View source for Finance:Health Services Union expenses affair

{{Use Australian English|date=February 2014}}
{{Infobox event
| title                    = Health Services Union expenses affair
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| participants             = {{bulleted list|Craig Thomson|Michael Williamson|Kathy Jackson|Health Services Union}}
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| inquiries                = {{bulleted list|Fair Work Australia inquiry|Temby Report|Royal Commission into trade union governance and corruption}}
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| charges                  = {{bulleted list|Theft<ref name="ABC-2014-12-15"/><ref name="Austguilty"/><ref name="SMHguilty"/><ref name="SMHguilty1"/><ref name="ABCpmguilty"/>|[[Finance:Fraud|Fraud]]; Fabricating invoices; Hindering police<ref name="SMH-2013-10-15"/>}}
| verdict                  = {{bulleted list|[[Social:Guilt (law)|Guilty]] on [[Social:Appeal|appeal]]<ref name="ABC-2014-12-15"/><ref name="Austguilty"/><ref name="SMHguilty"/><ref name="SMHguilty1"/><ref name="ABCpmguilty"/>|Guilty plea<ref name="SMH-2013-10-15"/>}}
| convictions              = {{bulleted list|A$25,000 on [[Social:Appeal|appeal]] ({{dts|17 December 2014}})<ref name="Age-2014-12-17"/><ref name="ABC-2014-12-17"/>|7½ years' custody, with a non{{endash}}[[Social:Parole|parole]] period of 5 years ({{dts|28 March 2014}})<ref name="SMH-2014-03-28"/><ref name="Aust-2014-03-28"/><ref name="ABC-2014-03-28"/>}}
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The '''Health Services Union expenses affair''' was an Australian political scandal that concerned criminal activities associated with the financial affairs of the Health Services Union of Australia (HSU), between 2006 and 2007; and the Health Services Union "east branch" (HSUeast) between 2006 and 2011.<ref name=Thomsonthreat>{{cite web|last=Grattan|first=Michelle|title=Threat to PM's numbers|url=http://www.theage.com.au/opinion/political-news/threat-to-pms-numbers-20120509-1yd82.html|work=The Age|date=9 May 2012 |access-date=10 May 2012}}</ref><ref name=SMHdavis/>

Following regulatory and administrative investigations, criminal trials and a subsequent [[Social:Appeal|appeal]], on 15 December 2014 Craig Thomson, a former national secretary of the HSU and a former Labor politician, was found [[Social:Guilt (law)|guilty]] in the Victorian County Court of thirteen charges of theft, and later convicted and fined A$25,000.<ref name="Age-2014-12-17"/><ref name="ABC-2014-12-17"/> Earlier convictions for obtaining financial advantage by deception were overturned on [[Social:Appeal|appeal]].<ref name="ABC-2014-12-15">{{cite news|url=http://www.abc.net.au/news/2014-12-15/craig-thomson-appeal-former-mp-not-guilty-on-49-charges/5967124|title=Craig Thomson appeal: Former MP not guilty of 49 fraud charges, guilty of theft|author=Carlyon, Peta|date=15 December 2014|access-date=15 December 2014|work=ABC News|location=Australia}}</ref>

His conviction followed an appeal against a conviction and sentence in the Melbourne Magistrates Court on 25 March 2014 when Thomson was found guilty of 65 charges of [[Finance:Fraud|fraud]] and theft for using Health Services Union funds for personal benefit;<ref name="Austguilty">{{cite news|last=Akerman|first=Pia|title=Craig Thomson found guilty of defrauding HSU |url=http://www.theaustralian.com.au/news/nation/craig-thomson-found-guilty-of-defrauding-hsu/story-e6frg6nf-1226830337709 |access-date=18 February 2014 |newspaper=The Australian}}</ref><ref name="SMHguilty">{{cite news |url=http://www.smh.com.au/comment/how-craig-thomson-came-undone-20140218-32xzv.html |title=How Craig Thomson came undone |author=Davies, Anne |date=18 February 2014 |newspaper=The Sydney Morning Herald|access-date=18 February 2014 }}</ref><ref name="SMHguilty1">{{cite news |url=http://www.smh.com.au/federal-politics/political-news/craig-thomson-found-guilty-of-fraud-theft-charges-20140218-32xay.html?rand=1392700646386 |title=Craig Thomson found guilty of fraud, theft charges |author=Cooper, Adam |date=18 February 2014 |newspaper=The Sydney Morning Herald|access-date=18 February 2014 |agency=Australian Associated Press}}</ref><ref name="ABCpmguilty">{{cite news |url=http://www.abc.net.au/pm/content/2013/s3947384.htm |author=Donovan, Samantha |title=Thomson found guilty on fraud/theft charges |date=18 February 2014 |work=PM |publisher=ABC Radio |access-date=18 February 2014 }}</ref> and sentenced to twelve months imprisonment, with nine months suspended over two years. Thomson was initially released on bail;<ref name="ABC-2014-03-25"/><ref name="HS-2014-03-25"/><ref name="SMH-2014-03-25"/><ref name="Aust-2014-03-25"/> and the conviction and sentence subsequently overturned on appeal.<ref name="Age-2014-12-17"/><ref name="ABC-2014-12-17"/>

