule 8.5 of the current Victorian Professional Conduct and Practice Rules 2005 deals with the situation of acting for multiple parties to a transaction:
8.5 A practitioner must not act where the practitioner is acting or intending to act:
8.5.1 for both vendor and purchaser in connection with the contract for the
sale of land or a transfer of land for value at arm’s length
8.5.2 for both vendor and purchaser in connection with the contract for the
sale of a business at arm’s length;
8.5.3 for both lessor and lessee in connection with the lease of land or an
agreement for the lease of land for value at arm’s length;
8.5.4 for both financier and borrower in connection with the loan of money or
provision of finance or an agreement to lend money or provide finance;
8.5.5 for both the purchaser of land and the lender of money or provider of
finance intended to be secured by a mortgage of that land,
unless and until the practitioner obtains the written acknowledgment and agreement
of each party in or to the effect of Form 1 in the Schedule to these rules after first
fully informing that party in writing concerning the potential disadvantages to that
party of the practitioner so acting.
Did Ms Gillard explain the issues involved in acting for multiple parties in this transaction and obtain their agreement (formal or informal) to her so acting?
Whose money was it?
Another interesting question not so far made clear is whose money was the $150,000 in mortgage funds loaned to Blewitt/Wilson by Slater & Gordon at Ms Gillard’s instance? And what prudential processes (if any) surrounded the loaning of this money? Was it Slater & Gordon’s own money or client funds entrusted to the firm for investment on mortgage security?
Ms Gillard’s attitude to lending the money to Blewitt could at the very least be described as cavalier:
”What was said to me at that stage was that Ralph had an interest in investing in a property … and that Bruce had talked to him about making an investment in Victoria rather than Western Australia because it would suit everybody’s purposes,” she said, according to a transcript of the meeting.
The plan had ”made sense” to her. ”I didn’t have any particular reason to question it in great detail, or at all,” she said.
Ms Gillard also conceded she ”hadn’t made a careful enquiry” about the financial circumstances of Mr Blewitt – ”a middle-aged man on his second marriage”. ”His wife worked. So, you know, they weren’t Mr and Mrs Onassis but they were relatively well positioned,” she said.
Did Slater & Gordon have any other approval processes required before lending $150,000 to a client (a considerable sum back in 1992)? Or could such amounts be lent solely on the authority of a partner like Ms Gillard? Although practices became looser towards the end of the freeewheeling 90s, in 1993 it was normal lending practice for a mortgagee to require at the very least documentary proof of a prospective borrower’s savings record before approving a loan. Such a safeguard would surely be even more essential if the loan funds were client trust funds held by Slater & Gordon for mortgage investment. Perusal of Blewitt’s savings record would surely have provided a strong indication that he had not saved through his own efforts the $100,000 he paid for the deposit and stamp duty on the unit purchase, even if it didn’t clearly indicate that those funds were stolen.
In the circumstances you can understand the attitude of former S & G partner and now whistleblower Nick Styant-Browne:
”I was happy to remain under the radar for ever and had previously disavowed making any statements when the issue had been raised because I just thought it would go away,” Styant-Browne says. ”But when Blewitt emerged I formed the view, and Peter agreed with me, that the story had some traction and that it could rebound to us in a very unhappy way.
”And there was a lot of stuff on the internet saying that Slater & Gordon had worked with Gillard to cover up the improprieties of her boyfriend in relation to the AWU – that was the line. And so that concerned both of us and that’s why we started discussing extensively making a joint statement.”
With Styant-Browne still leaking to the media and Blewitt saddling up Melbourne law firm Galbally Rolfe, you can bet that this story still has a long way to go. I wonder when the Canberra Press Gallery will wake up to that fact and realise that there’s almost certainly more to this saga than just the odious utterances of the appalling Larry Pickering?
Update/reflection – Although we’ll see more on this story, it currently seems unlikely that it will be anything like a “smoking gun” for Julia Gillard’s leadership or the Labor government. Only simplistic slogans that catch the attention of disengaged swinging voters and “go viral” have that potential. Moronic and grossly exaggerated memes like “JuLIAR” or “Tony’s a sexist pig”.
These allegations aren’t in that category; they take some thought and analysis to understand, although to a limited extent they might feed the “JuLIAR” meme if they somehow get traction and are reported more extensively in the mainstream media.
However it’s currently difficult to see how that would occur. They are not grave offences and they occurred around 20 years ago. It’s highly unlikely that charges would ever be preferred or even a formal investigation ordered.
What these comparatively ancient events do suggest is that Julia Gillard has always had a propensity to adopt audacious, slightly dodgy and not very well-considered short term tactics. It’s a character trait about which her Cabinet colleagues perhaps should be more alert. Sometimes those tactics come off and sometimes they fail spectacularly. Labelling Tony Abbott a misogynist so far seems to have come off, while appointing Slipper as Speaker has been a crashing failure.