By ABC's Barrie Cassidy

Photo: To this point there has been no substantiated allegation of wrongdoing. (AAP: Alan Porritt)

During the Whitewater scandal, Bill Clinton's opponents went flat out to destroy the president and came up empty. As Barrie Cassidy writes, the Coalition better hope the AWU slush fund affair doesn't follow the same path.

There are uncanny similarities between the AWU scandal in Australia and the first major scandal of the Clinton administration, Whitewater - a story that I covered while based in Washington in the early 1990s.

The origins of Whitewater went back 16 years before Bill Clinton was elected.

In the late 1970s, Bill Clinton was Arkansas' attorney-general earning a modest $US35,000 a year, and his partner Hillary was a legal aid at a small Little Rock law firm.

An old friend Jim McDougal and his wife Susan approached the Clintons to invest in building vacation homes along the White River near Little Rock. Soon afterwards, the scheme failed, and to prop it up, McDougal made illegal transfers of money from his own savings and loan association, Madison Guaranty.

Then, a decade and half later, while McDougal was being investigated for that and other matters, the Clinton name turned up on documents. That set off a media and political frenzy, with numerous journalists digging back into the Clintons' past.

Bill Clinton insisted he had done nothing wrong; that he knew of no illegal activity and that when the investment went bust, he and Hillary remained a part of the Whitewater Development Corporation in name only and had no further involvement in any of McDougal's business enterprises.

Clinton said the McDougals were honest in their dealings with him, and that he had nothing to do with the management of the investment, and kept no records or books.

Susan McDougal said only that the Clintons had done nothing wrong. She eventually went to jail for contempt because she refused to give evidence to a grand jury.

The most damaging evidence came from a former Arkansas municipal judge and banker, David Hale, who worked with McDougal on the loan.

Hale, until the 1990s, said nothing about the Clintons. But once he was indicted on unrelated fraud charges, he cut a deal with the prosecutors, accepting a reduced sentence in return for evidence before the grand jury investigating Whitewater.

Hale alleged that Clinton had pressured him into making a loan to the McDougals. Because he had said nothing up until then, his testimony was dismissed by many as lacking in credibility and self-serving.

The story dragged on for many damaging months, but after three separate inquiries, there was nothing to link the Clintons with any of the criminal conduct committed by others.

The Democrats dismissed the episode as a witch hunt, and the Republicans were left frustrated that the scandal caught up so many but missed the biggest fish.

Clinton faced off against his chief political accuser, Senator Bob Dole, in the 1996 presidential election and won with 379 electoral college votes to 159, an improvement of nine electoral college votes on the 1992 election.

In the dying days of the scandal, an owner of one of the former Whitewater vacation homes hung a large sign out for the constant stream of reporters: "Go Home, Idiots."

If the "Go Home, Idiots" moment arrived in the AWU scandal, then it was probably around 4.15pm on Tuesday, when the Deputy Leader of the Opposition, Julie Bishop, fronted a doorstop interview in Parliament's Mural Hall; though this time it was the reporters making the judgment that the allegations had gone too far.

Inadvertently or otherwise, Bishop had earlier left an impression with reporters that the Prime Minister had knowingly committed fraud. She had massively raised the stakes, effectively accusing the Prime Minister of corruption.

She had said:

... she (Gillard) and Wilson and Blewitt wanted to hide from the AWU that an unauthorised fund was being set up to siphon funds through it for their benefit and not for the benefit of the AWU.

The quote was put to her time and again at the 4.15pm doorstop and Bishop denied having said it. She eventually insisted her remarks applied to just Wilson and Blewitt, and not to Gillard. But for too long her obstinacy got in the way of clarity.

That, together with the secret meeting with Blewitt, was the moment when Bishop lost control of the prosecution. The fact that Tony Abbott was sitting mute in the Parliament, contracting out such serious allegations against the Prime Minister, wasn't helping the cause either.

The Republican strategy in the prosecution of the Whitewater story was to focus not so much on the end game, but to simply and constantly remind the public that the Clintons once associated with shady characters.

Stupidly, Coalition MPs were backgrounding journalists that that was their strategy in the AWU case as well.

At the end of the Whitewater media saturation, the public did not focus so much on shady characters from the past; they were left confused, certainly, but nevertheless satisfied that Clinton's opponents had gone flat out to destroy the president and came up empty.

That's the risk again for the opposition in this strikingly similar case; the breadth and volume of the media coverage - and the intensity and time committed to it by the Coalition - can only be justified if in the minds of the public there was ever a reasonable chance that the Prime Minister did something wrong.

To this point there has been no substantiated allegation of wrongdoing, and while that remains the case, the issue can only go one of two ways from here: either it will have a neutral outcome, or it will backfire on the Opposition.

Is the Opposition drowning in Whitewater? - The Drum - ABC News (Australian Broadcasting Corporation)

By court reporter Loukas Founten

Photo: Man seeking damages over his time at Port Hedland and Baxter (Mark Baker: Reuters)

An Iranian man is seeking damages from the Federal Government, claiming he was mistreated during his nearly five years in immigration detention.

William Khazraei, 43, was detained at the Port Hedland and Baxter immigration centres after his arrival in Australia in October 2000.

He is suing the Commonwealth and two companies which operated the detention centres.

Documents filed in the District Court in Adelaide said the man had suffered from depression, suicidal tendencies and an incurable skin condition since mistreatment in detention.

Mr Khazraei claimed staff verbally and physically abused him and denied him access to lawyers, medical staff and a means of communicating with his family.

He said the Commonwealth lacked effective strategies or adequate services to treat his mental illness.

"The plaintiff was subjected to verbal and physical abuse, threats and intimidation by detention centre staff and witnessed similar actions against other detainees," the documents said.

"(The Commonwealth and its agents who operated the centres) ought to have known the plaintiff was suffering from psychiatric and/or psychological damage and several other detainees were also exhibiting symptoms of serious psychiatric and/or psychological damage. [They] ought to have know there were systematic deficiencies in the manner of operation of the detention centres that were creating an ongoing risk of injury to the plaintiff and other detainees."

The statement alleged the man witnessed suicide attempts and hunger strikes.

"The failure by the defendants resulted in the plaintiff being detained in an environment which continuously placed his physical and mental health at risk," it said.

"The plaintiff was detained with others suffering from mental health problems and witnessed others harming themselves and attempting suicide by cutting or hanging. He also took part in and witnessed hunger strikes.

"[Mr Khazraei] was isolated from the general population in an environment which was unsafe and unsuitable and which exacerbated his psychiatric and psychological damage."

Claims contested

The Commonwealth is contesting the claim, saying Mr Khazrei had his skin condition and a history of depression prior to his arrival in Australia.

"In the plaintiff's medical check in his application for an Australian visa, dated 24th of October 2000, it was noted the plaintiff had suffered depression and nervousness three years prior to his arrival in Australia because he'd been mistreated, distressed psychologically and had been mentally tortured in Iran," its statement read.

"If the plaintiff suffered mental and physical damage as alleged, which is denied, then said damage was a result of pre-existing psychiatric or psychological conditions arising from psychological stressors prior to his arrival in Australia. Further, with respect to the plaintiff's skin condition, vitiligo is incurable and is a progressive skin disorder and the plaintiff's time in detention did not contribute to his condition."

The case will return to court in February.

Man seeks damages over detention treatment - ABC News (Australian Broadcasting Corporation)

The opposition is demanding the head of Julia Gillard amid new revelations about the prime minister's involvement in the AWU slush fund scandal.

Senior Liberal Christopher Pyne says Ms Gillard's position is "entirely untenable".

"If the prime minister had any respect for the parliament and the Australian public or the Labor caucus she would resign as prime minister today," Mr Pyne told reporters in Canberra on Thursday.