In October 2013, Michael Williamson, a former national president of the HSU, a former general secretary of HSUeast, and a former union and Labor right-wing factional [[Social:Power broker (politics)|power broker]],<ref name=SMHdavis>{{cite news |author=Davis, Mark |title=Labor MP accused of credit card rort |url=http://www.smh.com.au/national/labor-mp-accused-of-credit-card-rort-20090407-9zl7.html |date=6 April 2009 |access-date=2 March 2014 |work=The Sydney Morning Herald }}</ref> pleaded guilty to two charges of fraud totaling nearly A$1&nbsp;million from HSUeast, one charge of fabricating invoices and another charge of recruiting others to hinder a police investigation.<ref name="SMH-2013-10-15">{{cite news |url=http://www.smh.com.au/national/former-hsu-boss-michael-williamson-pleads-guilty-to-fraud-20131015-2vjjk.html#ixzz2tll5b3Jx |title=Former HSU boss Michael Williamson pleads guilty to fraud |date=15 October 2013 |author=McClymont, Kate |work=The Sydney Morning Herald |access-date=19 February 2014 }}</ref> An earlier independent report commissioned by the union detailed that companies associated with Williamson and his family had allegedly fraudulently received more than $5&nbsp;million from HSUeast in the period from 2006 to 2011.<ref name="SMH-2013-10-15"/> In the NSW District Court in March 2014, Williamson was sentenced to seven{{endash}}and{{endash}}a{{endash}}half years of imprisonment; with a non{{endash}}[[Social:Parole|parole]] period of five years.<ref name="SMH-2014-03-28">{{cite news |url=http://www.smh.com.au/nsw/michael-williamson-jailed-for-health-services-union-fraud-20140328-35n3f.html |title=Michael Williamson jailed for Health Services Union fraud |date=28 March 2014 |author=McClymont, Kate |work=The Sydney Morning Herald |access-date=30 March 2014 }}</ref><ref name="Aust-2014-03-28">{{cite news |url=http://www.theaustralian.com.au/news/nation/parasitic-exunion-boss-michael-williamson-jailed-for-fraud/story-e6frg6nf-1226867439092 |title=Williamson jailed for fraud |author=Norington, Brad |work=The Australian |date=28 March 2014 |access-date=30 March 2014 |agency=Australian Associated Press}}</ref><ref name="ABC-2014-03-28">{{cite news |url=http://www.abc.net.au/news/2014-03-28/michael-williamson-sentencing-hearing-begins-over-hsu-fraud/5351400 |title=Michael Williamson jailed over 'parasitic plundering' of Health Services Union funds |author=Wells, Jamelle |date=28 March 2014 |work=ABC News |location=Australia |access-date=30 March 2014 }}</ref>

{{As of|2014|03|28}} civil proceedings against Thomson and Williamson were pending.

== Background ==
The Health Services Union (HSU) was officially formed in 1991 by the amalgamation of the Hospital Employees' Federation (HEF) and the Health and Research Employees Association (HREA). The specialist trade union had around {{formatnum:70000}} members working in all areas of healthcare across Australia as at 2013.<ref name=anatomy>{{cite news |url=http://www.abc.net.au/news/2012-05-03/the-hsu-anatomy-of-a-labor-nightmare/3986558 |title=The HSU: anatomy of a Labor nightmare |date=26 April 2013 |work=ABC News |access-date=27 February 2014 }}</ref> The membership of the union includes [[Medicine:Physician|doctors]], nurses and allied health professionals such as physiotherapists and radiographers, ambulance officers, clerical and administrative staff, managers and support staff in the health and aged care sectors.<ref>{{cite news |url=http://www.abc.net.au/news/2012-05-03/the-hsu-anatomy-of-a-labor-nightmare/3986558 |title=HSU: Anatomy of a Labor nightmare |work=ABC News |date=15 May 2012 |access-date=24 June 2012}}</ref><ref>{{cite news |url=http://www.smh.com.au/opinion/political-news/call-for-administrator-as-hsu-membership-plummets-20120425-1xln6.html |title=Call for administrator as HSU membership plummets |work=The Sydney Morning Herald |access-date=24 June 2012 |date=26 May 2012 }}</ref> The HSUeast branch, covering New South Wales, Victoria, and the Australian Capital Territory, was controversially formed in 2010, following years of factional fighting between leadership teams from the HSU New South Wales, HSU Victorian No. 1 and No. 3 branches.<ref name="crikey2010">{{cite news |url=http://www.crikey.com.au/2010/04/07/health-services-union-in-controversial-merger/ |title=Health Services Union in controversial merger |date=7 April 2010 |access-date=2 March 2014 |author=Crook, Andrew |work=Crikey }}</ref>

Thomson started his career representing hospital and ambulance workers in New South Wales as an industrial officer for the HREA. He became head of the HREA Industrial Department. He was subsequently elected to the position of Assistant Secretary.<ref>{{cite web|url=http://www.ambulancecover.com.au/ambulance-cover-articles/2001/2/24/ambulance-officers-on-strike-alert/|title=Ambulance Officers on Strike Alert|date=4 February 2001|work=The Sydney Morning Herald|author=Jacobsen, Geesche |access-date=24 January 2010}}</ref> In 2002, Thomson was elected as the national secretary of the HSU.<ref name=timeline/> After a seemingly successful career in the union movement, Thomson was endorsed as Labor's candidate for the federal seat of Dobell on the NSW Central Coast and won the seat at the 2007 federal election.<ref name=timeline/><ref>{{cite web|title=Labor wins marginal Dobell|url=http://www.abc.net.au/news/stories/2007/11/24/2100296.htm|date=24 November 2007|publisher=ABC News|access-date=24 January 2010}}</ref> He was re-elected as the Member for Dobell in 2010, representing Labor.

