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.
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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.