He was responding to reports that Ms Gillard admitted during a secret internal inquiry to writing to a West Australian government department to help overcome its objections to the creation of an association for her then boyfriend and client, union official Bruce Wilson.

The revelation, contained in a document released on Thursday after 17 years, comes after days of stonewalling by the prime minister, including in parliament, on the question of whether she had personally vouched for the Australian Workers' Union Workplace Reform Association.

Ms Gillard has avoided answering repeated questioning from Deputy Opposition Leader Julie Bishop on whether she wrote to the WA Commissioner for Corporate Affairs in 1992 to vouch for the bona fides of the association.

Mr Pyne said Ms Gillard had insisted she only had "a passing involvement" in the association.

"I'm not Hercule Poirot, but I can work out what's going on here," he said.

Earlier, Opposition Leader Tony Abbott said it appeared Ms Gillard gave false information to the WA authorities.

"For a senior lawyer to make false claims to an important statutory body like this is a very, very serious matter ... it's in breach of the law I would think and it's certainly very, very unethical," he told the Nine Network.

Mr Abbott later told reporters in Canberra: "If the prime minister has an explanation, she better give it, she better give it quick smart".

Parliamentary secretary Richard Marles said the opposition had "an utter obsession" with what Ms Gillard was doing 17 years ago.

"Let's take a deep breath about these so-called revelations coming out today," he told reporters.

"That is what a lawyer would do under instructions from their client."

It was not remarkable Ms Gillard could not recall a letter she wrote nearly two decades ago, Mr Marles said.

"They (the opposition) think they've got a smoking bazooka going on here.

"But when they pull the trigger, what they've got is a popgun."

Asked whether Ms Gillard's position was now untenable, Liberal senator Simon Birmingham said the prime minister had always lacked authority.

"She came to the prime ministership lying about her intentions for the job," Senator Birmingham told reporters in Canberra.

"She lied to the Australian people at the last election," he added, referring to her promise during the 2010 election campaign not to introduce a carbon tax.

"What the latest revelations indicate is that Julia Gillard may well have been just as adept at lying way back in her professional career in 1992 as she was to Australian voters in 2010."

Cabinet minister Bill Shorten dismissed the latest revelations, saying Ms Gillard gave advice on the incorporation of an association.

"That's it," he told Sky News.

"As far as I can tell any piece of correspondence is part of the process of setting up the fund."

Mr Shorten, a member of the AWU, insisted there was no smoking gun.

"There's ... so much smoke and fiddle and faddle from the opposition," he said.

PM should quit today: senior Liberal

Phillip Coorey Sydney Morning Herald chief political correspondent

Ms Bishop … on the defensive. Photo: Alex Ellinghausen

THE government has branded the opposition deputy leader, Julie Bishop, a liar and an embarrassment after she claimed not to know she was talking on the phone last week to the self-confessed fraudster and former union bagman Ralph Blewitt.

Ms Bishop's claim robbed the Coalition of momentum in its pursuit of the Prime Minister, Julia Gillard, with Labor saying she had no right to quiz Ms Gillard about her actions as a lawyer 20 years ago while ''lying'' about her own actions just last week.

Ms Bishop ignored the taunts in Parliament to keep pressing Ms Gillard, who again declined to state whether she had written a letter to West Australian corporate authorities in 1992 vouching for the bona fides of the slush fund established by her then boyfriend and Australian Workers' Union Victorian state secretary, Bruce Wilson.

Ms Gillard said she would answer the question if the Opposition Leader, Tony Abbott, asked it but, for the third day, he didn't ask a single question on the issue.

Just a day after Ms Bishop had to backtrack after accusing Ms Gillard of being complicit in and profiting from the union fraud 20 years ago, she was again on the defensive after Fairfax Media reported she had spoken to Mr Wilson's sidekick, Mr Blewitt, by phone last week.

This contradicted a claim Ms Bishop made on Tuesday when she said she had spoken to Mr Blewitt once, on Friday last week in Melbourne when a meeting at a cafe was arranged by the blogger, Michael Smith, who is relentlessly pursuing Ms Gillard over the slush fund saga. When pressed on Wednesday, Ms Bishop said that while in Perth last week, Mr Smith had rung her and ''said he was at dinner with someone who wanted to speak to me''.

''That person did not identify themselves and said he was pleased that the AWU fraud was being raised in Parliament,'' she said. She then claimed her phone dropped out and she did not know who she had been speaking to.

The government said this was entirely implausible. ''Who on earth was she expecting on the phone? Humphrey B. Bear? Oh, no, he can't talk,'' Ms Gillard said.

''The deputy leader of the opposition is now an embarrassment to the Leader of the Opposition and the opposition generally,'' she said.

Mr Blewitt also contradicted Ms Bishop, telling Channel Nine that he spoke to Ms Bishop by phone for about three or four minutes after Mr Smith handed him the phone.

The Trade Minister, Craig Emerson, said Ms Bishop was a liar. ''She should therefore resign or be sacked,'' he said.

Ms Gillard said she provided routine legal advice to Mr Wilson in 1992 to help him incorporate the association but had no further involvement with it or knowledge that Mr Wilson and Mr Blewitt were misappropriating funds from the association.

Bishop attack misfires after phone gaffe

A family associate of Eddie Obeid lied to the Independent Commission Against Corruption (ICAC) to protect the former Labor minister's son, a corruption inquiry has heard.

Obeid family friend and business associate, Andrew Kaidbay, told ICAC on Wednesday that he gave false evidence to a private corruption hearing in March this year to protect Eddie Obeid's son, Paul Obeid.

ICAC is currently probing former Labor minister Ian Macdonald's 2008 decision to grant coal exploration licences in the area and how Eddie Obeid gained from it.

Mr Kaidbay said that at the private ICAC hearing he did not tell the truth about who paid for a lawyer to represent Gardner Brook, a former Lehman Brothers vice president, who also gave evidence to ICAC in private earlier in 2012.

Mr Kaidbay told the private hearing he received $22,000 cash from a friend to pay Mr Brook's legal fees, the inquiry heard.

Giving evidence, Mr Kaidbay said he made up that story to protect Paul Obeid.

'Name the person you were trying to protect,' counsel assisting the Commissioner, Geoffrey Watson, asked the witness.

'Paul,' Mr Kaidbay replied.

'Paul who?' Mr Watson then asked.

'Obeid,' Mr Kaidbay said.

Mr Kaidbay said before the private hearing Paul Obeid gave him a document that was subsequently shown to Mr Brook to 'help him with his recollection'.

It also heard that Mr Kaidbay was a key figure in a sham correspondence between two Obeid entities, United Pastoral Group (UPG) and Lockaway, aimed at manipulating the value of a Bylong Valley farm before it was sold to a mining company.

Asked by Commissioner David Ipp whether the exchange of letters was fake, Mr Kaidbay said: 'It wasn't genuine'.

Mr Kaidbay, who was the director of UPG, said the company had no assets and no bank account, and that he had no experience in coal mining in 2008.

He said had since 'bought a book' and now knew 'quite a bit'.

The inquiry also heard Mr Kaidbay admitted in private to ICAC that he had 'been used as a human face to disguise the financial interests of the Obeids'.

In contrast, he told the inquiry the Obeids' interests were kept hidden to protect their privacy and because their name could scare off potential investors.

Mr Kaidbay also said he had seen Eddie Obeid and Mr Macdonald together at a coffee shop near the Obeids' offices at Birkenhead Point, in Sydney.

The inquiry was also shown an email that Mr Watson suggested indicated the Obeids had moved to sell their stake in the Yarrawah coal tenement in the Bylong Valley for $40 million.

Earlier on Wednesday, ICAC heard another of Eddie Obeid's sons, Moses Obeid, had pushed to sell the property in the Bylong Valley for 15 times what it was worth.