Williamson rose to prominence as an official of the HSU, representing the interests of low-paid workers in the health sector in New South Wales and then Australia. Williamson was general secretary of HSU NSW branch, later to become HSUeast, serving in this role between 1997<ref name="SMH-2011-09-09">{{cite news |url=http://www.smh.com.au/national/thomson-new-credit-card-claims-20110908-1jzz2.html |title=Thomson: new credit card claims |date=9 September 2011 |author=McClymont, Kate |work=The Sydney Morning Herald |access-date=19 February 2014 }}</ref> until June 2012. He was elected as the inaugural national president of the union in 2003<ref>{{cite speech |title=Address by National President to annual conference dinner |first=Michael |last=Williamson |event=First national conference of the Health Services Union |location=Sydney |date=6 May 2003 |url=http://www.hsu.net.au/speeches/1059366759_7138.html |accessdate=19 February 2014 |url-status=dead |archiveurl=https://web.archive.org/web/20140227222957/http://www.hsu.net.au/speeches/1059366759_7138.html |archivedate=27 February 2014}}</ref> until October 2011. During his term as national president he controversially merged the NSW and two Victorian branches of the union to create HSUeast.<ref name="crikey2010"/> He was elected as the national president of the Australian Labor Party, serving between 2009 and 2010; and was a vice president of NSW Labor.<ref>{{cite news |author=Rainford, John |title=Union corruption rips off workers |work=Green Left Weekly |url=https://www.greenleft.org.au/node/55481 |date=27 November 2013 |access-date=19 February 2014 }}</ref> Williamson was also a vice president of Unions NSW until April 2012. He was a member of the national executive of the Australian Council of Trade Unions (ACTU);<ref name=afr/> a trustee of First State Super; and a non-executive director of SGE Credit Union,<ref name=afr>{{cite news |title=Super fund can't sack HSU boss |work=The Australian Financial Review |url=http://www.afr.com/p/national/super_fund_can_sack_hsu_boss_g4LAQFHmbBuSnd83R9vguI |author=Patten, Sally |date=11 April 2012 |access-date=19 February 2014 }}</ref> a [[Social:Credit union|credit union]] for NSW Government [[Social:Civil service|employees]].

Following Thomson's move into politics, his successor as national secretary was Kathy Jackson, a protege of Williamson.<ref name=anatomy/><ref name="crikey2010"/> Jackson rose through the ranks of the HSUeast branch and its predecessors in Victoria, and was aligned with Labor's moderate Unity faction. Jackson's former husband, Jeff Jackson, was general secretary of the Victorian branch of the HSU, that had been placed into [[Finance:Administration (law)|administration]] in 2009 by the Federal Court after tensions between factional parties could not be resolved.<ref name="crikey2010"/>

== Allegations of impropriety ==
In January 2008, members of the National Executive identified financial irregularities in Thomson's union credit card statement. Further investigation showed that members' money was being spent on prositiution services. The National Executive directed the then National Secretary Katherine Jackson (née Koukouvaos) to engage forensic auditors to investigate the matter further. Jackson long resisted these calls, however, after some months she eventually recognised that it was impossible to continue in this way. She finally took steps to engage external external auditors to investigate further. Reporting in May, the audit raised "concerns about evidence of misuse of union funds by Mr Thomson."<ref name=timeline>{{cite news |url=http://www.heraldsun.com.au/news/national/the-craig-thomson-case/story-fndo48ca-1226502036282 |agency=Australian Associated Press|date=31 December 2013 |title=Timeline of HSU credit card affair |work=Herald Sun |access-date=20 February 2014 }}</ref> In December, the union engaged tax specialists BDO Kendall to "conduct an investigation" over the alleged improper use of Thomson's union-issued corporate credit card. ''The Sydney Morning Herald'' revealed the allegations in April 2009; Thomson denied all wrongdoing and stated that an independent audit had not identified any inappropriate use of the card, noted that other people would have been able to incur charges on the account, and said the accusations had been fabricated by rivals within the HSU.<ref name=SMHdavis/>

{{quotation|In 2007 Craig Thomson left the national office. The financial reports had not been put in. I then attempted to put those reports in, but not under my signature because I could not sign off on them because we'd found allegations of corruption in our union. So therefore, I wrote to Fair Work Australia seeking their advice about how to handle this issue and I followed their advice. I followed other professionals' advice, including the auditors and the union solicitors. And for them to come out now and to say that I didn't put the report in <!-- not a mistake-->in time when I actually followed their process is totally outrageous and scandalous on their part.|Kathy Jackson, as general secretary of the Health Services Union of Australia, 7 May 2012<ref name=anatomy/> }}

=== Inquiries by Australian government agencies ===
Fair Work Australia, the federal [[Finance:Industrial relations|workplace relations]] regulator and tribunal, conducted a three-year investigation into improprieties in the use of union funds involving both the Victorian No. 1 Branch, and the national office of the HSU.<ref name=Onthecard/> On 23 December 2011, the appointed investigator, Terry Nassios, produced the Victoria No.1 report, which was publicly released publicly on 16 March 2012.<ref name=HSUVic1>{{cite news|last=Wright|first=Jessica|title=Damning report of misuse of funds in health union|url=http://www.theage.com.au/opinion/political-news/damning-report-of-misuse-of-funds-in-health-union-20120316-1vauc.html#ixzz1yUT38tOn|newspaper=The Age|date=17 March 2012}}</ref> The report, consisting of 183 findings, was tabled in the Senate on 7 May 2012. Within this report, 153 findings pertained to Thomson's breaches of union rules and sections 237(1), 285(1), 286(1), and 287(1) of Schedule 1 of the {{Cite Legislation AU|Cth|act|wraraoa|Workplace Relations Amendment (Registration and Accountability of Organisations) Act 2002}}.<ref name=Onthecard>{{cite news|last=Higgins|first=Ean|title=Escorts and campaign funds 'put on Craig Thomson's card'|url=http://www.theaustralian.com.au/national-affairs/industrial-relations/escorts-and-campaign-funds-put-on-craig-thomsons-card/story-fn59noo3-1226349339192|access-date=14 June 2012|newspaper=The Australian|date=8 May 2012}}</ref><ref name=FWAReportCashPro>{{cite web|last=Nassios|first=Terry |title=Investigation into the National Office of the Health Services Union|url=http://resources.news.com.au/files/2012/05/07/1226349/136447-fwa-report.pdf|work=Report of the Delegate to the General Manager of Fair Work Australia|publisher=Fair Work Australia|access-date=10 May 2012|page=133}}</ref>

