<i>Illustration:</i> Pat Campbell.

Illustration: Pat Campbell

By rights, observers should see Julie Bishop as being in a death roll with Julia Gillard, locked in a struggle from which only one of them can, or should be allowed to, survive.

The struggle this week is much more than a contest of ideas, or ideals, or policies, or slights on each other's record. It is instead about fundamental fitness and judgment.

Bishop is essentially telling the people of Australia that the Prime Minister of Australia is unfit to hold public office because of her actions as a trade union lawyer 17 or more years ago, and, perhaps, for covering up the ''scandal'' since. She has retreated from alleging that Gillard personally benefited from the malfeasances of her then boyfriend, but this has been the innuendo of a number of questions she has asked about the purpose of, or destination of, cash said to have come from the union. The implication of further questions and statements has been that Gillard's silence about her role in the establishment of a ''slush-fund'' association increased losses suffered by the frauds of her lover.

Actually the charges, such as they are, are scattergun, and her late entry into the AWU slush-fund scandal seems rather more fishing expedition, based on allegations from a number of sources, rather than the prosecution of an case already mastered by Bishop.

Perhaps her failure to show actual impropriety is not so much for want of evidence than an attempt to lock Gillard into a version of events, before Bishop turns the tables with convincing witnesses and materials. If so, Bishop must spring her surprise soon.

The ultimate sin by Gillard could be misleading the Parliament. That would probably have to be a direct lie. Gillard has been forthright in general denials of wrongdoing. She has insisted that her accusers frame concrete allegations she can answer. Yet, like any experienced lawyer or politician, she has become wary about questions of close detail (testing her memory of events nearly two decades ago) and has hedged her words with phrases about ''the best of my recollection'', ''so far as I can remember'' and ''to my knowledge'' - the last phrase capable of meaning whatever one wants, whenever one wants.

By one standard Gillard is entirely frustrated. Her critics have never formulated a clear allegation, and many of them, particularly at The Australian, have constantly shifted in attempting to articulate the questions they say are there for her to answer. They show no sign of losing their curiosity, but they have yet to show misconduct by Gillard. Increasingly, moreover, journalists chasing rabbits down burrows have tended, defensively, to suggest that it is for Gillard to prove her innocence (though of what is not clear) rather than for them to prove guilt.

That the background involves plain fraud on a trade union makes the case intrinsically murky, as does the fact that the union, then and now, plays its politics hard, with repercussions almost immediately felt in the federal caucus. Gillard is plainly guilty - if that is the word - of misjudgment. One was personal: she chose for a boyfriend an ambitious union official who was rorting union funds, and she (by her own account unwittingly) facilitated his fraud by creating a legal entity that she thought, wrongly, was to operate for a re-election campaign fund. [No evidence whatever has emerged that she had knowledge of bank accounts created by this entity, transactions through it, or, generally, of her lover's other frauds on the union.]

The other misjudgment was professional. Strictly, the union, not the lover, was her client; in practice, the lover was the representative whom she was expected to deal. This created a potential conflict of interest. Gillard seems to have terminated the personal relationship as soon as questions emerged about her lover, so it seems unlikely that there was ever an opportunity to consciously prefer his interests to the union's. The innuendo will, however, remain that she may have unwitting preferred his instructions to the union's.

Such potential conflicts of interest are always unwise, but are far from uncommon, on both sides of politics. Blanket condemnation of such practices would cause some agonised discussion in the caucuses.

The lawyers' ethical rule is akin to the so-called rule about doctors having sex with their patients: one can make your lovers your clients, but should avoid making your clients your lovers. But the lawyers' club tends to frown only where the client is thought vulnerable, and the business involves personal affairs. A union official and a lawyer are consenting adults.

A dimension of the problem which has had little attention is the damage done to Gillard's firm by the frauds of her boyfriend. Slater and Gordon was, in effect, the house firm of the AWU branch. It did, through Gillard, advice and advocacy in industrial matters, and tended to get much of the workers' compensation and common law negligence work after injuries by union members at work. Both are lucrative; a common quid pro quo is that the firm tends to represent free the political interests of those in the factions giving them the work, even against other factions in the same union.

Wilson's rorting caused conflict between the interests of Wilson and the AWU. Slater and Gordon, who represented both, had to drop both; losing them AWU business to another heavyweight Labor firm (containing, as it happened, Nicola Roxon). Gillard, as a known girlfriend of Wilson, and as a person already trying to parlay her connections into politics, was for a time an object of suspicion, and was blamed by her colleagues for losing the business. Hence post-mortems where Gillard was closely cross-examined about the work she had done for Wilson, and whether her actions reflected on the firm. Hence a particular line of questioning about whether she had personally benefited, wittingly or unwittingly, from the frauds.

That inquisition was 17 years ago, and was no doubt unpleasant for Gillard. But it may prove a blessing of sorts. Some of her colleagues wanted her sacked; instead, she resigned. But before that she had examined her conscience closely about whether she had unwittingly benefited from the frauds, and persuaded her colleagues she had not. Any innuendo to the contrary - coming primarily from the new AWU generation - became public in the Victorian Parliament (where she was working on John Brumby's staff) soon after, but she denied it then, and has whenever it has surfaced since. Although a few Gillard haters have become obsessed with the case, regarding it as the biggest scandal since Incitatus, no one, least of all The Australian or Julie Bishop, has developed the case beyond the initial innuendos. It is still for Bishop to make a case of impropriety, as opposed to unwisdom.

Even if she can, she must take it past being some ancient, but essentially unimportant, blot on Gillard's record.

She must show a fundamental and lasting moral unworthiness for her public post.

Gillard is, of course, screaming of sleaze, slime and smear, and, rightly, associating the Leader of the Opposition, Tony Abbott, directly with the tactics.

This was underlined by the intentional action of Abbott's chief of staff, Peta Credlin, in being photographed handing Bishop a thick Gillard/AWU file. In this sense Abbott's judgment is on the line too. So too is his claim that he is now going to concentrate on making his case for being prime minister, as opposed to the case against Gillard.

It's far from clear who will win this one, but, so far, Abbott and Bishop have yet to get to first base, and deserve what they get if they have not scored by tomorrow.

Jack Waterford is Editor-at-Large.