Robert Stitt, counsel for investment adviser Richard Poole, put it to Mr Brook, the former Lehman Brothers vice president, that Moses Obeid made the comment at a meeting involving his client in 2009.

'There was a discussion about the multiple and Moses Obeid started off asking for 15 times the value of the land, did he not?' Mr Stitt asked.

Mr Brook said he could not recall Moses Obeid making such a statement.

Mr Poole was one of the original seven investors in Cascade Coal, which was ultimately the successful bidder in June 2009 for the critical Mount Penny tenement.

Cascade at a later date paid $30 million to the Obeids, the ICAC has been told.

The inquiry continues on Thursday.

Sky News: Friend lied to ICAC to protect Obeid

Wednesday November 28, 2012

 

Opposition Leader Tony Abbott has broken his question time drought with a query on foreign affairs.

Mr Abbott on Wednesday asked Prime Minister Julia Gillard about Australia's decision to abstain from a vote in the UN general assembly on a resolution to give Palestine observer status there.

Ms Gillard seized the opportunity to point out she had been asked 18 questions by Deputy Opposition Leader Julie Bishop, who is foreign affairs spokeswoman, regarding her past work as a lawyer.

'This is the first question on foreign affairs and where's the deputy leader of the opposition to be seen?' the prime minister asked parliament.

'Well, nowhere, like she's been seen nowhere today.'

Ms Bishop was now 'an embarrassment', Ms Gillard said.

'The deputy leader of the opposition is now an embarrassment to the leader of the opposition and the opposition generally,' she said.

Ms Bishop resumed her grilling of Ms Gillard over her actions as a young lawyer in the 1990s, asking what advice she had given to her boyfriend at the time, Bruce Wilson, regarding control of a union fatal accident and death fund.

Ms Gillard said she had dealt with the issue previously and launched a counterattack on Ms Bishop.

'Really, I think the issue today is ... at what point will she apologise for making an absurd allegation against me yesterday, then denying the making of it, and then being forced into a humiliating retreat,' she said.

Ms Bishop on Tuesday told reporters she had one conversation with former Australian Workers' Union bagman Ralph Blewitt, a colleague of Mr Wilson's in the 1990s, at a cafe in Melbourne last Friday.

On Wednesday, in response to media reports she had spoken to Mr Blewitt two days earlier, Ms Bishop said she spoke to an unknown man last Wednesday after former Sydney radio host Mike Smith had telephoned her to tell her he was at dinner with someone who wanted to talk to her.

'When will the deputy leader apologise to the press gallery for having misled them yesterday about her degree of contact with Mr Blewitt?' Ms Gillard said.

'And when will the leader of the opposition, who is responsible for this campaign of sleaze and smear, acknowledge it for exactly what it has been?'

Ms Bishop continued questioning Ms Gillard about the past, while the prime minister repeatedly accused Mr Abbott of hiding behind his deputy.

Ms Gillard said she had repeatedly dealt with the accusations in great detail.

'Please stop embarrassing yourself, it is just getting too painful to watch,' Ms Gillard said.

She challenged Mr Abbott to get up and ask the questions himself.

She was twice told to sit down by Speaker Anna Burke for not keeping to the point.

Ms Gillard said Ms Bishop had run out of questions on the AWU slush fund.

'She is at the bottom of the mud bucket now.'

Climate Change Minister Greg Combet said the government would not be lectured on ethics and morality by Ms Bishop, who previously worked as a lawyer for CSR opposing compensation claims for victims dying of asbestos diseases.

Mr Combet said labour law firms such as Ms Gillard's former firm Slater Gordon had worked very hard to fight for asbestos victims.

So too did the union movement, getting no help from former Liberal governments.

'On the other side of the chamber, the deputy opposition leader ... acted for a company against victims, to oppose their compensation,' Mr Combet told the house.

'She acted for a company that had this to say in 1977: Even if the workers die like flies, even if the workers die like flies, they will never be able to pin it on CSR' - that's who you (Ms Bishop) acted for.'

Ms Bishop said she was at university in 1977. But Mr Combet was undeterred.

'There has been a lot said about morality and the conduct of lawyers acting on behalf of their clients, where is the morality in that, to represent a company with that sort of view,' he said.

He said the Labor government had a proud record of cleaning up asbestos and fighting on behalf of victims.

'We will not be lectured to, not be lectured to, by the deputy leader of the opposition leader about ethics or morality. Or you (Tony Abbott), hiding behind her.'

Sky News: Bishop an 'embarrassment' to Abbott-PM

BY MALCOLM FARR, NATIONAL POLITICAL EDITOR

From: news.com.au November 28, 2012 8:42AM

Deputy opposition leader Julie Bishop defended meeting with self-confessed fraudster Ralph Blewitt. Picture: File Source: AAP

The Government is demanding the sacking of Deputy Liberal Leader Julie Bishop over a telephone conversation she had with former "bagman" Ralph Blewitt.

And the Opposition will accuse Prime Minister Julia Gillard of having lost the trust of her own troops after her back down on a UN vote on Palestine.

The Government today will attempt to put on a positive policy front with important legislation on school funding reform and constitutional recognition of indigenous people.

The Aboriginal and Torres Strait Islander Peoples Recognition Bill will start alerting voters to the bipartisan push for recognition in a referendum.

But the savage exchange of accusations over credibility and integrity will ensure the Parliament ends the year on a decidedly partisan tone.

Ms Bishop, chief prosecutor of the Prime Minister over her "slush fund" role as a lawyer 17 years ago, yesterday did not mention the phone call when asked of her contacts with Mr Blewitt, a former Australian Workers' Union official Ms Gillard gave legal advice to in the '90s.

She said she had spoken to Mr Blewitt once, in person, for 10 minutes last Friday. However, the Government is claiming Ms Bishop also had the telephone conversation last Wednesday while she was in Perth.

"If true, she has out and out lied," said a Government source today.

Opposition sources today did not deny the telephone call but said while Ms Bishop had spoken to Mr Blewitt for 10 minutes, Ms Gillard had been his "close associate" for four years.

Mr Bishop today denied telephoning Mr Blewitt but could not reject Labor claims she did speak to him when a third person called.

Ms Bishop said she had never telephoned Mr Blewitt and he had never telephoned her. But she left open the possibility she might have spoken to him when a third person called her.

"Earlier last week (former shock jock) Michael Smith called me while I was driving in Perth and said he was at dinner with someone who wanted to speak to me," said Ms Bishop in a statement.

"That person did not identify themselves and said he was pleased that the AWU fraud was being raised in Parliament. I said that would continue to be the case and my mobile phone dropped out at that point.

"Michael Smith did not call back and I do not know to whom I spoke."

She said that in contrast, Ms Gillard counted Mr Blewitt "among her best friends during the time when a massive fraud was being perpetrated against the AWU".

"The Prime Minister should also answer the question as to whether there has been any contact from any member of her government with (Ms Gillard's former boyfriend) Bruce Wilson," she added.

"I encourage all unionists with knowledge about corruption to contact the police and I am also happy to take their calls."

Mr Blewitt has confirmed he was the person Ms Bishop spoke to, telling the Nine network the call was made last Thursday.

The Opposition will today focus on Julia Gillard's back down, as revealed by news.com.au yesterday, over a vote to elevate the status of Palestine in the United Nations, seen as a move towards statehood.

Ms Gillard wanted Australia to side with Israel and the United States and vote against the move, but after a series of passionate debates in cabinet and outside she was convinced to back an abstention instead.

A senior Opposition source today said that not only had Ms Gillard been rolled but "her ministers are lining up to leak about it".

"It shows that Julia Gillard lacks authority as well as being untrustworthy," said the source.

Labor sources have denied Ms Gillard's leadership was at stake hut have confirmed she was forced to change her stance.