The Fair Work Australia investigations were criticised for failing to investigate the finances of the HSU following a petition in July 2009 by the members of HSU No. 4 Branch.<ref name=FWA>{{cite news|last=Millar|first=Royce|title=Fair Work refused to investigate HSU books|url=http://www.theage.com.au/national/fair-work-refused-to-investigate-hsu-books-20110912-1k63i.html|access-date=7 June 2012|newspaper=The Age|date=13 September 2011}}</ref> On 15 October 2012 Fair Work Australia launched civil proceedings against Thomson related to his use of HSU funds. Thomson stated that he would contest these charges.<ref name="FWA begins court action">{{cite news|last=Cullen|first=Simon|title=Fair Work begins court action against Thomson|url=http://www.abc.net.au/news/2012-10-15/fair-work-begins-federal-court-proceedings-against-craig-thomson/4313948|access-date=15 October 2012|newspaper=ABC News |location=Australia |date=15 October 2012}}</ref>

Following the release of the Fair Work Australia report, the Australian Federal Police commenced investigations. Thomson claimed he was not one of the five people of interest.<ref name="damned">{{cite news |last=Lane |first=Sabra |title=Fair Work report finds Thomson misused union funds |url=http://www.abc.net.au/news/2012-05-07/fair-work-report-into-hsu-released/3996274 |work=ABC News |location=Australia |access-date=7 May 2012}}</ref><ref>{{cite news |url=http://www.adelaidenow.com.au/news/breaking-news/i-am-not-a-person-of-interest-thomson/story-e6frea7l-1226488359487 |title=I am not a person of interest: Thomson |agency=AAP |work=Adelaide Advertiser |date=4 October 2012 }}</ref><ref>{{cite news |url=http://www.news.com.au/national/michael-williamson-arrested-and-charged-over-hindering-hsu-probe/story-fndo4bst-1226487850458 |title=Michael Williamson arrested and charged over hindering HSU probe |work=News.com.au |date=4 September 2012 }}</ref>

=== Other investigations ===
In 2011 the Union Council of the HSUeast branch resolved to commence an investigation into the financial affairs of the branch; and sought counsel from the President of the New South Wales Bar Association to select an independent panel of experts to investigate:<ref name=tembyinterim>{{cite news |url=http://www.abc.net.au/news/2012-04-30/temby-report/3981300 |author1=Temby, Ian |author2=Robertson, Dennis|title=Interim Report by Ian Temby QC and Dennis Robertson FCA to the Union Council of HSUeast and for their eyes only |date=26 April 2012 |work=ABC News |location=Australia |access-date=27 February 2014 }}</ref>
* adequacy of governance arrangements and business practices of HSUeast;
* access to financial and business related information for union members to ensure transparency and scrutiny;
* policies and procedures and potential conflicts of interest for office bearers, or staff that hold directorships or shares/ownership in companies that supply goods to HSUeast;
* policies around the use of HSUeast credit cards; and
* other matters the panel deems appropriate.

Following an interim report delivered in April 2012 and a final report delivered in July 2012, Ian Temby {{post-nominals|country=AUS|AO|QC}} and Dennis Robertson, an accountant, found that $20&nbsp;million was paid by HSUeast without any form of tendering or contract. This included $5&nbsp;million paid to companies operated by Williamson and his wife.<ref name=tembyinterim/><ref name=tembyfinal>{{cite web |url=http://progressivepsa.org/pdf/hsueast_temby_report_final_full_july2012.pdf |author1=Temby, Ian |author2=Robertson, Dennis|title=Final Report on HSUeast by Ian Temby QC and Dennis Robertson FCA |date=3 July 2012 |publisher=Public Service Association of NSW |access-date=27 February 2014 |archive-url=https://web.archive.org/web/20140227144647/http://progressivepsa.org/pdf/hsueast_temby_report_final_full_july2012.pdf |archive-date=27 February 2014 |url-status=dead }}</ref> Prime Minister Julia Gillard commented that "It's clear that there have been real problems at the HSU. That’s distressing I think to everyone who cares about working people."<ref>{{cite news|url=http://www.smh.com.au/opinion/political-news/pm-distressed-by-explosive-report-into-hsu-rorts-20120724-22mb2.html|title=PM 'distressed' by explosive report into HSU rorts|work=The Sydney Morning Herald|date=24 July 2012|access-date=30 July 2012 |author1=Ireland, Judith |author2=Willingham, Richard }}</ref>

Meanwhile, NSW Police officers raided the union's Sydney office on 2 May 2012, seizing documents and computers as part of the "Strike Force Carnarvon" investigation into secret commissions allegedly received by Williamson and Thomson. Williamson was intercepted in a basement attempting to remove a bag of documents.<ref>{{cite news|url=http://www.sbs.com.au/news/article/1646985/Game-over-for-Williamson-says-HSU|title='Game over' for Williamson, says HSU|work=SBS News|access-date=27 June 2012|date=2 May 2012}}</ref><ref>{{cite news|url=http://www.theaustralian.com.au/national-affairs/in-depth/police-extend-probe-on-hsu/story-fndsip4d-1226396009528|title=Police extend probe on HSU|work=The Australian|access-date=27 June 2012|date=15 June 2012}}</ref>

== Credit card misuse by an official of the HSU national office ==

The report by Fair Work Australia (FWA) concluded that Thomson had spent almost ${{formatnum:270000}} of union members' funds on his 2007 election federal campaign for Dobell. This included ${{formatnum:200000}} for two political staff members who worked on the campaign, and another ${{formatnum:71000}} directly expended on the campaign. Other money, including from Thomson's union credit card, was used to pay for office supplies including furniture and utility connections.<ref name=FWAReportCashPro/><ref name=Buyingseat>{{cite news |last=Jones |first=Gemma |title=HSU cash spent on election campaign |url=http://www.dailytelegraph.com.au/news/hsu-cash-spent-on-election-campaign/story-e6freuy9-1226349270733 |access-date=17 May 2012 |newspaper=Daily Telegraph |location=Australia |date=8 May 2012}}</ref> Following his election in 2007 as the Member for Dobell,<ref name="psephos">{{cite web|url=http://psephos.adam-carr.net/countries/a/australia/2007/2007repsnsw.txt |title=Commonwealth of Australia Legislative Election, Dobell |date=24 November 2007 |access-date=24 January 2010 |author=Carr, Adam |work=Psephos }}</ref> Thomson resigned from the HSU on 14 December 2007. On 18 May 2012 it was reported that Terry Nassios, the FWA investigator stated that he was unsure if some payments by Thomson had been made on the card after that date and that he recommended the payments after the resignation date be reported to the public prosecutor for investigation.<ref name=Spendingon>{{cite news|last=Nicholson|first=Brendan|title=Craig Thomson still spending long after departure from HSU|url=http://www.theaustralian.com.au/national-affairs/industrial-relations/thomson-still-spending-long-after-departure-from-hsu/story-fn59noo3-1226349331251|access-date=17 May 2012|newspaper=The Australian|date=8 May 2012}}</ref>

