Julia Gillard is in strife up to her chin; The Australian reports:
THE Prime Minister will enter parliament for the last day this year under intense pressure to explain new allegations she was heavily involved in the creation of a union body later used as a "slush fund".
The Australian reports today that documents, released after 17 years, show Ms Gillard argued the case for the incorporation of the Australian Workers Union Workplace Reform Association.
Ms Gillard told her employers at the law firm Slater & Gordon in 1995 that the association was a "slush fund" to be used for the re-election of union officials.
However, it eventually became the vehicle through which major union fraud was committed, with $100,000 from it being used to buy a Melbourne home which Ms Gillard's boyfriend, union official Bruce Wilson, lived in.
Ms Gillard has always vehemently denied any knowledge of the fraud.
She has admitted having only been involved in providing legal advice to Mr Wilson and their friend, union bagman Ralph Blewitt, as to the incorporation of the association.
The newly released documents, a record of interview about the association between Ms Gillard and Slater & Gordon then-senior partner Peter Gordon in September 1995, show Ms Gillard alone prepared the response when the authority suggested it was ineligible for incorporation due to its "trade union status".
The documents show that Ms Gillard in 1992 wrote to the Commissioner for Corporate Affairs in Western Australia, where the association was being incorporated, arguing for the decision to be reversed.
The revelations come as Victorian police begin interviewing key witnesses as part of an investigation into the Australian Workers Union scandal.
Fraud squad detectives have contacted at least two people, including retired Greek-born builder Kon Spyridis, who said he spoke with police on Monday in relation to payments he'd received from the AWU in the mid-1990s.
Police have also contacted former Slater & Gordon employee Olive Brosnahan, who in 1993 did the conveyancing on the Melbourne property at the centre of the affair.
This week Ms Gillard refused to answer repeated questioning in parliament from Deputy Opposition Leader Julie Bishop as to whether she wrote to the authority to vouch for "the bona fides of the AWU Workplace Reform Association".
On Monday, Ms Gillard told parliament: "The claim that the Deputy Leader of the Opposition has now made is a claim that appeared in The Age ... The correspondence he refers to has never been produced, so the claim has been made but no correspondence has ever been produced."
The documents relied upon by The Australian were released by Slater & Gordon's former equity partner Nick Styant-Browne, after Mr Wilson's interview on the ABC's 7.30 on Tuesday night.
However, Mr Styant-Browne released them on the basis that Mr Wilson's interview meant that he had waived his legal confidentiality as a former client of the firm.
The documents also show Ms Gillard wrote the association's rules.
While they emphasised worker safety, her document did not outline that the association was to be used for the re-election of officials.
It was also revealed the rules Ms Gillard used were "cut and pasted" from rules she had earlier used when incorporating the Socialist Forum which she had helped found at Melbourne University in the 1980s.
Last night, Ms Gillard's spokesman told The Australian the PM had "no recollection of receiving or sending the claimed correspondence in this matter".
The allegations are hugely damaging to Julia Gillard's credibility. She told the Australian Federal Parliament this week that "no correspondence has ever been produced". Now the correspondence HAS been produced, and Julia Gillard's role in the messy affair has been revealed for all to see.
The timing of this could not be worse for Ms Gillard. The Australian Parliament goes into recess after today's session, with a huge, dark cloud hanging over here. It will provide her opposition fertile ground over the summer break.
Watch this space for developments.