Julia Gillard has lost all authority within the broader Labor movement

THE real import of the alleged brothel creeping scandal surrounding Craig Thomson has been missed. And it is this: key factions and unions within the Labor movement are now openly indifferent to the fate of either Julia Gillard or the federal government. They simply don’t care any more.

Gillard has now lost all authority within the broader Labor movement. By their actions in the Thomson saga they have signalled a judgment that she cannot win the next election. Settling internal scores and power struggles is therefore now more important than whatever happens to a lameduck PM who can’t haul her primary voting numbers out of the pathetically fatal mid 20s.

The Mafia-style dirt-covered shovel — code for digging your own grave — dumped on Friday at 3.30am on the doorstop of Kathy Jackson, the union official who had the courage to refer Thomson’s activities to the police, may as well have been delivered to the Lodge. For Gillard it is now that bad. She is simply regarded as collateral damage and large sections in the Labor movement are uninterested about whether she’s terminally wounded or not as they go about their internal bloodletting. It is about to get worse as elements of the Australian Workers’ Union seek to settle up with Thomson’s accusers by demonstrating that Gillard herself was implicated, albeit unknowingly, in a major union fraud of her own before she entered parliament.

On Friday, Michael Smith of 2UE contacted me to check the veracity of material in a statutory declaration drawn up by Bob Kernohan, the former president of the AWU, and dealing with the relationship between Gillard and Bruce Wilson, which I outline below.

On Saturday, Herald Sun and Daily Telegraph columnist Andrew Bolt wrote on his blog: ‘‘On Monday, I’m tipping, a witness with a statutory declaration will come forward and implicate Julia Gillard directly in another scandal involving the misuse of union funds. Gillard herself is not accused of any misbehaviour at all. I do not make that claim, and do not hold that belief. But her judgment — and that of at least one of her ministers — will come under severe question. She will seem compromised. It could be the last straw for Gillard’s leadership.’’

Big call. But I do have a good deal of knowledge regarding Bolt’s claims. On Sunday November 11, 2007, just days before the November 24 election I interviewed Gillard, then deputy leader of the opposition, in my capacity as political editor for News Limited’s Sunday newspapers. The interview concerned the embezzlement of union funds — not disputed — and later the subject of a court conviction by a former boyfriend of Gillard, Bruce Wilson. I had researched the piece for months. It was the most heavily lawyered article I have ever been involved in writing. The story said that as a solicitor acting on instructions, she set up an association later used by her lover to defraud the AWU. But she has strenuously denied ever knowing what the association’s bank accounts were used for.

Gillard, then in her early 30s, was a lawyer with Melbournebased Labor firm Slater & Gordon. At the time of the fraud she acted for the AWU. She met Wilson, then the West Australian AWU secretary, while representing the union in the Industrial Relations Commission. Wilson later moved to Melbourne to become Victorian secretary of the union.

‘‘These matters happened between 12 and 15 years ago,’’ Gillard told me. ‘‘I was young and naive. I was in a relationship, which I ended, and obviously it was all very distressing. I am by no means the first person to find out that someone close turns out to be different to what you had believed them to be. It’s an ordinary human error.

‘‘I was obviously hurt, when I was later falsely accused publicly of wrongdoing. I didn’t do anything wrong and to have false allegations in the media was distressing.’’

What the lawyers would not allow to be reported was the fact that Gillard shared a home in Fitzroy bought by Wilson using the embezzled funds. There is or was no suggestion Gillard knew about the origin of the money. We now await the issue to which Bolt refers.

If it comes, and if it is powerful as Bolt suggests, it will be further evidence that the Victorian Right represented by the AWU is involved in a life and death struggle with the Right as represented by the Hospital Services Union. Thomson was a senior official of the HSU for 20 years before entering parliament via the seat of Dobell.

The HSU split several years ago into two factions. Thomson was supported by Jeff Jackson, Kathy Jackson’s former husband. This so-called old guard was the support base for Victorian right-wing power boss, David Feeney. Feeney is now looking for a parliamentary seat because Gillard’s abysmal numbers have made his third Senate spot vulnerable.

A defeat for the old guard by way of a successful prosecution of Thomson by police, would leave Feeney powerless and without a base or a seat.

Jackson himself has been accused of using union money on escorts with enemies of the Victorian HSU boss releasing bank statements showing payments to the same Sydney brothel where federal MP Thomson’s credit card was allegedly used. Jackson has denied the claims. Ultimately at issue here could be the succession to Gillard, and I’ll explain why.

When Kathy Jackson called in the wallopers, the stakes were high. Because a federal defeat for Thomson and his allies would enhance the power base of Victoria’s two other factional king makers, Bill Shorten and Stephen Conroy who are both aligned with the new guard in the HSU. And we all know what Shorten’s ultimate ambition is.

What a tangled web we weave especially when you consider Thomson is married to Zoe Arnold, a former Transport Workers Union official and adviser to former NSW Health Minister Reba Meagher. Alex Williamson, daughter of HSU national president Mike Williamson, is an adviser to Gillard. And, of course, as mentioned, Kathy Jackson, who blew the whistle on Thomson, was married to former Victorian state HSU secretary Jeff Jackson.

Truly the NSW Disease has arrived in Canberra.

Meanwhile amid all this interbred internecine manoeuvring Gillard attempts to adopt the high ground, attacking shadow attorney-general George Brandis for intervening in the course of justice. On Thursday morning Gillard attacked Brandis for speaking to NSW Police Minister Michael Gallacher at a time when the allegations against Thomson were being assessed by NSW Police. Unfortunately she got her facts wrong because the NSW police only announced they were conducting an assessment four days after Brandis spoke to Gallacher and in fact only got Brandis’s dossier three days after he spoke to Gallacher.

A small point but one that indicates the pressure is beginning to show on Gillard as she desperately searches for points of deflection. During the same press conference she also vainly tried to defend Thomson’s decision not to make a statement to the parliament on the facts. We all know why; if he lies he’s finished as an MP and Gillard is washed up as Prime Minister. Gillard and Thomson are shackled together just as surely as two First Fleet convicts.

Oh, and here’s a small postscript on which to end. On September 7 at the Wyong Christian School at 2pm there will be the opening of a new hall built with funds from Gillard’s time overseeing the Building the Education Revolution. Thomson is scheduled to attend as the local member. My gut instinct is that both he and the Prime Minister will be otherwise engaged.