During Question Time on 16 August 2011, Prime Minister Gillard was asked if her confidence in Thomson was based on a thorough investigation of his credibility. She replied, "I have complete confidence in the member for Dobell. I look forward to him continuing to do that job for a very long, long, long time to come."<ref name=CompCon>{{cite news |last=Sheehan |first=Paul |title=Thomson saga sinks Labor into the abyss|url=http://www.smh.com.au/opinion/politics/thomson-saga-sinks-labor-into-the-abyss-20110821-1j4im.html |access-date=16 May 2012 |newspaper=The Sydney Morning Herald |date=22 August 2011}}</ref> Gillard later moved to suspend Thomson from the Labor Party on 29 April 2012, saying "At the moment, Australian voters see a dark cloud over Parliament. I have made a judgment about the Parliament and about respect for the Parliament.  There is a line which has been crossed here." She said the decision was solely hers but that Thomson agreed with her. Later he stated that he had had different reasons for leaving the party than those given by the Prime Minister.<ref name="Thomson suspended"/><ref name=PMSack>{{cite web|url=http://www.news.com.au/national/thomson-to-quit-labor-sky-news/story-e6frfkw9-1226341848777|title='A line has been crossed' - Prime Minister sidelines controversial MPs|work=Sky News |location=Australia |access-date=26 June 2012|date=29 April 2012}}</ref>

In an address to the House on 21 May 2012 Thomson said that there were credit cards which showed expenditure on escorts and prostitutes for at least two other officials.<ref name=HansardJ>{{cite Hansard|title=Hansard, May 21, 2012 |url=http://parlinfo.aph.gov.au/parlInfo/genpdf/chamber/hansardr/abc2c0c8-7187-4566-b4d3-a8f9194f0813/0084/hansard_frag.pdf;fileType=application%2Fpdf |jurisdiction=Commonwealth of Australia | house=House of Representatives |accessdate=8 June 2012|date=21 May 2012}}</ref><ref name=Thomsonspeech/> He implied that Jeff Jackson, a former HSU executive member and the former husband of Kathy Jackson, the HSU national secretary, was one of two officials responsible for the spending on prostitutes, a claim earlier made by HSU branch president Pauline Fegan.<ref name=Fegan2009>{{cite news|last=Wallace|first=Rick|title=Second Labor figure Jeff Jackson embroiled in union brothel scandal |url=http://www.theaustralian.com.au/news/second-labor-figure-in-brothel-scandal/story-e6frg6n6-1225696993824|access-date=8 June 2009|newspaper=The Australian|date=9 April 2009}}</ref> Thomson's allegations were rejected by the union figures he named as being able to support his claims, including his half-brother, former union official Struan Robertson.<ref>{{cite news|url=http://www.heraldsun.com.au/news/victoria/half-brother-refuses-to-support-craig-thomson/story-fn7x8me2-1226363918298|title=Half-brother refuses to support Craig Thomson|work=Herald Sun|date=23 May 2012|access-date=18 July 2012}}</ref><ref name=conversationhip/> Thomson questioned the impartiality of the investigation. Michael Lawler the Vice President of FWA was involved in internal HSU politics at the request of his partner Kathy Jackson. Jackson allegedly supplied most of the documents used by the FWA in its HSU national office investigation.<ref name=FWA2>{{cite news|last=Uhlmann|first=Chris|title=Senior Fair Work official embroiled in HSU fighting|url=http://www.abc.net.au/news/2012-05-28/fair-work-australia-vice-president-deeply-involved-in-hsu-fight/4038274|access-date=7 June 2012|newspaper=ABC News|location=Australia|date=29 May 2012}}</ref>

Nassios, citing a newspaper report, stated ${{formatnum:15000}} had been repaid by Jeff Jackson in settlement of three payments of ${{formatnum:5000}} identified as "back pay" dishonestly claimed.<ref name=NotJeff>{{cite news|last=Schneiders|first=Ben|title=Chief of strife-torn union promises to pay back $15,000 |url=http://www.theage.com.au/national/chief-of-strifetorn-union-promises-to-pay-back-15000-20090703-d7v1.html|access-date=17 May 2009|newspaper=The Age|date=4 July 2009}}</ref> When asked by Fair Work Australia to clarify if this claim pertained to Jackson, Thomson declined to provide any details, citing legal advice.<ref name=Fegan2012>{{cite news|last=Rout|first=Milanda|title=No mention of old, discredited excuse in Thomson's speech|url=http://www.theaustralian.com.au/national-affairs/in-depth/no-mention-of-old-discredited-excuse-in-thomsons-speech/story-fndsip4d-1226362844108|access-date=14 June 2012|newspaper=The Australian|date=22 May 2012}}</ref> On 15 October 2012 Fair Work Australia launched civil proceedings against Thomson related to his misuse of HSU funds. Thomson stated that he would contest these charges.<ref name="FWA begins court action" />

Thomson was later arrested, charged with 140 offences relating to theft and fraud, and trialled by judge in the Melbourne Magistrates Court. On 18 February 2014 he was found guilty of theft from the HSU and of defrauding the HSU. Thomson had misused his union credit card to pay for prostitutes, travel expenses and cigarettes, and for accommodation and dinners even after he'd left the union to run for Parliament.<ref name="Austguilty"/><ref name="SMHguilty"/><ref name="SMHguilty1"/><ref name="ABCpmguilty"/>

