August 27, 2012 | Graham

Why not a trust fund?

The Prime Minister says it is defamatory to say she advised on setting-up a trust fund for former partner and client Bruce Wilson to hold funds for his re-election campaign. It was her reason for calling her snap media conference last week, but it is hard to see how the  claim could actually be defamatory in itself.

The AWU Workplace Reform Association, that she did advise on seemed to have been designed to act in a similar way to a trust fund, which is more or less what it did – holding money for Wilson and his co-conspirator, Ralph Blewett, and distributing it to them.

On the PM’s explanation the purpose of the association was to raise monies for their re-election campaign and that if there was a falling-out the money could be properly accounted for.

So, on the traditional test that for a comment to be defamatory it must bring a person into disrepute, or cause others to “shun ridicule or avoid”, it’s hard to see how it was defamatory, unless you thought that no competent legal practitioner would have set one up in the circumstances.

Which is where the mystery comes in to me.

I’ve been involved in a lot of campaigns, and I’ve never seen anyone set-up an association to hold the money. You would normally set up a bank account for the purpose which would be in effect a trust fund. If you couldn’t trust any of your associates you might approach a solicitor, or some other professional, to hold the money on trust for you.

Solicitors in fact have trust funds that are designed for just these types of purposes.

So why did Gillard advise Wilson and Blewett that they should set up an association?

I can understand why they might have thought it was a good idea. Their track record shows that they were able to get companies to pay money to the association in the mistaken belief that it was going to the union. They wouldn’t have made that mistake if it was just the Wilson-Blewett re-election account.

(Another issue that arises here is whether companies claimed a tax deduction for the monies paid to the association. If they did, then another question is whether the formation of the association facilitated tax evasion.)

The Prime Minister was apparently unaware of the fundraising techniques of Wilson and Blewett, so why did she think this was an appropriate way to hold money? Why didn’t she advise them to set up a trust account?


Posted by Graham at 10:05 am | Comments (10) |
Filed under: Uncategorized


  1. Umm, isn’t your first sentence incorrect?
    Wasn’t the assertion in the Australian that the PM declared was defamatory, that she had actually set up the trust fund?
    I think I’m right in this, and there is a world of difference between giving advise to someone considering a course of actin and actually doing it for them.

    Comment by Anthony — August 27, 2012 @ 11:30 am

  2. Sorry Anthony, but the sentence is correct as per where Hedley Thomas, presumably with The Australian’s authority says: “They saved their worst for Thursday when the Prime Minister seized on a trivial error by my colleague at The Australian who had incorrectly reported in an inconsequential page 6 colour story that Gillard had established a “trust fund”, not a “slush fund”.”

    Comment by Graham — August 27, 2012 @ 12:41 pm

  3. Graham,
    My bad wording.
    Th point I was trying to make is that, in fact, the PM didn’t set up a fund at all; she merely gave legal advice.
    I understood her complaint to be not about trust fund vs slush fund, but that she did not set up a fund at all.
    In any case, as I should have said in the first post, I enjoyed the column.

    Comment by Anthony Element — August 27, 2012 @ 1:53 pm

  4. According to Alan Jones there were 13 bank accounts set up that members of the HSU did not know about.Why did not Julia open an official file on these dealings? She is supposed to do this to protect her employer Slater and Gordon from the legal and criminal implications.

    Why did Julia Gillard and Labor have Michael Smith sacked from 2UE for his investigative journalism? How were Julia and Labor able to silence the Australian Newspaper for their reasonable analysis of this smelly affair?

    Julia Gillard must face the Aust public and answer all these questions and many more.Never before in our history has the integrity of a Prime Minister been put in so much doubt.

    The position of PM is always greater than any individual or their naked,grotesque ambition.

    Comment by Ross — August 28, 2012 @ 8:05 pm

  5. Ross, Julia had nothing to do with HSU accounts as far as I know.

    Comment by Graham — September 1, 2012 @ 6:25 pm

  6. You are right Graham about the bank accounts but Julia should have opened a file on behalf of Slater and Gordon and detailed her representation as a lawyer in advising the HSU on channeling funds supposedly to improve work place health and safety.These funds did not go to this purpose.

    Julia Gillard by her own admission,did not do this.Julia in her TV appearence constantly emphasised this 17 yr time period,as if time gave her clemency.She did not address the real issues and only sought to denegrate Larry Pickering as a major defence.

    Comment by Ross — September 1, 2012 @ 10:43 pm

  7. Ross, as a lawyer at Slater and Gordon Gillard had nothing to do with the HSU. It was the AWU. Get your facts straight!

    Comment by Graham — September 1, 2012 @ 11:31 pm

  8. Whether it was the AWU or the HSU it does not clear Julia Gillard of wrong doing Graham and it does not undermine my argument.Julia kept repeating that these events were 17 yrs ago as,if this was an excuse or defence.

    They all have dirt on each other and will close ranks.Slater and Gordon donate solely to Labor and now have cleared Julia of any wrong doing.It would be interesting to see how many contracts Slater and Gordon get from Labor and the Unions.

    Comment by Ross — September 2, 2012 @ 5:59 pm

  9. Ross, it was not the HSU, and making a mistake like that should matter to you.

    Comment by Graham — September 3, 2012 @ 9:56 pm

  10. It only matters Graham if you are intent on discrediting the person making a point so you are seen as a dominate Silver Back.

    We all make mistakes of detail but not in judging fundamental dishonesty and corruption which seems to permeate our current political sphere.

    Comment by Ross — September 4, 2012 @ 8:49 pm

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