In Parliament today the Prime Minister and Schools Minister Peter Garrett will introduce legislation to reform funding for schools.

Influential independent Tony Windsor today urged bipartisan support for the legislation which he said could end 40 years of division on private and public school funding.

"This is the first piece of policy that I've seen that tends to take away that division," Mr Windsor told ABC radio.

Indigenous minister Jenny Macklin is handling the constitutional recognition legislation which is aimed at getting parliamentary support for and commitment to the issue.

The Government has also moved to establish a Joint Select Committee to progress Indigenous constitutional recognition and report back early next year.

The Government expects Parliament to back the Act of Recognition legislation soon after that report.

Government demands sacking of Deputy Liberal Leader Julie Bishop | News.com.au

By online political correspondent Simon Cullen

Video: Brandis uses privilege to suggest Gillard broke law (ABC News)

Related Story: Labor MP sorry for 'narcissistic bimbo' gibe

Related Story: Bishop won't rule out conversation with Blewitt

The Coalition has stepped up its attack on the Prime Minister, with Liberal senator George Brandis using parliamentary privilege to suggest Julia Gillard broke criminal laws while working as a lawyer in the early 1990s.

Ms Gillard has consistently denied any wrongdoing in relation to her role in providing legal advice to establish the Australian Workers Union (AWU) Workplace Reform Association while working at Slater & Gordon.

She has said she believed the association's funds would be used for legitimate purposes.

They were instead used by her then-boyfriend and former AWU official Bruce Wilson as a union slush fund, although he denies financially benefiting from it.

Speaking in the Senate, the shadow attorney-general said it was clear Ms Gillard knew the association's funds would not be used for their stated purpose, which was for the advancement of workers' rights.

Instead, Senator Brandis said she knew the funds would be used for the "private purposes" of Mr Wilson and fellow union official Ralph Blewitt.

"There is no doubt - no doubt whatsoever - that at the time she was involved in setting up the slush fund, Ms Gillard knew what its purpose was," he told the Senate.

"Indeed, the choice of an incorporated association as the entity to hold the funds for union election purposes was Ms Gillard's brainchild.

"It is already clear, that from (the association's) inception, Ms Julia Gillard's involvement in this matter has been characterised by concealment, deception, professional misconduct, and it would appear several breaches of the criminal law."

Grilling

Video: Goals and outrage show parliament's extremes (7.30)

The Coalition has used the final parliamentary sitting week of the year to continue its pursuit of the matter, directing all but one question during the past three Question Times to the Prime Minister.

Deputy Liberal leader Julie Bishop again took the lead, quizzing Ms Gillard over claims $5,000 was deposited into her bank account and also about issues surrounding an AWU fatal accident or death fund.

The Prime Minister fired back, taunting Ms Bishop over her level of contact with the self-confessed fraudster Mr Blewitt last week.

"I am amazed to get this question from the Deputy Leader of the Opposition who is unable to remember who she spoke to a week ago, and she is asking me to deal with events 20 years ago," Ms Gillard said.

Labor has accused Ms Bishop of lying about how many times she had spoken with Mr Blewitt and has called for her resignation.

Ms Bishop yesterday told reporters she had only spoken with Mr Blewitt once, but today has not ruled out the possibility that she had also spoken with him by phone.

In a statement, Ms Bishop said she was speaking on the phone to former radio broadcaster Michael Smith, when he handed the phone over to someone who did not identify himself.

Ms Gillard ridiculed that explanation.

"What is the Deputy Leader of the Opposition's version of these events?

"That Michael Smith rang her up and she had no idea who the phone was going to be handed over to?

"Who was she expecting? Humphrey B Bear? Oh no, he can't talk.

"Who on Earth was she expecting on the phone? And why didn't she tell the truth about it yesterday?"

Lack of standards

Video: PM fends off continued Opposition attack (ABC News)

At one point during today's fiery Question Time, an exasperated Speaker Anna Burke admonished MPs for their lack of standards.

"This is not amusing, it really isn't. It's absolutely disgraceful that you will treat your Parliament with such contempt," she said.

This morning, Labor backbencher Steve Gibbons was forced to apologise for calling Ms Bishop a "narcissistic bimbo".

"Libs are led by a gutless douchebag and a narcissistic bimbo who aren't fit to be MPs let alone PM and Deputy. Both should be sacked," he tweeted.

His remark drew a fiery response from members of the Coalition who demanded Ms Gillard take action.

Nearly two hours after posting the original comment, Mr Gibbons tweeted: "To all of those offended by my Tweet posts this morning - I unreservedly apologise."

It is not the first time Mr Gibbons has sparked controversy over his use of language on Twitter.

In February, he described Kevin Rudd as a "psychopath with a giant ego" for wanting to challenge for the leadership after being "comprehensively rejected" by his caucus colleagues.

The final Question Time of the year will be held tomorrow

Brandis uses privilege to suggest Gillard broke law - ABC News (Australian Broadcasting Corporation)

Tuesday November 27, 2012

 

The Labor backbench has forced Prime Minister Julia Gillard to abandon her plan to vote against a controversial Palestinian bid for upgraded United Nations status.

Australia will instead abstain from voting on the Palestinian resolution when it comes before the UN general assembly on Thursday, in a rare break from Israel and the United States.

The resolution is set to pass with the support of a large majority of the UN's 193 member states and will elevate Palestine's status to that of a non-member observer state.

Ms Gillard wanted to vote against the resolution but Foreign Minister Bob Carr led a cabinet push for an abstention. It is believed Ms Gillard overruled her cabinet colleagues on Monday but changed her position shortly before a Labor caucus meeting on Tuesday.

She told her colleagues she would support the abstention despite her personal reservations, heading off a looming backbench revolt over the vexed issue.

Ms Gillard later issued a statement saying the decision balanced the government's long-standing support for a Palestinian state with its belief that peace would only come through direct negotiations between Israel and the Palestinians.

Senator Carr confirmed he had advocated for an abstention but denied Ms Gillard was rolled by the party room.

'She most certainly wasn't. She shaped that decision in the parliament today,' he told Sky News.

Ms Gillard had approached the discussions with an open mind and had showed smart leadership with her decision, he said.

Senator Carr admitted the Palestinian resolution posed risks - like potential Israeli retaliation - but said on balance it was a step in the right direction.

A yes vote would have been 'a little incautious', he said.

The UN resolution will give Palestine the same international standing as the Vatican.

It comes a year after Mahmoud Abbas' failed push to achieve full UN membership and follows weeks of renewed, deadly tension between Israel and Hamas militants in the Gaza Strip.

Australia's decision is likely to anger Israel which hoped it could count on the Gillard government's support.

The Israeli embassy in Canberra has so far declined to publicly comment on the decision.

The head of the Palestinian delegation to Australia, Izzat Abdulhadi, said the government's decision was an important moment in Australian foreign policy.

'We hope Australia will continue this process to become more balanced and even-handed, and become more independent of the positions of the United States,' he told AAP.

Opposition foreign affairs spokeswoman Julie Bishop said she was disappointed by the decision, and that the resolution was more likely to prolong the Middle East conflict than help end it.

'The coalition believes Australia should vote against this bid as we do not believe that this is the path to peace and reconciliation between the Israeli and Palestinian peoples,' she said in a statement.

But Greens Leader Christine Milne said the government should go a step further and support the resolution. Palestinian delegation to Australia.

Sky News: PM compromises on Palestine vote

Prime Minister Julia Gillard's former partner Bruce Wilson claims his union sidekick Ralph Blewitt buried in his backyard money held by a legal entity they set up together.

• Blewitt calls on Wilson to release files

• Bishop backtracks on Gillard allegation

• Gillard says claims boil down to nothing

• Gillard seeks end to AWU questions

• Gillard lashes out at opposition 'smear'

In a bizarre twist to the saga surrounding the Australian Workers' Union Workplace Reform Association, Mr Wilson denied he had acted fraudulently in regard to the entity established in 1992.