On 25 March 2014, Thomson was sentenced to 12 months imprisonment with nine months suspended for two years. Magistrate Charlie Rozencwajg said Thomson shown "arrogance in the extreme", a "breach of trust of the highest order" in misusing members' funds and said Thomson had shown no remorse. The magistrate also said "Nothing has been put before me to suggest that these offences were committed for anything other than greed".<ref name="ABC-2014-03-25">{{cite news |url=http://www.abc.net.au/news/2014-03-25/craig-thomson-fraud-hsu-sentencing/5342428 |title=Craig Thomson: Former Labor MP sentenced for defrauding Health Services Union |date=25 March 2014 |work=ABC News |location=Australia |access-date=25 March 2014}}</ref> Thomson was granted bail to appear in the Victorian County Court on 24 November to appeal both his conviction and sentence.<ref name="HS-2014-03-25">{{cite news |url=http://www.heraldsun.com.au/news/law-order/former-mp-craig-thomson-sentenced-to-three-months-jail/story-fni0fee2-1226863919858 |title=Former MP Craig Thomson sentenced to three months' jail |date=25 March 2014 |work=The Herald Sun |access-date=25 March 2014}}</ref><ref name="SMH-2014-03-25">{{cite news |url=http://www.smh.com.au/federal-politics/political-news/craig-thomson-sentenced-to-12-months-jail-nine-months-suspended-20140325-35f67.html#ixzz2xS9PgXJQ |title=Craig Thomson sentenced to 12 months' jail, nine months suspended |work=The Sydney Morning Herald |author=Cooper, Adam |date=25 March 2014 |access-date=25 March 2014 }}</ref><ref name="Aust-2014-03-25">{{cite news |url=http://www.theaustralian.com.au/national-affairs/policy/craig-thomson-bailed-ahead-of-appeal-over-jail-sentence-for-hsu-fraud/story-fn59noo3-1226863996174 |title=Craig Thomson bailed ahead of appeal over jail sentence for HSU fraud |work=The Australian |author=Akerman, Pia |agency=Australian Associated Press|date=25 March 2014 |access-date=25 March 2014 }}</ref> Following his conviction and sentencing, on 4 April 2014 the New South Wales branch of the Labor Party expelled Thomson as a member of the party.<ref name=SMHexpel>{{cite news |url=http://www.smh.com.au/nsw/labor-party-expels-michael-williamson-craig-thomson-20140404-363f5.html |title=Labor Party expels Michael Williamson, Craig Thomson |author=Nicholls, Sean |date=4 April 2014 |access-date=6 April 2014 |work=The Sydney Morning Herald }}</ref><ref name=ABCexpel>{{cite news |url=http://www.abc.net.au/news/2014-04-04/labor-party-expels-michael-williamson-and-craig-thomson/5368574 |title=Former HSU officials Michael Williamson and Craig Thomson expelled from Labor Party |work=ABC News |location=Australia |date=4 April 2014 |access-date=6 April 2014 }}</ref> Thomson was proven guilty of thirteen charges of theft, convicted, and fined A$25,000.<ref name="Age-2014-12-17">{{cite news|url=http://www.theage.com.au/federal-politics/political-news/craig-thomson-convicted-and-fined-25000-20141217-1294ha.html|title=Craig Thomson convicted and fined $25,000|work=The Age|date=17 December 2014|access-date=17 December 2014|author=Cooper, Adam}}</ref><ref name="ABC-2014-12-17">{{cite news|url=http://www.abc.net.au/news/2014-12-17/craig-thomson-fined-escapes-jail-time-over-hsu-theft/5972518|title=Craig Thomson appeal: Former federal MP escapes prison term over theft from Health Services Union|work=ABC News|location=Australia|date=17 December 2014|access-date=17 December 2014}}</ref><ref name="ABC-2014-12-15"/>

== Financial irregularities within the HSUeast branch ==
Allegations of improprieties in the HSUeast branch were first publicly revealed in ''The Sydney Morning Herald'' on 9 September 2011. It was alleged the Thomson (whilst serving as national secretary to the HSU) and Williamson (as the general secretary of the HSUeast) received [[Social:Secret profit|secret commissions]] from a major supplier to the union. The supplier, that produces ten issues of the union's newsletter, ''Health Standard'', at a price estimated to be ten times the amount for similar productions, provided both Thomson and Williamson with credit cards that were used for personal expenses, such as private school fees.<ref name="SMH-2011-09-09"/> This was the first occasion that Williamson was implicated in any matter. The media report detailed that Williamson was a director of a computer company, United Edge, that provided information technology services to the HSUeast branch, without going to competitive tender. This decision was made while Williamson was general secretary of HSUeast.<ref name="SMH-2011-09-09"/>

Following the public airing of allegations, Williamson's position as national president of the HSU became untenable, and he was suspended as president in October 2011.<ref>{{cite news |url=http://www.abc.net.au/news/2012-04-09/hsu-executives-want-president27s-scalp/3939570 |title=HSU executives want president's scalp |work=ABC News |date=9 April 2012 |access-date=19 February 2014 |location=Australia }}</ref> In April 2012 he resigned as president from Unions NSW after being asked to explain to its executive why he should not be removed.<ref>{{cite news |url=http://www.abc.net.au/news/2012-04-12/williamson/3946368 |title=HSU boss quits as Unions NSW president |work=7.30 |publisher=ABC TV |location=Australia |author=Cooper, Hayden |format=transcript |date=13 April 2012 |access-date=19 February 2014 }}</ref><ref>{{cite news |url=http://www.abc.net.au/news/2012-04-13/unions-nsw-boss-welcomes-williamson-resignation/3947914 |title=Unions NSW boss welcomes Williamson's resignation |work=ABC News |location=Australia |date=13 April 2012 |access-date=19 February 2014 }}</ref> Williamson's position as the general secretary of HSUeast was dissolved when the Federal Court declared all elected positions vacant in June 2012; appointing an administrator to run the union's affairs.<ref name="Austadminappointed">{{cite news |url=http://www.theaustralian.com.au/national-affairs/federal-court-splits-up-hsu-east-branch-sacks-leaders-refuses-kathy-jackson-bid/story-fn59niix-1226404247338# |title=Federal Court splits up HSU East branch, sacks leaders, refuses Kathy Jackson bid |author=Higgins, Ean |date=21 June 2012 |work=The Australian |access-date=24 June 2012}}</ref>

