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| ]The '''Craig Thomson affair''' is an Australian political scandal revolving around findings that the Australian federal politician ] used the funds of the ] to pay for personal expenses, including travel, meals, entertainment, prostitutes and his own election campaign. As the Labor government of the Prime Minister, Julia Gillard, depends on his vote, a crisis has developed over his continued presence in Parliament.<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|accessdate=10 May 2012}}</ref> | ]The '''Craig Thomson affair''' is an Australian political scandal revolving around findings by ] that the Australian federal politician ] used the funds of the ] to pay for personal expenses, including travel, meals, entertainment, prostitutes and his own election campaign. As the Labor government of the Prime Minister, Julia Gillard, depends on his vote, a crisis has developed over his continued presence in Parliament.<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|accessdate=10 May 2012}}</ref> | ||
| ==Thomson's vote in a hung parliament== | ==Thomson's vote in a hung parliament== | ||
Revision as of 02:08, 8 June 2012
The Craig Thomson affair is an Australian political scandal revolving around findings by Fair Work Australia that the Australian federal politician Craig Thomson used the funds of the Health Services Union to pay for personal expenses, including travel, meals, entertainment, prostitutes and his own election campaign. As the Labor government of the Prime Minister, Julia Gillard, depends on his vote, a crisis has developed over his continued presence in Parliament.
Thomson's vote in a hung parliament
Both the Labor and the Liberal-National coalition won 72 seats in the 2010 Australian federal election. Government was decided by the six independents and minor party members, with four of the six siding with the ALP led by the Prime Minister, Julia Gillard. If one of those four changed his vote, the government would cease to enjoy majority support. Since the election, the Coalition has lost one member (Peter Slipper, sitting as an Independent and elected as Speaker) and gained one (Independent Tony Crook joining the Coalition from 8 May 2012).. The independent Adam Wilkie withdrew his support in January 2012 but Peter Slipper was suspended on 8 May 2012 and may not vote until he is cleared of civil charges or relinquishes his position. (By tradition, a Speaker may not vote in Parliament unless occupying the Speaker's chair and then only in the event of a tied vote.)
Although Craig Thomson was forced out of the ALP on 8 May 2012 (reducing the government's numbers to 71 against the Coalition's 72), he indicated that he will continue to vote with the ALP. Assuming a vote of confidence, as threatened by Opposition leader Tony Abbott, and that crossbenchers Bob Katter and Andrew Wilkie voted against the government, the vote would be lost with Deputy Speaker Anna Burke casting her vote from the chair to break a 74-74 tie.
However, if Thomson resigned or was suspended from Parliament, the Coalition could expect to win a vote of no-confidence in Julia Gillard's government.
Fair Work Australia inquiry
Fair Work Australia (FWA) was commissioned to investigate allegations of financial impropriety involving the Health Services Union and Craig Thomson.
After three years, Nassios produced a 1 100 page report in which 150 breaches of union rules were identified, mostly concerning the misuse of union funds for the personal benefit of Thomson and others.
The FWA investigation has been criticised for failing to investigate the finances of the HSU No.4 Branch following a petition by HSU members in July 2009.
Credit card spending on escorts
The most sensational allegation against Craig Thomson is that he used his union Mastercard to procure prostitutes. The Fair Work Australia report listed several occasions on which this had occurred.
All agencies used innocuous names on their billing, but searches through business directories etc. led to escort agencies or brothels. Thomson denied any knowledge of approving payments to escort agencies on his credit cards, agreed that these would not be legitimate expenditure and, when it was pointed out that he had in fact approved these payments, apparently made no attempt to investigate them.
Attempts to blame others
Thomson attempted to blame Jeff Jackson, a former HSU executive member for the spending on prostitutes, saying that he had "settled and repaid the HSU...following allegations of using a union credit card at the named escort agencies in Sydney" (page 466). In following statements he identified the amount as $15,000. However, as Nassios pointed out, citing a newspaper report, the $15,000 had been repaid by Jeff Jackson in settlement of three payments of $5,000 identified as "back pay" dishonestly claimed. When asked by Fair Work Australia to clarify his claim, Thomson declined to provide any details, citing legal advice.
Thomson speculated about the impartiality of the investigation after it was revealed that Michael Lawler, the Vice President of FWA, involved himself in internal HSU politics at the bequest of his partner, Kathy Jackson, who allegedly supplied most of the documents used by the FWA in the Craig Thomson investigation.
Defamation action against the Sydney Morning Herald
On 8 April 2009 the Sydney Morning Herald published a story alleging that Thomson had used union credit cards to pay for prostitutes and withdrawn over $100,000 in cash to fund his election campaign for the federal seat of Dobell. Thomson sued the newspaper for defamation, but withdrew proceedings when evidence was produced showing that the payments were made from his credit card, his drivers licence was checked and photocopied and phone calls to escort agencies were made from his mobile phone and hotel rooms. Thomson claimed that although the settlement was confidential, it was one with which he was very happy. However, it involved no retraction or apology from the newspaper, which continued to publish the allegations on the basis that they were true.
