The former head of a union at the centre of a corruption inquiry became suspicious about payments from a large construction company because of "secret" processes, a royal commission has heard.
Cash from construction giant Thiess is alleged to have been funnelled into a secret slush fund established by the Australian Workers' Union (AWU) in the early 1990s, with the money used to help officials win elections.
Former AWU national secretary Ian Cambridge said at the royal commission into union corruption on Tuesday that he had doubts "Thiess was getting services without paying for them".
He said he didn't know about the accounts.
"It wasn't me so much, it was that no one knew," the now Fair Work Commissioner said.
"This was all secret. It wasn't disclosed to the national executive, there was never any knowledge of the establishment of this body."
Mr Cambridge, AWU boss until December 1996, was then asked under cross examination whether services were being provided.
"If you were doing it transparently and everyone knew about it, you'd have no reason to doubt it," he said.
It's further alleged that $7000 from the fund, the Workplace Reform Association, was used to pay for renovations at Julia Gillard's then Melbourne home in 1994.
She has always maintained her innocence over the affair.
The former prime minister's boyfriend and allegedly crooked union official Bruce Wilson is due to give evidence before the royal commission on Thursday.
Recommencing in Sydney on Tuesday, the inquiry heard money set aside to support families of dead union workers was used to pay redundancies.
"At the time that redundancy payments were being spoken of, the union was fairly short of cash and money had started to come in from the sale of a property in Melbourne," Mr Cambridge said.
About $250,000 was earned from the sale.
"That money ... should have been used for amongst other things, payments of the bereavement grants.
"But because that money had been earmarked for redundancies, those payments couldn't be made," Mr Cambridge said.
Mr Cambridge also spoke of the nature of the relationship between former AWU official Ralph Blewitt and Mr Wilson.
"They were very close," he said.
"Mr Blewitt seemed to take orders from Mr Wilson."
The inquiry continues.
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