The final Temby report, delivered in July 2012 at the request of the HSUeast Union Council, made findings that Williamson engaged in irregularities, such as placing family members in union jobs, paying inflated prices for services, and heading United Edge, a company supplying information technology services to the union.<ref name=tembyinterim/><ref name=tembyfinal/><ref>{{cite news|url=http://www.abc.net.au/news/2012-05-01/actu-responds-to-hsu-report/3981706 |title=ACTU Responds to HSU Report |date=1 May 2012 |access-date=24 June 2012 |work=ABC News |location=Australia }}</ref><ref>{{cite news|url=http://www.theaustralian.com.au/national-affairs/opinion/foul-stench-from-snouts-in-hsu-trough/story-e6frgd0x-1226321650196|title=Foul stench from snouts in HSU trough|work=The Australian|access-date=24 June 2012|date=9 April 2012 |author=Richardson, Graham |authorlink=Graham Richardson }}</ref><ref>{{cite news|url=http://www.smh.com.au/nsw/health-union-boss-losing-his-empire-20120407-1wi72.html|title=Health union boss losing his empire|access-date=25 June 2012|date=8 April 2012|work=The Sydney Morning Herald }}</ref><ref>{{cite news|url=http://www.news.com.au/national/michael-williamson-quits-unions-nsw-position/story-e6frfkvr-1226325350130|title=Michael Williamson quits Unions NSW position|work=The Daily Telegraph|date=13 April 2012|access-date=17 July 2012}}</ref>

On 4 October 2012, Williamson was charged with more than 50 offences relating to fraud and obstruction of justice, and was suspended as director of United Edge.<ref>{{cite news |work=The Sydney Morning Herald |title=Former union boss Michael Williamson charged |url=http://www.smh.com.au/national/former-union-boss-michael-williamson-charged-20121004-270fo.html |date=4 October 2012 |last=McClymont |first=Kate }}</ref> Appearing before the Sydney Magistrates Court on 15 October 2013, Williamson entered a guilty plea to four major charges related to cheating and defrauding the HSU East branch, creating false documents with the intention to deceive and the recruiting of others to hinder a police investigation. All other charges were dropped.<ref name="SMH-2013-10-15"/> No charges were laid against Williamson's wife or family members.<ref>{{cite news |title=Labor bloodletting has just begun as corruption shockwaves rock the party |work=The Daily Telegraph |url=http://www.dailytelegraph.com.au/news/nsw/labor-bloodletting-has-just-begun-as-corruption-shockwaves-rock-the-party/story-fni0cx12-1226741305526 |date=17 October 2013 |access-date=2 March 2014 |author=Clennell, Andrew }}</ref> On 3 March 2014, legal counsel for Williamson declined to seek a bail extension and Williamson was imprisoned. He was sentenced in the District Court of New South Wales on 28 March 2014 to seven{{endash}}and{{endash}}a{{endash}}half years of imprisonment; with a non{{endash}}parole period of five years, ending in March 2019.<ref name="SMH-2014-03-28"/><ref name="Aust-2014-03-28"/><ref name="ABC-2014-03-28"/> Following his conviction and imprisonment, on 4 April 2014 the New South Wales branch of the Labor Party expelled Williamson as a member of the party.<ref name=SMHexpel/><ref name=ABCexpel/>

== Suspension of the HSU from the Australian Council of Trade Unions ==
In April 2012 the Australian Council of Trade Unions voted<ref name=Overwhelm>The vote in support was 1 797 to 103 opposed, a 94.5% ratio.</ref> to suspend the membership of the HSU on the basis of corruption.<ref>{{cite web|url=http://www.abc.net.au/news/2012-04-05/actu-suspends-health-services-union/3935476|title=ACTU suspends Health Services Union|publisher=ABC News|access-date=26 June 2012|date=5 April 2012}}</ref> Following government action, the Federal Court of Australia removed the union's national executive and appointed judge Michael Moore as administrator.<ref name="Austadminappointed"/>

On 15 May 2012, ACTU president Ged Kearney addressed the ACTU congress on the HSU scandal. "I know I speak for everyone in this room when I say that misuse of member's money and contempt for the accountability to members are unacceptable", she said. Union figure Paul Howes stressed the positive, addressing the congress:<ref name=ACTUCong>{{cite news|last=Cullen|first=Simon|title=Gillard pledges allegiance amid HSU scandal|url=http://www.abc.net.au/news/2012-05-15/gillard-disgusted-by-hsu-scandal/4012312|access-date=16 May 2012|newspaper=ABC News|date=16 May 2012}}</ref><ref name=Fingerpointing>{{cite news|last=Iggulden|first=Tom|title=Kelty points finger at Labor amid union woes|url=http://www.abc.net.au/news/2012-05-17/kelty-points-finger-at-labour-amid-union-woes/4015988|access-date=17 May 2012|newspaper=ABC News|date=17 May 2012}}</ref>
{{quotation|"I'm actually pleased that we know that this happened because it's the lesson for us is making sure it never happens again and never allowing a couple of disgusting individuals get away with stealing money out of the pockets of hard-working, low-paid health workers or any other union members in this country.....
"If we have a dodgy trade union official who rips off those workers, we need to hunt them down too, hunt them down too to make sure they pay back what they took from the hardworking men and women of the Health Services Union."|Paul Howes, senior union official, at the 2012 ACTU congress.}}
Gillard said of the HSU's impact on the Australian union movement's reputation, "...the very poor conduct of one union risks tarnishing that reputation."<ref name=Disgust>{{cite news|last=Lucas|first=Clay|title=Gillard hits out at Abbott, HSU|url=http://www.smh.com.au/opinion/political-news/gillard-hits-out-at-abbott-hsu-20120515-1yod6.html|access-date=16 May 2012|newspaper=The Sydney Morning Herald|date=15 May 2012}}</ref>

