Trade Union Royal Commission, Counsel Assisting Opening Statement, 10 June 2014

CHECK AG AI NST DE LIVE RY

ROYAL COMMISSION INTO TRADE UNION GOVERNANCE AND CORRUPTION

AUSTRALIAN WORKERS’ UNION – WORKPLACE REFORM ASSOCIATION INC

FURTHER HEARINGS COMMENCING 10 JUNE 2014

OPENING STATEMENT BY COUNSEL ASSISTING

On 12 and 13 May 2014 the Commission heard evidence concerning the Australian Workers’ Union – Workplace Reform Association Inc (Association).

The hearings commencing today will continue to examine the activities of the Association.

In addition, the hearings commencing today will examine the activities of another fund associated with the Australian Workers Union, namely the AWU Members’ Welfare Account (the Members’ Welfare Account).

The hearings commencing today are listed to continue until Friday, 13 June 2014.

The hearings will then resume in Perth on 23 June 2014.

There will be further hearings in relation to the Association and the Members’ Welfare Account subsequent to the hearings in Perth.

Evidence heard 12 and 13 May 2014

It may be useful to begin by summarising briefly the evidence received by the Commission on 12 and 13 May 2014 in relation to the Association.

The Association was incorporated in Western Australia in June 1992. From about April 1992 it began issuing invoices to Thiess Contractors Pty Ltd (Thiess) in relation to workplace reform 2 services allegedly provided by the Association to Thiess in connection with the Dawesville Channel project.

On the evidence given on 12 and 13 May 2014 no such work was carried out. To the extent that the invoices issued by the Association suggested that workplace reform services had been provided during the years 1992 and 1993 those invoices were false.

Similar evidence was given in connection with a separate project known as Melbourne Water. Again invoices were issued by the Association in connection with services allegedly provided by the Association to Thiess in connection with Melbourne Water when in fact no such work was done.

As a result of the issuing of such invoices the Association accumulated some hundreds of thousands of dollars in various Commonwealth Bank accounts.

The moneys so collected were used for various purposes unconnected with advancing the interests of the AWU or its members, including to pay in part for the purchase of a property at 85 Kerr Street Fitzroy (Kerr Street property)

Further evidence to be called

In the hearings listed to commence today the evidence of a further fifteen witnesses will be called, as follows: -

Sydney witnesses

(1) Ian Walter Cambridge. Mr Cambridge is currently a Commissioner for the Fair Work Commission. In the early 1990’s he was an official at the AWU. He describes the background to the circumstances in which the AWU first became aware of the activities of Mr Wilson and Mr Blewitt. In particular he describes how, at a meeting of the AWU’s Finance Committee on 2 August 1995, details as to the Members’ Welfare Account were revealed. Mr Cambridge also provides an analysis of the bank accounts of both the Association and the Members’ Welfare Account, together with a number of other funds or accounts associated with Mr Wilson.

(2) Nicholas Neil Jukes. Mr Jukes was in the early 1990’s the General Manager for Thiess in Western Australia. He had discussions with Mr Wilson concerning the proposal in which the AWU would provide a representative to assist it to implement workplace 3

reform services. Mr Jukes also wrote to the Building and Construction Industry Training Fund seeking funding for “a full time trainer for the project”.

(3) Olivia Nora Palmer. Ms Palmer was in the early 1990’s working as a legal assistant for the law firm Slater & Gordon. She had day to day carriage of the conveyancing in respect of the Kerr Street property.

(4) Konstantinos Spyridis. Mr Spyridis was a builder. His evidence is to the effect that he carried out work in respect of the AWU offices at Carlton and also in respect of a property at 36 St Phillip Street, Abbotsford (Abbotsford property). Mr Spyridis says that he did not undertake any work at the Kerr Street property. Mr Spyridis gives evidence to the effect that he was paid for all work carried out by him on the Abbotsford property by the owner of that property.

(5) Athol James. Mr James is a builder. He also did work on the Abbotsford property. Mr James says that he observed Mr Wilson handing cash to the owner of that property to enable her to pay for the work carried out by Mr James.

(6) Wayne John Hem. Mr Hem was an employee of the AWU at the relevant time. He gives evidence to the effect that at the request of Mr Wilson he deposited the sum of $5,000 in cash into a bank account maintained by the owner of the Abbotsford property. He also deposes that he saw Mr Telikostoglou pay cash to a tradesman at the Abbotsford property.