He admitted seeking legal advice from Ms Gillard, who he said advised the pair on how to register the association after he encountered "technical problems" during his own attempts.

Mr Wilson said he did not benefit financially from funds given by employers to the association, but agreed some funds were used to buy a house in Melbourne's Fitzroy that was subsequently registered in Mr Blewitt's name.

Asked who had later arranged the sale of the property, Mr Wilson said he didn't know.

Told Mr Blewitt had said he did not see any money from the sale of the house, Mr Wilson said: "That as I understand it is not true".

Asked where the money from the house sale and the association account had gone, Mr Wilson said some was sent back to the employers.

"The slush fund, as I said, in the same way I treated the house, I walked, I had nothing further to do with it," he told ABC television's 7.30 program.

Mr Wilson said Mr Blewitt had told him he had taken a series of deposits out of the association account and invested it in a fund.

"I subsequently found out that in fact Ralph had been accumulating the money at his place," he said.

"He had been, and I know this sounds crazy, but he had been packaging it up and burying it in his backyard of all things.

"How do I know that? He confessed at some stage and he also showed me a package of money that he ... had been destroyed.

"Obviously it had been in his garden or some such thing and it got moist and destroyed the money."

Mr Wilson also said he felt sorry Ms Gillard was being constantly questioned about the association because it was not warranted.

"For example bringing Ralph to Australia and getting him to go to the police is nothing more than keeping it in the news and that is what it's all about," he said.

He repeated Ms Gillard, who was working at law firm Slater & Gordon at the time, had advised him how to fill out forms to register the association in 1992.

During a 1995 interview with some of the firm's partners Ms Gillard referred to the association as a "slush fund" for the re-election of union officials.

Mr Wilson said he was not sure if he had ever used those words.

He said Ms Gillard had not received any association money to pay for renovations she was doing on her house at the time.

But Mr Wilson said he could not rule out fellow unionist Wayne Hem's claim that he had handed him a $5000 cheque to put in Ms Gillard's personal bank account.

"I don't argue with that but I just don't recall it," Mr Wilson said.

Ms Gillard has said she doesn't recall the deposit and her bank can't help because its records don't go that far back.

Mr Wilson also said the association money used to purchase the Kerr street property was raised outside the AWU union body.

Mr Blewitt had put his hand up to have the house put in his name and Ms Gillard had attended the auction, and signed a power of attorney beforehand, he added.

"We probably went together as people in a relationship do," Mr Wilson said.

Mr Blewitt insists Ms Gillard still has a lot of questions to answer.

He told Sky's Showdown program he didn't ever get money for himself and had no idea where the funds went.

He said he would take it out of the slush fund at Mr Wilson's request and deliver it to him at Ms Gillard's Melbourne home.

"I just went along for the ride and did as I was instructed by Mr Wilson," Mr Blewitt told Sky.

Asked if he knew if it was used for Ms Gillard's home renovations, Mr Wilson said: "At this point in time, no comment."

He said he had given a full and frank statement to police and did not want to impede their investigation by disclosing the information.

Blewitt buried association cash: Wilson

By chief political correspondent Simon Cullen

Photo: Christopher Pyne with the Coalition's Gillard-AWU file. (AAP: Alan Porritt)

Video: Opposition renews attack on Gillard during Question Time (7pm TV News ACT)

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Labor says Julie Bishop's position as Deputy Liberal Leader is untenable after she suggested Prime Minister Julia Gillard directly benefited from a union slush fund.

While working as a lawyer at Slater & Gordon, Ms Gillard provided legal advice for the establishment of the Australian Workers Union (AWU) Workplace Reform Association, saying that she believed it would be used for legitimate purposes.

Instead, the association was used as a slush fund by her then boyfriend, former AWU official Bruce Wilson.

Ms Bishop, who has been running the Coalition's pursuit of the issue, dramatically escalated her attack on the Prime Minister this morning by suggesting, for the first time, that Ms Gillard benefited from siphoned-off funds.

"The reason she didn't open a file within Slater & Gordon - a file that would have shown a new legal entity was set up - was because she and Wilson and Blewitt wanted to hide from the AWU the fact that an unauthorised entity was being set up to siphon funds through it for their benefit and not for the benefit of the AWU," she told reporters.

Labor frontbencher Anthony Albanese has jumped on the comment, accusing Ms Bishop of making a "very serious" allegation of criminal activity against the Prime Minister.

"You can't just make claims like that in politics without being prepared to back it up," he told reporters in Canberra this afternoon.

"And there are consequences for Ms Bishop's political situation if it is not backed up."

Video: Julie Bishop rejects suggestions she directly accused the PM of benefiting from the fund (AAP: Alan Porritt) (ABC News)

Mr Albanese said Opposition Leader Tony Abbott needed to declare whether he supported Ms Bishop's comment, or he should sack her.

"Tony Abbott can't hide behind silence, and he has to state whether he is 100 per cent behind the actions of his deputy leader or dismiss his deputy leader," he said.

Ms Bishop held a press conference late this afternoon where she rejected suggestions she had directly accused Ms Gillard of benefiting from the fund.

She said her previous comment about "their benefit" referred only to the two members of the association - Mr Wilson and Mr Blewitt - and not Ms Gillard.

Asked then if she was saying Ms Gillard was a knowing party to a fraud, Ms Bishop responded: "I still have questions to ask of the Prime Minister, and I'll certainly continue them.

"But she was certainly a knowing party to breaches of relevant laws in Western Australia.

"I said that yesterday, and I'll say it again today - the Incorporations Act in Western Australia was breached in a number of material respects."

Ms Gillard has consistently denied any wrongdoing in the matter, saying she provided the legal advice at the request of her clients and has rejected suggestions she knowingly benefited from any of the association's funds.

'Godwin Grech moment'

Video: Anthony Albanese calls for Julie Bishop to be sacked (ABC News)

For a second consecutive day, the Coalition has used Question Time to pursue the Prime Minister over the issue, quizzing her over who paid for renovations to her Melbourne home.

Ms Bishop wanted to know whether any funds from a $15,000 cheque signed by Mr Wilson in 1995, a portion of which was to go to a Melbourne builder, were used to pay for work on her house.

Ms Gillard responded: "I can guarantee that what the Deputy Leader of the Opposition refers to was not to my benefit and did not pay for renovations at my home.

"I have answered this clearly and publicly on the public record now since 1995.

"I paid for the renovations at my home. This is smear, pure and simple."

The Prime Minister then went on the attack, questioning why Ms Bishop held a meeting with self-confessed bagman Ralph Blewitt in Melbourne last week.

"The Deputy Leader of the Opposition has spent time with a man who has said he believes he is guilty of fraud and is looking for immunity from that fraud," she told Parliament.

The Prime Minister has described the meeting as Ms Bishop's "Godwin Grech moment", referring to a former Treasury official whose actions helped undermine Malcolm Turnbull's leadership of the Liberal Party.

Ms Bishop this morning said she met Mr Blewitt as part of her search for documents relating to Ms Gillard's work history, but it only lasted 10 minutes and did not result in any documents.

Ms Bishop again asked every question on behalf of the Opposition during Question Time, prompting the Prime Minister to taunt Mr Abbott about his silence.

"If the Opposition genuinely thought there was anything serious at the base of this, then why wouldn't the Leader of the Opposition have the guts to get up and do it himself?" she told Parliament.

