Thomson 6: Kathy Jackson and the HSU $½ million

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Another ground-breaking investigative report from Peter Wicks shows evidence of huge unexplained payments being made to HSU “whistleblower” Kathy Jackson — as Craig Thomson’s so-called “conspiracy theories” begin to look more and more believable.

THE NEWS has finally broken in the mainstream media.

At the Senate Estimates Committee hearing yesterday, the recently appointed Fair Work Australia President, Justice Iain Ross, scotched any suggestions his colleague and 2IC, Michael Lawler, had in any way interfered in the Fair Work Australia investigation into the Health Services Union — where Lawler's partner, Kathy Jackson, is the national secretary.

Mr Lawler had assured him this had not happened, Ross averred, and no-one had provided him, personally, with any evidence anything untoward had occurred and, in any case, he didn’t even have the powers to investigate a lofty senior “member” of the judiciary — which is what Lawler is, apparently. So, that's that.

You can read more about Justice Iain Ross’ comments, who also appeared on ABC 7.30 last night, by clicking here.

Michael Lawler was, of course, unavailable to answer questions at the hearing yesterday, as he had been away on “long leave” — whatever that means. Clearly, his recreation was more important than appearing in front of the Senate.

Also unavailable to answer questions from the Senate was the single FWA investigator, Terry Nassios, who prepared a report so damning of Craig Thomson, now an MP, that it may have the power to bring down the Federal Government.

[Download Terry Nassios’ report into the HSU in PDF.]

Now, there is no reason to suggest, apart from Thomson's allegations of bias, that Terry Nassios is anything other than the career public servant doing his job “without fear or favour” — as he said he described himself to Craig Thomson when Thomson first raised the issue of Michael Lawler and Kathy Jackson with him. And, like Ross suggested, there may not be any immediate evidence of Lawler interfering in the investigation — indeed, Nassios claims, in his report, never to have spoken to Lawler — and there is no particular reason to doubt him.

However, as we have written about over the past fortnight, with the evidence of Michael Lawler’s massive conflicts of interest, which also includes his active involvement in HSU politics on behalf of Kathy Jackson (as has now finally been reported by the ABC in the last 24 hours), Lawler’s seniority within the FWA does lead many, including us, to have deep misgivings about the even-handedness and veracity of the FWA investigation. This is magnified when we consider that it appears as if Kathy Jackson has had access to FWA computers, and used them to send HSU material, as we’ve previously reported.

[If you have not read our previous articles, it is worth reading them here for background into this investigation: Part One, Part Two, Part Three, Part Four & Part Five.]

These reservations are multiplied again, when one considers that when Nassios asked the HSU to provide all the financial and management records for the time period that Craig Thomson was working for the HSU — it was Kathy Jackson who personally delivered the 4 boxes of records, containing just 12 folders.

That’s right, Craig Thomson’s main accuser was the one who checked out all the records and then personally delivered them to the FWA.

Once Nassios checked through the records, he found that many documents he had expected to find, like the minutes of all HSU national office board meetings, were not included in those 12 folders.

Nassios says he rang the HSU but was unable to talk to Kathy Jackson as she had left the country, so he asked other staff there if there were any records that had failed to be delivered to him. The staff assured him that he had been given the records but couldn’t confirm that this was, in fact, the case. All they could say definitively was that Kathy Jackson had checked out all the records — none of them were present when she delivered the documents.

Strangely, Nassios concludes in the report that since the documents – like the minutes of the board meetings – had gone missing and since the staff of the HSU say all of the documents were sent to him, then that this must mean that Craig Thomson didn’t make these records. This is despite Thomson asserting repeatedly that all the records and minutes were there when he left the HSU.

From Terry Nassios' investigation into HSU, p.36

The first question that should be asked is why a senior union official, who was being paid over a quarter of a million dollars per annum, plus benefits, was doing such a mundane job as being a courier?

Secondly, what proof is there that she actually delivered all the records?

Thirdly, why did Nassios not question the fact that Jackson had just had unrestricted access to the records immediately before they came into his possession?

It seems that one of the reasons the FWA report took so long to complete was that Nassios was, right up until the 2nd half of last year, still trying to get the missing board minutes from the FWA. If Craig Thomson is actually telling the truth about trying to implement proper procedures, controls and standards of accounting at the HSU while being actively resisted by Kathy Jackson— then those minutes going missing would indeed be most advantageous to Jackson, as they would be the exact records that could prove this one way or the other.

It is an unusual element of the Nassios report that is damning of Craig Thomson and Michael Williamson, yet mentions few other parties. About Kathy Jackson, was just minor one adverse finding, as opposed to the scores listed against the other two, who were both Jackson’s factional enemies.

From our investigations, however, it is abundantly clear that the rot in the HSU was far more extensive than just one or two corrupt individuals. And the more I look into it, the more information I uncover, and the more documents that find their way into my hands — the more I understand why HSU members are so livid. The following video is instructive as to the extent of the factional in-fighting and allegations of corruption by multiple officials at the HSU:

There are those who have pointed out to me that, according to the Murdoch press, Craig Thomson has over $500,000 worth of union money to explain. Many of these people point out that the approximately $26,000 of questionable Union funds that we have exposed – which Craig's accuser Kathy Jackson needs to explain – is small-fry in comparison.

Contrary to those assertions, the Australian Electoral Commission has cleared has, in fact, cleared most of the accusations about Craig's electoral funding, which apparently made up the bulk of the $500,000. This in turn has brought the amount of unexplained funding down to about $17,000. It must also be remembered, these funds were used for union advertising, as part of the anti-WorkChoices campaign — not going straight to Thomson’s bank account. There are no allegations I can find that suggest any payments had been made directly to Craig Thomson.