Cash withdrawals
Thomson withdrew a total of $103,338.70 in cash from his union-supplied Mastercard:
| Year | Total cash withdrawn |
|---|---|
| 2002 | $901.25 |
| 2003 | $9,603.15 |
| 2004 | $21,290.07 |
| 2005 | $21,094.25 |
| 2006 | $28,985.00 |
| 2007 | $21,465.00 |
| Total | $103,338.70 |
Thomson stated that "it was just sometimes more convenient...to pay in cash" and cited the example of an Aboriginal "welcome to country" ceremony where the fee could only be accepted in cash. He also gave an example where money would be withdrawn prior to a trip to Melbourne (page 278). He also said that any unspent cash would be returned along with the receipts to bookkeeper and financial controller Belinda Ord (page 279). Ord, when questioned on this point, was unable to remember any occasion when cash had been returned (pages 280-281). Thomson's personal assistant, Nurten Ungun, states that she received no documentation on such cash withdrawals (page 283).
Thomson made cash withdrawals totalling $3,771.60 from his union credit card during a period of annual leave in Europe from 20 May to 24 June 2004. He stated that he had attended meetings relating to HSU business in London during this period. There is no evidence of any approval for this expenditure nor any evidence or report of union activities during this time. Thomson stated that he made a written report on his overseas travel. When Fair Work Australia made a formal request for a copy there was no response.
Fair Work Australia identified three occasions on which Thomson travelled to Melbourne and used his union credit card to pay for hotel accounts which included telephone calls from his room to escort agencies. On these occasions Thomson also made large cash withdrawals from his union credit card.
| Date | Location | Activity |
|---|---|---|
| 11 April 2006 | Terrigal, NSW | Cash withdrawal from union Mastercard of $500 |
| 12 April 2006 | Pacific International Suites, Melbourne | Phone call from Thomson's hotel room to "The Boardroom of Melbourne Escort Agency". |
| 20 April 2006 | Forresters Beach, NSW | Cash withdrawal from union Mastercard of $400 |
| 20 April 2006 | Grand Hyatt, Melbourne | Phone calls from Thomson's hotel room to "Young Blondes" and "Confidential Model Escorts" escort agencies. |
| 6 June 2006 | Erina, NSW | Cash withdrawal from union Mastercard of $500 |
| 7 June 2006 | Pacific International Suites, Melbourne | Phone call from Thomson's hotel room to "Miss Behaving Escort Agency". |
Thomson was invited by Fair Work Australia to comment on these matters but responded that on legal advice that he "decline(d) the opportunity to respond to your specific questions."
2007 election campaign
The Fair Work Australia report concluded that Thomson had spent almost $270,000 of HSU funds on his 2007 election campaign to win the seat of Dobell on the NSW Central Coast. This included $200,000 for two staffers who worked on the campaign, and another $71,000 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. Thomson's 2007 electoral return discloses zero campaign expenditure and no gifts or donations to his campaign.
Expenditure after leaving HSU
Thomson resigned from the HSU on 14 December 2007, following his successful election campaign, but continued to incur expenditure on his union credit card, which he retained. Payments were made for travel and accommodation, dining and entertainment, car hire and other services, which continued until 25 February 2008.
Role of external bodies
ACTU
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, saying, "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."
Federal ALP
Prime Minister
During Question Time on 16 August 2011, Prime Minister Julia Gillard was asked if her confidence in Craig 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."
Addressing an ACTU congress on 15 May 2012, Gillard said of the HSU, "...the very poor conduct of one union risks tarnishing that reputation (of the Australian union movement). That dismays you and it dismays me as well. Members have been let down very badly - instead of the sole focus of those union officials being on those members. That disgusts me and I know that it disgusts you too."
Mike Kelly
Kelly attracted controversy when, during an appearance on Sky Television, he made, what one commmentator regarded as "the most horrible slur I can recall in federal politics." Kelly, speaking about the Coalition's pursuit of Thompson, said "The relentless focus on this individual has one outcome in mind. What is that they actually want? Do they want to see a young mother by a graveside weeping, is that the outcome they are looking for? Because this is what they said they want to happen.” Fellow panel member, Sophie Mirabella said, "Don't be so melodramatic, you're better than that, Mike."
Plans for reform
Paul Howes, addressing the ACTU congress on 16 May 2012, said, after defending union skills in hunting down unscrupulous employers, "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."
Julia 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.
Timeline
2002
Thomson is elected as the National Secretary of the HSU.
2007
24 November
Thomson is elected to the federal House of Representatives as member for the Division of Dobell, New South Wales for the Australian Labor Party at the 2007 federal election.
2008
11 December
HSU national secretary Kathy Jackson engages forensic accountants to investigate allegations of impropriety around Thomson's use of a union-issued corporate MasterCard.
2009
6 April
Australian Industrial Registry commences an inquiry into the National Office of the HSU seeking information on possible breaches of union rules or Workplace Relations regulations under legislation.
8 April
The Sydney Morning Herald breaks a story alleging that Craig Thomson used union credit cards to pay for prostitutes, withdraw over $100 000 in cash and fund his election campaign for the federal seat of Dobell. Then Deputy Prime Minister Julia Gillard says, "an independent audit is the best way to get to the bottom of the allegations against Mr Thomson."