 

Labor attacks Bishop over Gillard slush fund claim - ABC News (Australian Broadcasting Corporation)

Gemma Jones From: The Daily Telegraph

November 27, 2012 12:00AM

She can't recall ... Prime Minister Julia Gillard during an extended press conference in Parliament House in Canberra / Pic: Gary Ramage Source: The Daily Telegraph

Ralph Blewitt revisits the house once shared by himself, Julia Gillard and Bruce Wilson / Pic: David Caird Source: The Daily Telegraph

PRIME Minister Julia Gillard was yesterday unable to categorically deny receiving $5000 from a former boyfriend at the centre of the Australian Workers Union slush fund affair.

With the 20-year-old affair threatening to overshadow the work of government, a fiery Ms Gillard addressed questions about the fund and her relationship with the disgraced Bruce Wilson.

The PM revealed she had consulted the Commonwealth Bank and had hoped to release her account transaction record but the bank only kept them for seven years.

Former AWU official Wayne Hem signed a statutory declaration claiming that Mr Wilson, after a night at a casino, asked him to put the money in Ms Gillard's bank account in mid-1995.

Mr Hem said in 1996 he told Ian Cambridge, then AWU secretary and now a Fair Work Australia Commissioner, of the alleged transaction.

When asked about Mr Hem's claim, Mr Wilson said at the weekend: "It's possible, but I don't specifically recall."

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At the time Mr Hem said he made the deposit on behalf of Mr Wilson. Ms Gillard was a Slater & Gordon partner and would have been earning about $80,000 a year.

While she said yesterday she did not recall the money being put in her account, she said that, even if Mr Wilson had given her $5000 - which today would be worth more than $8100 - it would not be wrong. She also dismissed stories about the AWU affair, claiming Australians "don't understand" them. Ms Gillard said: "On the day that claim came out publicly I referred to it as smear because it is a matter associated with my personal life.

"Whilst I'm going to answer your question, I just ask you for one moment to assume that that is true, that $5000 was put in my bank account by a person I was then in a relationship with, who the witness involved said had had a big night out at the casino. Can you piece together for me the personal wrongdoing involved in that? I doubt you can.

"On the actual assertion, I do not to the best of my knowledge, remember $5000 being put in my account."

Ms Gillard said she typically was surprised by how little money she had when she used an ATM "rather than happily surprised that there is extra".

"I do not have a memory of this money going into my account. However, it is a long time ago. So I have taken steps to try and check," she said of her approach to the Commonwealth Bank.

She described the financial relationship between herself and Mr Wilson as "garden variety" for a couple and there was not "lots of money around or lots of benefits I somehow couldn't explain."

"Nothing happened in the course of my relationship with Mr Wilson about who paid for what that you would say was in any way unusual for people in a relationship. We'd go for dinner, sometimes he'd pay, sometimes I'd pay, sometimes we'd split the bill," she said.

Ms Gillard said she ended the relationship with Mr Wilson when she heard rumours of problems within the union.

She faced questions about why she hadn't alerted the AWU around the same time of the slush fund for which she had provided legal advice for its incorporation but said she had no knowledge of its accounts or how it was used.

"You can't report things you do not know. I did not know about transactions on the accounts of the AWU workplace relations association," she said.

In parliament, Deputy Opposition Leader Julie Bishop used Question Time to focus on whether Ms Gillard had satisfied herself the establishment of the association did not breach AWU internal rules.

Ms Gillard repeated that her role was to provide legal advice to the two officials seeking to register their association, which was to be used for union election campaigning, and she had no dealings with the broader union executive.

Earlier, Ms Gillard had said she was aware of rumours - which she vigorously denied - that she received money from the union for home renovations. Ms Gillard told Slater & Gordon in an interview in September 1995 she had paid the builder $2000 and was "making arrangements to get $1780 ... to pay the rest". The transcript shows she was financially strained at the time with a mortgage and a personal loan - and had taken an advance on her salary.

The fiery PM and that $5000 question | thetelegraph.com.au

Sky News23 November 2012

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Coalition Leader Tony Abbott wants the PM to be 'open' about her role in establishing a union slush fund

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A FORMER law-firm colleague of Prime Minister Julia Gillard says her version of the AWU mortgage scandal just doesn't stack up.

PRIME minister Julia Gillard told a press conference today the latest claims were part of an ongoing smear campaign.

"What this boils down to is 17 years ago I couldn't recall events that happened 2 and a half years earlier.

"And let's be very clear, the matter I couldn't recall related to Slater and Gordon issuing a mortgage not a matter associated with any union fund or account.

"There would be plenty of people who would say looking back over two year it's a bit hard to recall every bit of paper that comes across your desk."

"What is means is this whole campaign of smear actually boils down to absolutely nothing."

Ralph Blewitt has spoken with officers at Victoria Police headquarters on Flinders St. Picture: Nicole Garmston

"Let's also be clear, this wasn't a file I ran, I was not the partner in charge of it, I was not the solicitor operating it so I don't think it's remarkable in any way that I wouldn't have full recall of documents that on a file that I didn't run as a solicitor," Ms Gillard said.

"In law firms documents get handled by paralegals and they get handled way back when in those days by mail rooms and the like."

RALPH BLEWITT

He is the former Vietnam Veteran whose testimony to Victorian police threatens to blow open the Australian Workers Union scandal - again. A former official with the Timber workers Union, the 66-year-old Mr Blewitt says he is motivated to speak out after being contacted by Harry Nowicki, a one-time Melbourne lawyer, and Michael Smith, the former Sydney radio broadcaster who lost his job over the AWU scandal. A self-confessed “bagman” for the AWU, Mr Blewitt played the role of loyal deputy to Wilson as the two men ran amok during the early-to-mid 1990s. Mr Blewitt’s claims will be seized upon by the Opposition as they seek to hammer the Prime Minister in the last week of parliamentary sittings for 2012.

JULIA GILLARD

According to the Prime Minister, she was a “young and naive” lawyer in her early-30s when she fell in love with Bruce Wilson. Ms Gillard at the time was a salaried partner at Slater & Gordon and began a romance with the then union official after travelling to West Australia to provide legal advice to the AWU. Ms Gillard left the legal firm in late 1995 after management conducted a secret internal inquiry into matters related to the AWU. Soon after, Victorian Liberal minister Phil Gude raised the allegations for the first time in the Victorian Parliament, reportedly after receiving a file of material from two men - one a union official, the other a Labor MP. In August, the Prime Minister held a marathon press conference in Canberra to deal with a raft of allegations that have dogged her for 17 years.

IAN CAMBRIDGE

A one-time joint national secretary of the Australian Workers Union, Ian Cambridge is now a commissioner with Fair Work Australia. Mr Cambridge spearheaded the initial investigation into the AWU scandal, attempting to find out the whereabouts of hundreds of thousands of dollars that were unaccounted for. In a lengthy 1996 affidavit, Mr Cambridge documented for the first time how a series of bank accounts were established with proceeds distributed largely through a series of cash withdrawals. He also documented the role of Slater & Gordon as legal adviser to the AWU officials and was critical of the firm's role in a property transaction, involving the Kerr St Fitzroy property purchased for $230,000 in early 1993.

BRUCE WILSON

He was once a feared warrior with the Australian Workers Union who was touted as a future Prime Minister. But these days, Bruce Morton Wilson lives a quiet life on the mid north coast of NSW, working as a part-time chef at a small club bistro. Mr Wilson has refused to discuss his role in what may be one of the nation's largest union rorts, involving the alleged misappropriation of up to $1 million in funds from the AWU over a four year period from 1991 to 1995. The former AWU State Secretary in West Australia and then Victoria, Mr Wilson was the spearhead behind a series of accounts and entities that were established without the knowledge of other union officials. But his testimony - if he was ever forced to give evidence - would be explosive.

BOB SMITH

For the past 17 years, Bob Smith has maintained a steely silence on what he knows about the AWU scandal. The former President of the Victorian Legislative Council was perhaps the first union official to discover that something was astray. In mid-1995, the then Victorian State Secretary uncovered a number of unauthorised bank accounts linked to AWU entities. He set about trying to uncover how Mr Wilson, in particular, had established these funds in secrecy.