(7) Robert John Kernohan. Mr Kernohan was an official at the AWU during the early 1990’s. He has given a statement in which he indicates that he was provided with the sum of $6,500 to assist with election expenses by Mr Wilson.

Perth witnesses

(8) Christine Anne Campbell. Ms Campbell was in the early 1990’s Mr Wilson’s secretary at the Perth office of the WA branch of the AWU.

(9) Mark Ronald Crofts. Mr Crofts was at the relevant time an employee of Woodside and describes the circumstances in which Woodside received payments back from the AWU Members’ Welfare account. 4

(10) George Dean. Mr Dean is and was at the relevant time an employee of Thiess. In 1992 he worked on the Dawesville Channel project. His evidence is summarised below.

(11) Colin Gibson. Mr Gibson was also an employee of Woodside. He gives evidence concerning his dealings with Mr Wilson and Mr Blewitt.

(12) Tony Alexander Lovett. Mr Lovett was an organiser employed by the AWU in 1992 and 1993. His duties included providing services to AWU members working on the Dawesville Channel project.

(13) Brian Douglas Pulham. Mr Pulham is and was at the relevant time an employee at Thiess. He approved the invoices issued by the Association to Thiess for the period April 1992 to September 1993 in respect of the Dawesville Channel project.

(14) Colin Geoffrey Saunders. Mr Saunders was an industrial officer employed by the AWU in the early 1990’s. Part of his responsibilities included the Dawesville Channel project.

(15) Steve Schalit. Mr Schalit was employed by Thiess during the relevant period. He was a project engineer on the Dawesville Channel project. Following Mr Pulham’s promotion Mr Schalit approved invoices issued by the Association to Thiess for the period October 1993 to October 1994. Mr Schalit reported to Brian Pulham.

Matters established by the evidence in respect of the Association

For present purposes, the first critical issue is whether the Association was in fact providing workplace reform services to Thiess in respect of the Dawesville Channel project between 1992 and 1994.

It seems clear that neither Mr Blewitt nor Mr Wilson were themselves providing workplace reform services at the Dawesville Channel project. Mr Wilson does not suggest that he did any such work. Mr Wilson had moved to Melbourne from about mid July 1992.

The starting point is with the evidence of persons who were actually working on the Dawesville Channel project during those years and who would have been in a position to know if a representative of the Association had been providing workplace reform services. 5

In the early 1990’s the WA Branch of the AWU employed two organisers or officers who attended at the Dawesville Channel Project on a regular basis, Mr Colin Saunders and Mr Tony Lovett.

The Commission will be calling evidence from each of Mr Lovett and Mr Saunders.

Mr Saunders’ evidence is to the effect that: (1) he never heard of the Association at the time; and (2) he was not aware that Thiess was paying the Association for the provision of workplace reform services;

Mr Lovett also deposes that he was not aware of the existence of the Association. He says that his duties did not include training or the facilitation of training of personnel at the site. He says that apart from himself and Mr Saunders he was not aware of any AWU organiser who would attend at the Dawesville Channel project.

The evidence of Mr George Dean is on point. He was employed by Thiess but while working on the Dawesville Channel project he was elected by the workers as shop steward. In that capacity he liaised with the AWU.

Mr Dean’s evidence is that he dealt with the two AWU organisers just mentioned, Mr Lovett and Mr Saunders. He cannot recollect any other officials from the AWU coming to the site. Nor can he remember any AWU personnel coming out to the site to promote training programs. He cannot remember any training portables on the site.

These three witnesses were on the ground at the Dawesville Channel project. They were also employed by, or closely associated with, the WA Branch of the AWU.

It is simply not credible that a representative of the Association was providing hundreds of hours of training or workplace reform services per month yet none of these witnesses was aware of it.

Thus the evidence of these three witnesses strongly suggests that the Association was not in truth providing any workplace reform services at the Dawesville Channel project, despite regularly sending invoices for such work.

The next step is to consider the situation from the point of view of the recipient of the Association’s invoices, Thiess.

Unsurprisingly, senior management at Thiess was not aware of precisely what was happening on the ground at the Dawesville Channel project. 6

Mr Jukes was the General Manager for Western Australia at the relevant time. His evidence is that he understood from discussions with either Mr Trio or Mr Pulham that the AWU provided a representative to facilitate training of Thiess workers on the Dawesville Channel project.

However Mr Jukes says that he believes that the services provided “waned” over the course of the project. Mr Jukes does not know the names of the representatives he believed the AWU provided.

