WA taxpayers were victims of the alleged $1 million union fraud that is continuing to haunt Julia Gillard.

As the Prime Minister again denied any wrongdoing over the 17-year-old financial scandal, The West Australian can reveal that more than $380,000 of State Government money was given to a union "association" that Ms Gillard helped establish on behalf of her then boyfriend Bruce Wilson.

When she was questioned by her employers at law firm Slater & Gordon in 1995 over her role in setting up the Australian Workers Union Workplace Reform Association, Ms Gillard said she understood its purpose was to hold a union re-election "slush fund".

In documents lodged with the WA Commissioner for Corporate Affairs three years earlier, the association's stated purpose was the "development of changes to work to achieve safe workplaces".

Before resigning from Slater & Gordon soon after the law firm's internal inquiry, Ms Gillard said she worked on the association for Mr Wilson - her boyfriend and secretary of the AWU.

He was later accused of siphoning large sums of money from the association's Perth bank accounts.

According to a 1996 affidavit filed in the NSW Industrial Relations Court when the scandal became public, $385,000 was WA government money that had been provided to construction company Thiess Contractors "for the financing of training schemes and were intended to be spent by the union for that purpose".

Thiess was the biggest contributor to the association between 1992 and 1994 but refused to lay a complaint when WA fraud squad detectives began an investigation into what Mr Wilson and his WA union colleague Ralph Blewitt did with the money.

More than $92,000 of the Thiess money went towards buying a house in Melbourne, which Mr Wilson lived in when he moved to Victoria.

On top of that, at least $220,000 in cash was withdrawn from association accounts in Perth between September 1993 and December 1994.

Throughout that period, AWU members were employed at the Dawesville Cut project being managed by Thiess.

Without Thiess' complaint against Mr Wilson and Mr Blewitt, police wrote off the investigation in 1997.

The pair were also investigated over claims that $145,000 from a separate union fund was used inappropriately to buy holiday units in Kalbarri. No charges were laid.

The AWU's then secretary, Tim Daly, showed his frustration in a letter complaining about the alleged frauds to the WA Director of Public Prosecutions.

"I have pursued the allegations vigorously but I am at present left with nowhere to go," he said.

Ms Gillard has strenuously denied any first-hand knowledge of alleged fraud involving the union association and her office.

She has refused to answer specific questions from _The West Australian _.

"The Prime Minister has repeatedly made clear that she was not involved in any wrongdoing," a spokesman for Ms Gillard said.

"Any questions about this document should be addressed to the person who lodged and signed it, namely Ralph Blewitt."

Mr Blewitt broke a 17-year silence this month when he said he was prepared to reveal everything he knew about the financial dealings if he was granted immunity from prosecution.

The West Australian

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