Ms Gillard was at Werribee today to launch Wyndham Healthy Communities at Wyndham City Council, said there had not been one substantiated allegation of wrong doing in the past 20 years.

PM's slush fund discrepancy

PM's discrepancy Watch

A lawyer who worked with Prime Minister Gillard says there is a discrepancy in her explanation of a loan. Courtesy 7:30 Report

"If you look at all the documents what they show ... there is a question about a certificate of insurance, the conveyancing file shows that Mr Blewitt personally followed that matter up."

"Let's also be clear, this wasn't a file I ran, I was not the partner in charge of it, I was not the solicitor operating it so I don't think it's remarkable in any way that I wouldn't have full recall of documents that on a file that I didn't run as a solicitor," Ms Gillard said.

"In law firms documents get handled by paralegals and they get handled way back when in those days by mail rooms and the like."

Ms Gillard was at Werribee today to launch Wyndham Healthy Communities at Wyndham City Council, said there had not been one substantiated allegation of wrong doing in the past 20 years.

"If you look at all the documents what they show ... there is a question about a certificate of insurance, the conveyancing file shows that Mr Blewitt personally followed that matter up."

Ralph Blewitt

Former AWU official Ralph Blewitt arriving at Victoria Police headquarters. Picture: David Caird Source: Herald Sun

Bagman speaks to police

Earlier today, a former Australian Workers Union official will this morning tell Victorian Police what he knew about the union scandal in a key development that may shed light on the 17-year-old fraud.

Ralph Blewitt, a self-confessed bagman, and one-time State Secretary, has left police headquarters in Melbourne after  meeting with Victorian fraud squad detectives and delivering a 10-page statement outlining his recollection of key events.

Mr Blewitt, who flew in from Malaysia earlier this week, plans to tell police about the formation of the AWU Workplace Reform Association, the “slush” fund used to channel around $400,000 in misappropriated monies.

He is also expected to speak about the purchase of a $230,000 inner-Melbourne property in 1993 – which is now the subject of fresh questions involving the Prime Minister Julia Gillard.
The evidence from Mr Blewitt will help police decide whether to re-open the investigation into how up to $1 million in AWU funds were misappropriated between 1991 and 1995.

Bruce Wilson, who was in a relationship with Ms Gillard for much of this time, was the mastermind behind the formation of several accounts and entities that were kept secret from other AWU officials.

Mr Blewitt’s decision to break his silence on the union scandal comes as the Prime Minister is under pressure to explain an apparent discrepancy over her recollection of a $150,000 mortgage used to help purchase a property in Fitzroy, inner-Melbourne.

Nick Styant-Browne, a former equity partner with Slater & Gordon, has challenged the Prime Minister over comments she made during an 1995 interview with senior partners of the law firm.

According to Mr Styant-Browne, Ms Gillard "claimed in the interview in 1995 that the first she heard about the Slater and Gordon loan for the acquisition of the Kerr Street property was in about August of (1995)".

But he said documents showed there was "no doubt that Ms Gillard knew about the mortgage from Slater and Gordon in March of 1993 (and) was specifically involved in taking steps to facilitate that mortgage".

"That is a matter of documents, it's not a matter of assertion and hearsay," he said.

PM hits back at AWU scandal 'smear campaign' | News.com.au

Peter Hartcher Sydney Morning Herald political and international editor

The story that won't go away will dog the PM for the four remaining parliamentary sitting days of 2012 - and beyond.

'No substantiated allegation of wrongdoing': Gillard

The Prime Minister denies any past connection with an AWU slush fund, as disgraced former union boss Ralph Blewitt makes a sworn statement to Victoria Police fraud squad.

The Gillard government might have been rounding out a year of achievement with the Abbott opposition in retreat, but instead goes into the last week of Parliament facing its greatest crisis.

Its asylum seeker policy is in disarray, but that is not an existential threat to the government. The grave and immediate danger to Labor's hold on power is the fast-building crisis over the Prime Minister's connections to a major union fraud case from 1991 to 1995.

The government's success this week in winning support for a plan to save the Murray-Darling river system is a signal moment for Australia, but it was given scant chance to celebrate.

Illustration: Rocco Fazzari

The waters of the Murray-Darling supply the farms that grow 40 per cent of Australia's food yet the river has been slowly dying during a century of paralysing political argument.

The dispute between the states over their conflicting claims on the river system were first put on the federation agenda before Australia existed as a political entity.

The argument that started in 1897 was finally overcome by the federal Environment Minister, Tony Burke, on Thursday in an impressive piece of political management and environmental redemption. Parochialism lives, of course, and the states are not all happy.

But the main elements of Burke's plan seem set to survive the states' objections and are now law. The plan, at a cost of $11 billion to taxpayers, will return at least 2750 billion litres of surface water to the river by 2019 to restore some of its health. It could be as much as 3200 billion litres depending on smarter water use.

"Today, under the Gillard government, Australia - a century late, but hopefully just in time - has its first Murray-Darling Basin Plan," Burke declared.

The Greens, arguing that the river needs yet more water for full restoration, are threatening to move a disallowance motion in the Parliament to kill the plan.

But Burke says that practical constraints - bridges, roads, land titles - limit the amount that the river can reasonably absorb. And the Greens are irrelevant so long as the opposition and government concur. And it appears they do.

But at Burke's appearance at the National Press Club to announce the deal, he had to answer questions about two scandals with which he has no personal involvement.

He was asked about the ICAC inquiry into corruption in the former Labor government of NSW, and Julia Gillard's connections to fraud at the Australian Workers Union in the early 1990s. The questions were not relevant but not unreasonable, and they hint at the difficulty the government will face trying to tell its story as the political system turns its attention more fully to the AWU scandal.

Burke might get a chance to add another environmental accomplishment next week, with an apparent agreement to end the long-running argument over Tasmania's forests.

The loggers, the conservationists and the Tasmanian government seem ready to travel to Canberra to sign an agreement that achieves Burke's demands - balancing preservation of half a million hectares of the island's magnificent native forests with the existence of a viable logging industry.

"This is a historic moment," said Tasmania's Premier, Lara Giddings, on Thursday. "After 30 years of division, we have the opportunity to work together towards a common goal."

If the deal can survive Tasmania's Parliament it will go to Burke for his signature, but, even if it does, news of this achievement is likely to be overwhelmed by the political contest in the House.

The AWU affair is now politically unmanageable for Gillard because there is no single point of origin. After a slow, early trickle the flow of new material is now spilling out from multiple sources and is being reported in all mainstream media.

Police forces in two states, Western Australia and Victoria, are considering reopening investigations into the fraud carried out by Gillard's then boyfriend, Bruce Wilson, when he was the secretary of the Victorian branch of the Australian Workers Union, as the new material accumulates.

A prime minister's office can be an intimidating edifice, and Gillard has relied on it in her approach of trying to tough out the scandal and limit media coverage.

She called a press conference to address the matter in August and declared the case closed and all questions answered. She has denied any wrongdoing and demanded that her accusers state any allegation against her, an invitation to commit defamation and risk the consequences.

But the opposition, while it's been slow to take up the matter, is now determined to use the four remaining parliamentary sitting days of 2012 to mount a concentrated challenge to Gillard's credibility and integrity over her connection to Wilson and his $400,000 fraud.

And anything stated in Parliament cannot be subject of defamation proceedings because of parliamentary privilege.

The Deputy Opposition Leader, Julie Bishop, is set to lead the inquisition. This will pit Australia's two most senior female politicians against each other, both trained lawyers, both hardened political infighters, in a contest that will play to the gallery of public opinion but, ultimately, to an audience of just two or three people - the independents who keep Labor in power.

