In the Beginning Was the Cut, and the Cut Was with Thiess

In the beginning was the Cut, and the Cut was with Thiess Two things stand out above all others when trying to come to grips with the AWU fraud. The first is the sheer volume of information available – invoices, cheques, memoranda, reports, news articles, commentaries and websites to name but some. The second is the overwhelming number of unanswered questions that attend this fraud. No matter where one looks, there exists a myriad of unresolved issues and outstanding matters blocking the view ahead. And the situation is greatly compounded by the enormous and orchestrated cover up carefully put in place over a period spanning nearly two decades. Regardless of the complexity, however, it is not long before newcomers to the AWU fraud encounter two recurring themes – the Dawesville Cut project, and the Construction Training Fund. The purpose of this article is to provide general explanation of the Dawesville Cut project and the Construction Training Fund. The benefits of such explanation are twofold. First, understanding these two dimensions provides a useful context for understanding the AWU fraud itself – especially the beginnings of the fraud. Second, understanding these two dimensions provides a more efficient and more effective means of “joining the dots” in what can only be described as a tangled mass of detail and evidence. In short, a clear understanding of the Dawesville Cut project and the Construction Training Fund is central to better understanding the entire AWU fraud. The Dawesville Cut project Eighty kilometres south of Perth, Western Australia, is a massive natural coastal wetland located just south of the town of Mandurah and just north of the Yalgorup National Park. The wetland is 136 square kilometres in area, and lies within the Peel-Harvey Estuary. It is situated where the Harvey River, the Serpentine River and the Murray River (no, not that Murray River) discharge into Peel Inlet. In turn, Peel Inlet lies close to the Indian Ocean, separated from it by a narrow strip of land. There is a natural estuary opening from Peel Inlet to the Indian Ocean just south of Mandurah township. The entire estuarine wetland is generally no more than two metres deep, and is home to abundant marine wildlife and birdlife. Dolphins occasionally visit the area. The health of the estuary is maintained by the “flushing” action of ocean tides flowing through the natural estuary opening to the sea. However, by the mid-1980s a major environmental (and political) problem had developed. Due to the establishment of agricultural land and piggeries along the local rivers during the 1960s and 1970s, the discharge of nutrients into the river system had become unsustainable. Massive algal blooms (accumulations of microscopic and other algae) began to form in Peel Inlet. The blooms became so prolific, and so widespread, that by the early 1980s the water in Peel Inlet was becoming toxic, especially during the summer months. This was having a devastating effect on the marine wildlife and birdlife inhabiting the area. So much so, that the somewhat daunting environmental problem rapidly became a significant political problem for the Western Australian government. Page 1 of 5 Several scientific studies were commissioned in order to pinpoint the causes of the ecological disaster, and to suggest solutions. The studies recommended a range of measures to improve water quality in Peel Inlet, including improved agricultural practices. But two measures were proposed as providing the best and most effective outcomes in the short term: (1) widening and deepening the natural estuary opening near Mandurah, and (2) creating a new man-made channel from Peel Inlet to the Indian Ocean. Both proposals were accepted by the Western Australia Government. The new man-made channel came to be known as the Dawesville Channel or, more commonly in local parlance, as the “Dawesville Cut”. The Dawesville Cut would be 2.5 kilometres in length, 200 metres wide, between 6 and 6.5 metres deep and would involve the removal of 4.5 million cubic metres of soil and rock. The project would also involve the construction of retaining walls, a bridge and breakwater barriers. The total cost would be $37 million. On any measure, the Dawesville Cut project was a huge undertaking – both financially and from an engineering perspective. The man-made channel would have the effect of allowing saline sea-water to regularly flush the estuary using tidal flows. By adding to the flushing action at the natural estuary opening, the channel would increase water exchange between the estuary and the ocean, and facilitate the flushing of nutrients from Peel Inlet out to sea. The Western Australia State Government contract for the Dawesville Cut project was awarded to Thiess. Channel construction commenced in 1990 and was completed in April 1994. The project achieved its environmental