How it all blew up for Cash

Michaelia Cash ponders a response in Senate estimates. Picture: Kym Smith

There were powerful reasons for Michaelia Cash to proceed with care in August when she referred a $100,000 union donation to the activist group GetUp! for possible investigation.

The same applied, perhaps more so, when she followed up that referral to the Registered Organisations Commission with another just days later.

Cash wanted the Turnbull government’s recently created regulator of unions to consider whether money donated to GetUp! by the Australian Workers Union in 2006, and a separate batch of donations made to three Labor candidates by the union for their election campaigns in 2007, were properly authorised.

Bill Shorten figured in both matters as the AWU’s national and Victorian branch leader when the funds were handed out.

Shorten was the chief instigator of the AWU’s GetUp! donation and was on the board of the left-leaning campaign organisation when it received the union funding.

It remained unclear, following a report by The Weekend Australian that revealed the existence of the $100,000 donation, whether Shorten gained approval from the AWU’s executive as legally required under rule 57. The ROC referral related to the Labor candidate donations, which also followed a report by this newspaper, and was even more delicate for Shorten.

It was based on the allegation that he effectively gave union money to himself as a Labor candidate when making his first run for parliament to fund his own campaign. All donations above $1000 require approval by the AWU’s national executive or its state equivalents.

ROC chief Mark Bielecki said during a Senate estimates committee hearing this week that the investigation he eventually launched on October 20 was about the AWU. It was not about Bill Shorten, he said.

But the politics, as Cash should have known, suggested something different.

As she is Employment Minister, the public perception of her actions is very important. She needed to follow process to the letter. Most critically, she needed to avoid fuelling the inevitable allegations that would arise from sparking yet another inquiry into past union dealings involving Shorten. He had already survived a torrid session of giving evidence to the royal commission into corruption in 2015. Any further scrutiny could be branded by Labor as just another partisan exercise with a prime objective to nobble the Opposition Leader.

Shorten cannot be immune from the law, and his past should be open to scrutiny perhaps more than any other politician if he is the alternative prime minister. In principle at least, surely Shorten would be the first to agree.

But the elevated temperature of Australia’s political scene (the Coalition trails Labor in the polls and Malcolm Turnbull is clinging to a slim parliamentary majority) means any targeting of unions that puts Labor’s leader in the spotlight would provoke cynicism unless handled well. And handled at arm’s length.

Australian Federal Police officers raid the offices of the AWU on Spencer Street. Picture: Aaron Francis

The aftermath of an Australian Federal Police raid at the ROC’s behest on Tuesday this week to seize documents from the Sydney and Melbourne headquarters of the AWU has turned into a mess for Cash.

Potentially damaged, too, is the credibility of a regulator that began operations only at the start of this year under laws meant to improve union governance and accountability by separating those functions from the Fair Work Commission, which the government sees as a tame cat.

Labor believes it now has strong ammunition to accuse the government, and Cash as the responsible minister, of collusion with a supposedly independent authority, and of the blatant use of police for political purposes. All for what? The very thing Cash should have been keen to avoid: allegations of prosecuting a smear campaign based on ideology and hatred of unions to unfairly hurt Shorten.

Cash’s own future is in the balance. She is so far resisting calls from Labor to resign for misleading a Senate estimates committee five times on Wednesday by saying that no one from her office tipped off the media in advance about Tuesday’s raid. She later returned and admitted that her senior media adviser had lied to her, and had alerted several journalists.

The adviser, Dave De Garis, immediately took a political bullet for his minister by resigning. Cash says she knew nothing about the police raid until she saw it on the television news.

Labor frontbenchers ask how likely is that scenario inside a close-knit office of parliament during a sitting week with a chief of staff in charge and no unsanctioned freelancing permitted.

There is much that does not make sense, or that appears contradictory, about this week’s police raid and its aftermath.

Bill Shorten in question time this week. Picture: Gary Ramage

The first is why the ROC concluded it necessary to seek a warrant from a judge for the secondment of AFP officers for a raid in the first instance.

The ROC initiated its formal investigation on Friday of last week. Soon after the simultaneous raids about 4.30pm on Tuesday, the commission issued a short statement saying it had received information that “raised reasonable grounds for suspecting that documents relevant to this investigation may be on the premises of the AWU (at its Sydney ­national office and Victoria branch office) and that those documents may be being interfered with (by being concealed or shredded).”

That information was apparently received in the days soon after the investigation was started. Giving evidence to a Senate estimates committee on Wednesday, Bielecki and his deputy, Nick ­Enright, declined to say whether the source was anonymous. They said someone had called a staffer at the ROC’s Melbourne offices.

They offered no detail on the nature of the suspected sabotage.

Yet if shredding vital documents was a matter of such concern, why did Enright call AWU Victorian branch secretary Ben Davis, a little while before the police raid to alert him it was about to happen? If destroying documents was feared, the AWU was given time to disappear some files.

During the Senate estimates hearing on Wednesday night, the ROC’s rationale for the police raid also seemed to shift.

Bielecki said the raids occurred after AWU officials had refused to hand over documents related to the donations. So perhaps if the AWU had agreed to co-operate, the raids could have been avoided.