Could this really be a greater threat than Kevin Rudd's challenge for the leadership in February? Yes, because while Rudd's failed bid threatened Gillard's prime ministership it did not necessarily endanger Labor's grasp of power.

That was a civil war in Labor. This is an affair that, depending on what emerges and how Gillard responds, could lead the opposition to move a motion of no confidence in the prime minister.

She could survive only with the support of Tony Windsor, Rob Oakeshott and Andrew Wilkie. None of these three is a fan of Tony Abbott, and all would prefer to keep Gillard in place. But there is a limit to what they can tolerate politically. Each has to answer to his electorate, not to Labor HQ.

Even one of Gillard's cabinet ministers and a mainstay of her caucus support, Bill Shorten, distanced himself from his leader over the scandal this week. Shorten was asked on Lateline about the "slush fund" Gillard had set up for her then boyfriend in the time she worked as a partner of the law firm Slater and Gordon in the early 1990s.

Why ask Shorten? Apart from being the Minister for Industrial Relations, Shorten knows quite a bit about the affair. He was the man brought in to lead the union after the Wilson scam had been disclosed and the AWU leadership purged.

Gillard has admitted, years ago, that she helped Wilson with the legal work to create what was euphemistically called the Workplace Reform Association.

She has described it as a "slush fund" for union officials. Wilson and his cronies persuaded various companies to donate money to the fund. Wilson then helped himself to it.

Asked about this fund this week, Shorten said: "Well, that account was unauthorised by the union and was an inappropriate account that account as far as I can tell. So that was out of bounds.

"When that account came to light, what I do know is that the union took action. I know that the union leadership of the day reported it to the police. In terms of the Prime Minister's explanations, I am satisfied with them."

So while he did not challenge the Prime Minister's version of events, neither did he mount a rousing defence of her. The political significance of this was not lost on Gillard's caucus, which is increasingly uneasy about the matter.

There is much detail but three central questions that Gillard will need to answer next week. Gillard has said she had no knowledge that Wilson stole the money and used some of it to buy a house in the Melbourne suburb of Fitzroy.

She has said that she broke off her relationship with him in 1995 as soon as she realised his deceit. She was young and naive, she has said. Specifically, she has said she was not involved in helping with the mortgage or the conveyancing work to help Wilson buy the house.

But there is new material suggesting that she was involved with the mortgage. "There is absolutely no doubt that Ms Gillard not only knew of the Slater and Gordon mortgage in March of 1993, but was specifically involved in taking steps to facilitate that mortgage," a former colleague and legal partner of Gillard's at Slater and Gordon, Nick Styant-Browne, told the ABC's 7.30 on Thursday night, saying he had documents to show this.

And Fairfax Media's Mark Baker reported yesterday that the Commonwealth Bank sent a letter to Ms Gillard on March 22, 1993, addressed ''Attention: Julia Gillard,'' confirming that the mortgage had been insured.

On the same day, a handwritten note in the Slater and Gordon conveyancing file on the property was headed "Bruce Wilson," noted the bank letter confirming mortgage insurance, and added: "Ralph spoke to Julia Gillard."

Who's Ralph? That's Ralph Blewitt, the bagman for Wilson, who handled the money and bought the house for Wilson so it wouldn't appear in Wilson's name. After 15 years in self-imposed exile in Malaysia to avoid prosecution, Blewitt returned to Australia this week.

He spoke to Victoria Police yesterday, offering to give evidence in the matter if he were granted immunity from prosecution.

So the opposition's first central theme will be to demand to know what did Gillard know about the conveyancing and how much was she involved in the house-buying transaction? Did she know the source of all the funds?

Its second central theme will be to demand to know whether she received any personal benefit?

And third, the opposition will take up Gillard's account of events in which she discovered in 1995 that she had been deceived by her conman boyfriend.

Why didn't she report her discovery to the AWU, or the police, or help recover the money, the opposition will want to know?

The questions next week will overshadow any good news of the government's achievements. And its very existence could depend on the quality of her answers.

Peter Hartcher is the political editor.

Knives are out for Gillard

AM by chief political correspondent Simon Cullen

Updated Fri Nov 23, 2012 8:29pm AEDT

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Tony Abbott says a future Coalition government would cut Australia's humanitarian refugee intake by more than 6,000 places, despite a previous offer to boost the quota.

As the Coalition tries to increase pressure on the Government over the issue of border protection, Mr Abbott has also suggested that asylum seekers released into the community on bridging visas should be required to work in return for welfare payments.

The Government is increasing Australia's annual refugee intake to 20,000 places this year, in line with one of the recommendations of the expert panel on asylum seekers.

But Mr Abbott has pledged to return the quota to just 13,750 - a move that is estimated to save the budget $1.4 billion over the forward estimates - arguing that the extra places are sending the "wrong message" to people smugglers.

"Under this Government, those positions are increasingly being filled by the people who are coming to this country illegally by boat," Mr Abbott told AM.

"We need to send the strongest possible message to the people smugglers and their clients that the game is up, we will not be dictated to by criminals.

"We will not allow ourselves to be played for mugs by people smugglers."

Earlier this year, Mr Abbott offered to support an increase in the humanitarian intake to 20,000 places as part of the negotiations aimed at breaking the political deadlock over asylum seeker policy.

He has rejected suggestions today's announcement is a back flip, instead saying the earlier offer had expired.

Immigration Minister Chris Bowen says he is disappointed by the Coalition's announcement, adding that Mr Abbott's reasons for the change do not make sense.

"Mr Abbott has said today that the increase [in the humanitarian intake] sends all the wrong signals to asylum seekers - he just doesn't get it," Mr Bowen told reporters in Sydney.

"It sends the right signal. It sends the signal that there's another way - that you don't have to get on the boat to get a chance of a better life in Australia."

Greens Senator Sarah Hanson-Young agrees that cutting the humanitarian intake could backfire and actually encourage more asylum seekers to attempt the boat journey to Australia.

"He doesn't know much about the issue, he doesn't understand the issue, and frankly he doesn't care," Senator Hanson-Young told reporters in Canberra.

On Wednesday, Mr Bowen announced that the Government would be releasing thousands of asylum seekers into the community on bridging visas because there had been too many boat arrivals to process everyone offshore.

People on those visas are not allowed to work, do not have access to family reunions, and are provided with a limited amount of financial support from the Government.

Mr Abbott has suggested there should be some sort of "mutual obligation" on those asylum seekers receiving welfare support.

"If it is right and proper for young Australians to be working for the dole, surely it is even more right and proper for people who have come illegally to our country to be pulling their weight," he said.

"I think it is very, very important that there be no free ride.

"There certainly shouldn't be a free ride for people who have come uninvited to our country."

Some within Labor are concerned that the use of bridging visas could result in a poverty-stricken underclass, and have argued that asylum seekers should be allowed to work.

West Australian-based Labor MP Melissa Parke has suggested that asylum seekers should be given the option of living and working in areas where there are labour shortages.

Refugee advocate Pamela Curr thinks asylum seekers would embrace the opportunity to work.

"People would far rather do a day's work than sit in some crummy little flat or a house getting a pittance and having nothing to do," Ms Curr told AM.

"They say to me the best way to get well after two years in detention is to work because while you're working you stop thinking about your family, about what happened to you and what the lack of future.

"Work is the best medicine and these are people who embrace it willingly."

But Senator Hanson-Young says the Coalition's policy would not only push asylum seekers into poverty, it would then force them to work for it.

She says a better option would be to give asylum seekers full work rights so they can provide for their families.

Video: Tony Abbott says increasing the humanitarian intake is sending the wrong message. (ABC News)

Abbott reveals plans to slash refugee intake - ABC News (Australian Broadcasting Corporation)