objectives. No algal blooms have appeared in Peel Inlet since 1994. The Construction Training Fund The Western Australia Construction Training Fund (CTF) scheme was established by Act of State Parliament in 1990. The scheme was launched to improve the skills base in the building and construction industry, and was not overly complex in either its aims or its operation. In essence, the scheme sought to collect a small training levy from all construction projects in Western Australia, and then return those funds to the industry in the form of grants that would support training and skills development. A training levy was applied to all residential, commercial and civil engineering projects undertaken in the State where the total value of construction was $20,000 or more. The rate of the levy was 0.2% of the total contract price (inclusive of GST) or $200 in every $100 000 worth of project value. Two kinds of training expenditure were supported by the CTF: 1. Taking on new apprentices. 2. Training programs for existing employees. The operations of the CTF were directed by a Board overseeing the receipt of levy monies, and the subsequent disbursement of those monies to deserving companies that had applied for funding for training purposes. In relation to training programs for existing employees, training had to be delivered by “registered training providers” approved by the Board. This requirement was to ensure that financial grants for training were expended on bona fide training programs. Page 2 of 5 How understanding context assists in understanding the AWU fraud Having a general appreciation of the Dawesville Cut and the CTF contributes to understanding the AWU fraud in many ways and on many fronts – far too many to address in this article. However, one aspect of the fraud is singled out here to illustrate the point, namely the beginnings of the AWU fraud. But the term “understanding” needs to be interpreted broadly. Despite having insight and knowledge, “understanding” in the literal sense of the word can often be elusive. At the very least, though, insight and knowledge should enable sensible and correct questions to be framed and put. By far the most important vehicle used to operate the AWU fraud was the sham entity set up by Julia Gillard and Bruce Wilson – the now infamous Australian Workers’ Union Workplace Reform Association (AWU-WRA). Much of the money that flowed into and out of the AWU-WRA bank accounts originally came from Thiess – one of Australia’s largest construction companies. And much of the money that Thiess paid across to the AWU-WRA had come from CTF grants that Thiess had received for training purposes. It is most likely a happy coincidence that Thiess won and commenced the Dawesville Cut project at around the same time the CTF was established by Act of Parliament. But it is hard to imagine that such a fortuitous convergence of events would be lost on people with a keen eye to enriching themselves by illegal means. With a bit of imagination, and strategic alliances with key legal and corporate associates, one could easily construct an instrument for a successful fraud. With the help of key legal associates, formally register an outwardly legitimate entity, and then have that entity accepted as a “registered training provider”. After that, issue “training” invoices on a regular basis to key corporate associates, sit back and watch the money roll in. On 22 April 1992, Bruce Wilson’s union sidekick, Ralph Blewitt, lodged an application with the Western Australia Commissioner for Corporate Affairs to formally register the sham organisation Gillard and Wilson had established, the AWU-WRA. Interestingly, in April, the yet-to-be-registered AWU-WRA issued its first invoice – Invoice 0001. The invoice, addressed to the Perth office of Thiess, was simply dated “April 1992”, and requested that $25,272 be remitted to a post office box in the Perth suburb of Northbridge by 30 April 1992. The invoice was for services rendered during the months of January ($8,942), February ($7,776) and March ($8,554). The services covered some 702 hours, and were described as “Provision of AWU Workplace Reform Association Representative, Dawesville Channel Project – as per agreement”. Aside from the fact that the AWU-WRA was issuing an invoice even before it was formally registered, the invoice signals the existence of an agreement to “provide” an AWU-WRA representative (presumably on site at the Dawesville Cut) for between 50 and 60 hours each and every week for the first three months of 1992. At the time, only three people are likely to have known of the existence of the AWU-WRA, namely Ms Gillard, Wilson and Blewitt. If AWU-WRA Invoice 0001 is to be taken at face value, one of these three people either spent a lot of paid time on site at the Dawesville Cut, or they were paid handsomely for not being there at all.

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