The telling point for present purposes is that Mr Jukes’ knowledge or understanding derived from information provided to him by two other Thiess employees, namely Mr Trio and Mr Pulham.

Mr Trio was Manager, Western Australia. He reported to Mr Jukes. Mr Trio had ultimate responsibility for the Dawesville Channel project. However Mr Trio worked from the Thiess office in Perth – he did not have day to day contact with what was happening on the site.

Mr Trio says that the Dawesville channel’s construction was initially controlled by Mr Pulham but, during the course of the project, Mr Pulham was promoted and his position was filled by Mr Schalit. Mr Schalit continued to report to Mr Pulham.

Mr Trio says that to his knowledge no individual at Thiess had responsibility of ensuring that there was an AWU employed representative on site at all times to facilitate the implementation of training. Mr Trio thought that the Association was part of the AWU. He thought that the AWU would provide the training on site or from Perth as the project demanded.

Mr Trio says further that he relied on the approval of the managers beneath him, Mr Pulham, and later Mr Schalit, to confirm that the hours charged by the hours charged by the AWU were fair and reasonable.

One then comes to Mr Pulham. He personally approved from about April 1992 to September 1993 inclusive the invoices from the Association, by writing “OK to pay” on the invoice.

Mr Pulham’s evidence is that his procedure when approving invoices issued by the Association was to check that the hours claimed in the invoice were in accordance with the letter of agreement from Thiess to the Association dated 16 March 1992.

In other words, Mr Pulham did not go further and ensure that a representative from the Association was actually present on site or was actually providing workplace reform services. 7

Mr Pulham says that he recalls that two AWU organisers, Tony Lovett and Colin Saunders were on site at Dawesville at various times and that he (Mr Pulham) assumed that one or both was the Association’s representative.

As already discussed however, both Mr Saunders and Mr Lovett will be called and in fact neither was a representative of the Association.

Thus for at least the first 21 months of the life of the Dawesville Channel project there is no one, from the AWU or Thiess or anywhere else, who can point to any work actually being carried out by or through the Association.

That leaves Mr Schalit, who took over from Mr Pulham in about October 1993. Mr Schalit does say that training took place on the site and that he assumed that this was what the invoices related to.

However Mr Schalit has not identified what this training was; who was doing it; whether it was being conducted by the Association; nor whether there was any correlation between the training he believes occurred and those invoices he approved.

The proposition that the Association was generating invoices for work that was never done is corroborated by the fact that the Association appears to have been a mere contrivance.

There are no written records of any members. For example, there is no register of members. There are no records of any management committee meetings. The Association paid no tax. It had no accounts. It had no assets. The Association did not maintain any records at all, save for the documents lodged at its incorporation.

When it comes to employing a representative, there are no records of the basis on which a representative was allegedly engaged by the Association to carry out work for it. There are no records of wages paid by the Association to a person who attended at the Dawesville Channel project to provide workplace reform services. There are no records of what work that person is alleged to have done. There are no taxation records.

It will be submitted in due course that the above evidence establishes a number of matters, including the following.

The Association was established by Mr Wilson and Mr Blewitt. Mr Wilson was the driving force. 8

The Association was never more than a vehicle pursuant to which moneys were obtained through the provision of sham invoices. It did not engage in any genuine work.

It will be further submitted that the evidence establishes that Mr Wilson and Mr Blewitt caused the Association to engage in the above conduct deliberately and knowingly.

Mr Blewitt has already conceded this in evidence.

As to Mr Wilson, among other things, he set up the Association. It was his idea. He knew about the secret PO box to which Thiess cheques were sent. He was the Treasurer of the Association. He signed the application form to open its bank accounts. He was until about mid July 1992 the Secretary of the WA Branch of the AWU. He worked closely with Mr Blewitt, on a day by day basis. He knew that the Association was being paid by Thiess because he was happy to use the money for the purposes of buying the Kerr Street property.

In these circumstances it is inconceivable that Mr Wilson was not aware of the activities in which the Association was engaged.

Thus, it will be submitted that the evidence establishes that Mr Wilson conspired and agreed with Mr Blewitt to create the Association for the purpose of issuing false invoices to Thiess, thereby committing an offence under section 558 of the Criminal Code (WA).

It will further be submitted that Mr Wilson caused Mr Blewitt to render invoices to Thiess knowing at the time that they were false, in that they claimed payment for work that ha d never been done, and that this was done by each man deliberately, to procure a benefit for himself, thereby committing an offence under section 409 of the Criminal Code (WA).