2010
February
Thomson initiated defamation proceedings against both the Health Services Union and against the publisher of the Herald, Fairfax Media.
26 March
Terry Nassios delegated by Fair Work Australia to commence an investigation into the affairs of the National Office of the HSU.
2011
April
In proceedings in the New South Wales Supreme Court prior to Thomson's defamation hearing, Fairfax Media claims that subpoenaed records show that details of Thomson's driver's license had been noted on the credit card receipt, that phone records show that Thomson's phone had been used to call two phone numbers associated with a Sydney escort agency and that mobile phone records show that Thomson had travelled from his constituency to Sydney on one of the nights on which one of the impugned charges to the credit card had been made.
Shortly before the defamation trial is scheduled to commence, notice of discontinuance is filed on Thomson's behalf with the New South Wales Supreme Court. Thomson claims that he has reached an out-of-court settlement with Fairfax Media and continues to deny any allegation of impropriety made against him; Fairfax Media claims that Thomson had "dropped" the case and maintains all allegations made against him. It is subsequently revealed that the Australian Labor Party had contributed towards Thomson's legal costs in the actions.
August 2011
In a radio interview Thomson states that he had approved payments made by the Health Services Union to a Sydney escort agency but denied having used the card to pay for prostitution. Rather, he said, another man (who he declined to identify) had used his credit card to pay for escort services and may have forged Thomson's signature in the process and produced a copy of his photo drivers licence as identification; he claimed that unidentified man had subsequently repaid $15,000 to the Health Services Union.
16 August
During Question Time, the Prime Minister Julia Gillard is asked about Thomson: "I have complete confidence in the member for Dobell," Gillard says. "I look forward to him continuing to do that job for a very long, long, long time to come".
18 August
Fair Work Australia reveals it is investigating whether Thomson misled the initial probe into allegations his former union credit card was used to pay for prostitutes. Additionally, court documents in the Fairfax defamation case showed that Thomson's mobile phone had apparently been used to call escort agencies on several occasions in 2005 and 2007.
23 August
Thomson resigns as chair of the House of Representatives Standing Committee on Economics. On the same day, the New South Wales Police Force confirmed it would complete an "internal assessment" to determine whether or not "a criminal offence has occurred".
7 September
A spokesman for New South Wales Police confirms that they would not be conducting a formal investigation or laying charges, but indicates the case had been referred to Victoria Police as the HSU's financial controls were conducted in Melbourne.
2012
28 April 2012
Julia Gillard tells Thomson it is no longer appropriate for him to sit in the Labor caucus. She announces that she is moving to lift a "dark cloud" over Parliament and that "a line has been crossed about the ability of Australians to confidently say that they have respect in our Parliament."
Thomson requests suspension of his ALP membership and states that he would sit on the crossbenches as an independent.
7 May
A three year investigation by Fair Work Australia of improprieties in the use of union funds describes $6,000 spent on escorts, $103,000 withdrawn as cash advances from union credit cards, and $270,000 spent on Thomson's 2007 election campaign. Fair Work Australia has commenced proceedings against Thomson in the Federal Court. Thomson has called the 1,100 page report, tabled on 7 May 2012 in the Senate, "nothing short of a joke".
16 May
The Australian Electoral Commission announces its findings in relation to the 2007 electoral expenses claim, finding that the bulk of the $270,000 on electoral expenses was properly disclosed in HSU's third party expenditure returns. This does not mean that the money was spent in a fiscally responsible manner, as previously disclosed (on 7 May 2012) there was no regulation governing the expenditure of the money which is against public practice. The AEC said it was seeking further clarification from the HSU and ALP NSW branch regarding four items of expenditure totalling an amount of $17,014.88, which it said had not been accounted for in the initial investigation.
21 May
Thomson addresses Parliament, responding to the Fair Work Australia report. In an hour long speech, he listed his record as a union official and Member of Parliament, claimed he was "set up" by fellow union officials and has been harassed by the media and the Coalition. While not directly addressing specific allegations of embezzlement, he claimed previous work practice had been more lax at HSU and he had limited the kind of damage he has been accused of doing. He made a number of allegations, some of which were denied within hours.
References
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{{cite news}}: External link in|title= - Kerr, Christian (30 April 2012). "Labor's House of Representatives numbers dwindle to 70". The Australian. Retrieved 15 May 2012.
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{{cite news}}: Check date values in:|accessdate=(help) - Nassios, Terry. "Investigation into the National Office of the Health Services Union, Escort Services" (PDF). Report of the Delegate to the General Manager of Fair Work Australia. Fair Work Australia. pp. 463–505. Retrieved 10 May 2012.
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{{cite news}}: External link in|title= - Uhlmann, Chris (29 May 2012). "Senior Fair Work official embroiled in HSU fighting". ABC News. Retrieved 07 June 2012.
{{cite news}}: Check date values in:|accessdate=(help) - ^ "Craig Thomson union credit card rort paid for brothels". Smh.com.au. 8 April 2009. Retrieved 21 August 2011.
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