== Political ramifications ==
Gillard spoke in support of a parliamentary code of conduct, saying, "I do want to see members of Parliament always doing the right thing. There are various rules now for members of Parliament but I'm obviously open to suggestions that we have a code of conduct." Independent MP Tony Windsor flagged action along with Rob Oakeshott to increase Parliament's powers to deal with cases such as Thomson's. "I think that there is a need for, if people are proven to be guilty in some of these circumstances, that Parliament may need some greater power or have a process where they actually leave the building", he said.<ref name=GillardCode>{{cite news|title=Gillard flags code of conduct amid Thomson affair|url=http://www.abc.net.au/news/2012-05-13/gillard-flags-mps-code-in-wake-of-thomson-affair/4008356|access-date=17 May 2012|newspaper=ABC News|date=14 May 2012}}</ref>

In April 2012 Thomson asked to be suspended from the Labor Party after a discussion with Gillard, and announced his intention to sit on the crossbench as an independent member of parliament.<ref name="Thomson suspended">{{cite news |url=http://www.abc.net.au/news/2012-04-29/craig-thomson-leaves-labor-party/3978614 |title=Embattled Thomson suspended from Labor Party |work=ABC News |location=Australia |date=29 April 2012 |access-date=7 May 2012}}</ref> In a statement to the House on 21 May 2012, Thomson professed his innocence and used [[Social:Parliamentary privilege|parliamentary privilege]] to name a number of individuals and claim that he was set up.<ref name=Thomsonspeech>{{cite news |url=http://www.smh.com.au/federal-politics/political-news/craig-thomsons-full-address-to-parliament-20120521-1z0vj.html |title=Craig Thomson's full address to Parliament |date=21 May 2012 |work=The Sydney Morning Herald |access-date=26 February 2014 }}</ref><ref name=conversationhip>{{cite news |url=http://theconversation.com/craig-thomson-shoots-from-the-hip-in-speech-to-parliament-7150 |title=Craig Thomson shoots from the hip in speech to parliament |author=Ghazarian, Zareh |date=21 May 2012 |access-date=26 February 2014 |work=The Conversation }}</ref> He recontested his seat at the 2013 federal election, but lost to the Liberals' Karen McNamara.<ref>{{cite news |work=Central Coast Advocate |url=http://www.dailytelegraph.com.au/newslocal/central-coast/dobell-mp-craig-thomson-concedes-defeat-as-liberals-look-set-to-win-dobell-and-robertson/story-fngr8h0p-1226714152265 |title=Dobell MP Craig Thomson concedes defeat as Liberals look set to win Dobell and Robertson }}</ref>

In February 2014 the coalition government announced a proposed Royal Commission into trade union governance and corruption to inquire into alleged financial irregularities associated with the affairs of trade unions. The HSU was one of five unions named in the commission's proposed terms of reference.<ref name="agd-pressrel-20131212">{{cite press release |author1=Abbott, Tony (Prime Minister) |author2=Abetz, Eric (Minister for Employment) |author3=Brandis, George (Attorney-General) |authorlink3=George Brandis |date=10 February 2014 |title=Royal Commission into trade union governance and corruption |url=http://www.pm.gov.au/media/2014-02-10/royal-commission-trade-union-governance-and-corruption |location=Canberra |publisher=Commonwealth of Australia |access-date=10 February 2014 |archive-url=https://web.archive.org/web/20140211220938/http://www.pm.gov.au/media/2014-02-10/royal-commission-trade-union-governance-and-corruption |archive-date=11 February 2014 |url-status=dead }}</ref><ref>{{cite news |url=http://www.sbs.com.au/news/article/2014/02/10/five-unions-named-royal-commission |title=Five unions named in royal commission |date=10 February 2014 |work=SBS World News |publisher=SBS |agency=AAP |access-date=10 February 2014 }}</ref> Following criminal proceedings where Thomson was found guilty of theft and fraud charges, the Federal Parliament voted in favour of a motion of "regret" and apologised to the individuals named in Thomson's statement to the House on 21 May 2012. The matter was also referred to Parliament's Privileges Committee to investigate whether Thomson deliberately misled the House.<ref>{{cite news |title=Federal Parliament delivers apology over Craig Thomson scandal |url=http://www.abc.net.au/news/2014-02-25/thomson-apology-parliament/5283648 |author=Griffiths, Emma |date=25 February 2014 |access-date=26 February 2014 |work=ABC News |location=Australia }}</ref>

==References==
{{reflist|30em}}

== External links ==
* {{cite web|url= http://resources.news.com.au/files/2012/05/07/1226349/136447-fwa-report.pdf |title=Report of the Delegate to the General Manager of Fair Work Australia -Investigation into the National Office of the Health Services Union under section 331 of the ''Fair Work (Registered Organisations) Act 2009'' - 7 May 2012 }}&nbsp;{{small|(7396KB)}}
* [http://www.aec.gov.au/about_aec/media_releases/2012/16-05.htm AEC releases analysis of Fair Work Australia report] ''Australian Electoral Commission, 16 May 2012.''
* [http://www.heraldsun.com.au/news/national/the-craig-thomson-case/story-fndo48ca-1226502036282 Timeline of HSU credit card affair.]
* {{cite web |url=http://progressivepsa.org/pdf/hsueast_temby_report_final_full_july2012.pdf |author1=Temby, Ian |author2=Robertson, Dennis|title=Final Report on HSUeast by Ian Temby QC and Dennis Robertson FCA |date=3 July 2012 |publisher=Public Service Association of NSW |access-date=27 February 2014 |archive-url=https://web.archive.org/web/20140227144647/http://progressivepsa.org/pdf/hsueast_temby_report_final_full_july2012.pdf |archive-date=27 February 2014 |url-status=dead }}

[[Category:Financial scandals]]

{{Sourceattribution|Health Services Union expenses affair}}