AWU national secretary Daniel Walton on Thursday said the union had always co-operated in the past by responding to notices to produce documents but no such notices had been issued yet for an investigation launched only four days before a raid by 32 police (police say 13) the union said was gross overreach.

Walton also stuck with his publicly stated position that the AWU was willing to co-operate with the ROC, and would be releasing all of the relevant documents when the debacle was over.

Walton’s stated position sat oddly with the fact that the AWU’s response to the raids was to rush to the Federal Court to seek an injunction afterwards that not only challenged the processes of the investigation but sought to shut it down entirely.

The AWU wanted all documents kept in the AFP’s possession, denying them to the ROC team until at least the resolution of court action. Walton’s ­ultimate legal objective was to secure the return of the documents, and stop any further reopening of the case. It did not sound like co-operation.

Who was right? Bielecki or Walton? Bielecki caused some further confusion during his Senate estimates evidence on Wednesday during an answer to a question from Labor senator Kimberley Kitching when he said the AWU had not complied with other past notices to produce documents.

Later, he corrected himself, saying he mistook the AWU for another union. But it was too late for some twitterati and others on social media, who rushed into action by conflating what Bielecki said to be an admission that the AWU had co-operated all along on the donations matter.

It had not. Even if Bielecki skipped between suspected tampering and non-co-operation as the justification for the raids, he was correct that the AWU had not co-operated. “We did, in August, ask for relevant documents to be provided voluntarily to the ROC, and the AWU, through their lawyers, declined to make them available to us,” he said.

The ROC launched its investigation after the AWU refused an informal request to hand over minutes and other records during the preliminary stages of inquiries following Cash’s referral in ­August. Walton confirmed as much on Thursday, saying that prior to the formal launch of the investigation, the AWU had not supplied requested documents because it regarded the whole exercise as politically motivated and no formal notice to produce documents had been received.

Walton confirmed publicly on Thursday that the AFP raids had removed minutes of union executive meetings and other documents relating to 2006 and 2007.

One of the curiosities of this shemozzle is whether it would be illegal for the AWU to destroy these records, if that was the reason for the police raid, because the legislation governing the ROC makes it clear unions must keep their documents for seven years.

The ROC did not respond to a question on this yesterday, citing ongoing court action but AWU rules do appear to spell out that records must be kept indefinitely so that member can inspect them.

Rule 59 (1), as submitted to the royal commission, says: “All records showing the financial transactions of the union are to be kept at the registered office of the union.’’

Rule 59 (3) says members requesting to see such records”must be permitted to do so’’.

A further hearing of the Federal Court yesterday ended with an adjournment until December and a ruling that prevented ROC access to AWU documents until then.

Meanwhile, the AFP has started an investigation into the police raid tip-off to media organisations. Cash asked the ROC to request the AFP action.

Cash is taking a “modern” interpretation of ministerial responsibility by saying she unwittingly said no one from her office leaked information on the raid because she did not know at the time and it was only after she quizzed her senior media officer late on Wednesday that he confessed and quit.

A report by The Australian’s Joe Kelly yesterday showed how Cash’s staffer was not the only one to leak details of the raid and that he might indeed have done so to two newspaper reporters after major television networks had received separate tip-offs.

It is likely to be the subject of lingering debate about media ethics and confidentiality of sources that two journalists told Buzzfeed that De Garis was their source for the leak, which prompted his admission and resignation.

But signs that television networks and perhaps others were tipped off by sources elsewhere who might have known about the planned raids (sources inside the NSW and Victoria police forces are a possibility) suggest Cash’s staffer was not alone.

It’s possible he acted after word started getting out.

Where the ROC investigation goes now is unclear. But there is one organisation that could clear up the matter of how much was donated by the AWU and when, even if it has no connection to the central question of proper authorisation by the AWU.

Late on Wednesday, GetUp! national director Paul Oosting ­issued a statement claiming the AWU’s “very public” donation of $100,000 in the 2005-06 financial year had “already been acknowledged”. Oosting’s comments sit oddly indeed with past refusals by him and his predecessors to confirm what support Shorten’s union provided. GetUp! has never acknowledged the AWU donation in its past annual reports or donations list, despite detailing a bunch of others from early benefactors.

The Shorten-backed $100,000 donation was a curious one, a newsworthy one, because it involved a sizeable sum going to an organisation that has run campaigns to close down industries employing many AWU members.

Is that why AWU members were also not told about the ­donation? It did not show up as an itemised figure in union accounts.

The legitimate reason for Cash to ask the ROC to consider an investigation was a great deal of obfuscation about whether funds were ever given an official tick by the AWU’s national executive and documented in minutes.

This is no trivial “paperwork” issue, as some suggest: it is a fundamental test of accountability and is legally required. Union members can reasonably expect that their dues are not playthings.

The three AWU donations to Labor candidates, which prompted Cash’s second referral to the ROC, were not run of the mill handouts that could be expected at election time. Cash referred this matter to the ROC after The Australian reported that an AWU national executive resolution passed in November 2006 left all requests for donations for Labor candidates in the 2007 federal election “in the hands” of Shorten. If that is what occurred, it would not be acceptable union governance.