The evidence further establishes that moneys acquired as set out above by the Association was used for at least the following purposes.

First, to pay in part for the purchase of the Kerr Street property. This point does not seem controversial.

Secondly, to pay for renovations at the Abbotsford property. There is a factual controversy about this. 9

Members’ Welfare Reform Account

As already noted, the hearings commencing today will also examine the activities of the Members’ Welfare Account.

On or about 24 November 1992 the AWU caused to be established with the Commonwealth Bank of Australia the Members’ Welfare Account, being cheque account number 3008 1000 9028 (known as the Australian Workers Union Members Welfare Association No 1 Account).

The Members’ Welfare Account seems to have operated initially as a “slush fund” in the sense that it received small payroll deductions from AWU officials and employees, typically in an amount of a few hundred dollars a week.

On 5 May 1993 Mr Wilson and Mr Jim Collins became the persons authorised to operate the Members’ Welfare Account, taking over from Mr Robert Smith.

On 16 September 1993 the first cheque was written on the account, being a cash cheque in the amount of $3,500.

A further cash cheque in the sum of $5,000 was written on 13 October 1993.

Thereafter there were a series of cheques written on the account. Some of these were for election purposes. For example, cheque number 21 written on 6 April 1995 in favour of Mr Bob Kernohan in the amount of $6,500 seems to have related to election purposes.

From 23 December 1994 Mr Wilson caused a series of significant cheques to be deposited into the Members’ Welfare Account. These are set out in the evidence, but include cheques totalling in excess of $50,000 each from both Thiess and Woodside.

It will be submitted that in effecting these payments Mr Wilson was deliberately diverting union money into an unaudited account, contrary to the Rules of the AWU and without the knowledge or consent of the Finance Committee or National Executive of the AWU.

Further, Mr Wilson was seeking in doing this to deploy union funds for election and other purposes, contrary to his duties an officer of the AWU.

Discovery of funds

The existence of the Association and the Members’ Welfare Account, together with a number of other funds or accounts associated, was uncovered by union officials in mid-1995. 10

Mr Wilson and Mr Blewitt resigned as part of a deal struck with some AWU executives, being a deal which included redundancy payments to them made out of the union’s funds – indeed out of union moneys that had been earmarked for bereavement payments to relatives of deceased members.

Further, the moneys Woodside and other employers had paid to the AWU, and which had been misappropriated into the Members’ Welfare Account, were not transferred to the union’s account but instead returned to those employers.

When Mr Cambridge discovered what was occurring he tried to stop it, but the money had already been dispersed. In subsequent court proceedings promoted by Mr Cambridge, orders were made that the decision to make redundancy payments to Wilson and others and the decision to pay the money back to employers were invalid.

Not only was there an attempt by some union officials to sweep the affair away with a payout to the offenders, but there was also a push against involving the Victorian police. Those who advocated for the police involvement were marginalised and victimised. Mr Kernohan was one union official who suffered this fate.

The extent to which union officials withhold information from the police in relation to investigations into potential criminal behaviour is likely to be a recurring theme during the life of this Commission, as is the mistreatment of whistleblowers.

Fair hearing for persons affected by the evidence

In conducting these hearings the Commission has endeavoured to ensure that persons who may be affected by the matters raised in evidence were treated fairly and reasonably and had every opportunity to respond.

Among other things, the Commission has provided in advance of the hearings witness statements by each of the 15 witnesses set out above to persons who may be affected by the evidence in those statements, including Mr Wilson.

On 4 June 2014 Mr Wilson provided an initial statement of evidence in reply, the body of which comprised 91 pages, supplemented by a large number of exhibits.

In his initial statement of evidence Mr Wilson suggested that he had not had time to address fully all matters which he wished to put forward. 11

The solicitors assisting the Commission then wrote to Mr Wilson’s solicitors inviting him to put on a further or supplementary statement addressing any additional matters of concern to him.

Mr Wilson took up this invitation and served an additional statement, also supplemented by exhibits. There is no suggestion in this supplementary statement that Mr Wilson has now not had time fully and fairly to put forward the totality of his case.

At least one other person has also provided a statement of evidence in response to the evidence served by the Commission.

A number of persons affected by the Commission’s evidence have also made requests for further information and documents. The Commission has endeavoured to comply with all such requests to the extent it reasonably can.