Craig's main accuser, the so called "union whistle blower" Kathy Jackson, would like us all to believe that she had the union members best interests at heart — that she merely wanted to clean up the HSU.

On the ABC's 7.30, she told Chris Uhlmann that she thought she was overpaid, and had tried to have her salary reduced by $100,000:

CHRIS UHLMANN: Doesn't that seem a little excessive... [discussing Kathy Jackson’s pay rise to $270,000]

KATHY JACKSON: Yes, it does.

CHRIS UHLMANN: ... for someone who represents some of the poorest workers in Australia?

KATHY JACKSON: I agree with you but let's look at the history of this. As I said previously this was rammed through the council, by Michael Williamson and his people. We objected to it. The Victorians ran a case against it to the council, it was in camera.

I wasn't at the meeting. We were asked to leave. The New South Wales councillors rammed this proposal through.

At mediation last week in the courts, as part of that mediation, process, I put my hand up and said that I should get at least $100,000 salary cut, and that was rejected.

It appears, judging by this statement, that Jackson does not like to see unnecessary expenditure and, indeed, is willing to make personal sacrifices for the good of the members. It is commendable, yet rather odd, that after receiving this salary for years, she had only chosen to address her excessive pay now — still, better late than never, I guess.

While Kathy Jackson’s statement on 7.30 may seem honourable to some – including Tony Abbott, who called her a hero – documents that have come into my possession paint a rather different picture.

[NOTE: All documents, by the way, will be turned over to any police or official investigation upon request. We want to make clear that we have no – and never at any time had any – intention of retaining possession of these documents and will make all reasonable efforts, once our investigations are complete, to return all items to their rightful and lawful owners.]

From the HSU Vic No. 3 Branch  minutes: Kathy Jackson's "honorarium"

According to these documents, Kathy Jackson claimed, and was paid, $63,000 on 30 June 2010. The payment was called an “honorarium” and was, according to the HSU - Victorian Branch No. 3 minutes, simply performing her duties as the Branch Secretary and were in addition to her $270,000 annual salary. If somebody really wanted to reduce their wage by $100,000 then, to me, it would seem logical not to claim an extra $63,000 when it was not necessary she do so.

Even more seriously, the 2010 Auditors by Agostinelli and Perlen, Chartered Accountants, into the HSU - Vic No. 3 Branch has a payment that stands out alarmingly, to say the very least.

On page 18 of that report, it shows an amount described as “Key Management Personnel Compensation”. The only recipient listed is Katherine Jackson — and it is for $522,570. That’s over half a million dollars taken from some of the nation’s lowest paid workers.

Now, it doesn’t take Albert Einstein to understand that this is a lot of money for a union official to receive in a single payment. Also, bear in mind that this is also in addition to Jackson’s $270,000 salary as well as all of the “consultancy fees” her companies have charged the union — which have totalled $36,867.46 for Neranto No 10, and $4,860.72 for K Koukouvaos Consulting, where as an ABN does not appear on the invoice, I understand this makes them direct payments. (Given no ABN appeared, it would also be useful to know whether all the appropriate taxation has been paid on these fees.)

From 2010 audior's report: Key Management Personnel Compensation for Kathy Jackson

One of the other worrying things in the auditor’s report is on page 19. Considering the over a half million dollar payment detailed on the page before, it is a timely reminder that Kathy Jackson was, until very recently, also a trustee of H.E.S.T. Australia — the Industry Super Fund for the health industry.

Independent Australia and I have both have received numerous anonymous tips to look into the HESTA fund and its trustee’s. Unfortunately, we have not had the time to thoroughly do so. It is, however, interesting to note that on 15 August 2007, there is a payment for Accommodation and Travel to Kathy Jackson marked ‘HESTA’ for $13,100. That’s some travel expense.

Indeed, in just two weeks, we have found payments to Kathy Jackson, and to her children’s Child Care Centre, totalling $659,063.18. Bear in mind that Kathy Jackson is not an investment banker, she is a union official representing low-paid healthy service workers.
Below is a breakdown:


Documentation of these payments may be accessed on our site via the links mentioned above.

Of course, there may be reasonable explanations for all these payments.

In happier days: (from left) Kathy Jackson; Christa Thomson (Craig's former wife); former HSU official and now Victorian Labor MP Kaye Darveniza; and an unknown person.

It is worth noting that all of these payments were discovered with extremely limited access and in only 2 weeks; one can only imagine what a forensic accountancy team would find with full access over a month.

We have had mountains of documentation to wade through, and there is much more to come in this saga. I have been lucky enough to have my wife Felicity going through documentation and helping to proofread my posts, as well as IA managing editor David Donovan who assisted in the investigation and putting together the final versions  of the stories. I would also like to thank the vast numbers of people who have sent messages of support, and particularly to all the HSU members who have offered information and assistance. These good people just want their union back from those who have hijacked it.

It is starting to appear as there could be a large number of people who were using HSU funds like personal bank accounts. It may be that of the many involved, all they needed was a fall guy; and who better than someone who was, perhaps, trying to clean up the Union — Craig Thomson.

Of course, this is speculation and again, I must stress, we are not claiming that Craig is innocent; what we are saying, though, is that he should be considered such until proven guilty by a lawful and properly constituted court — as should Kathy Jackson.

In the thousands of messages we have received, there was just one that expressed concern for Jackson’s partner, Michael Lawler, Vice President of Fair Work Australia. Lawler has, as we’ve reported, been on “Long Leave” suddenly the working day before Thomson’s address to parliament and has been keeping a low profile since.

We have some good news for that person, and anyone else with concerns for Lawler. According to several eye-witness reports we have received, he was spotted last week looking dapper and as fresh as a daisy in a café, having a cuppa with his partner Kathy Jackson, along with the manager of Opposition Business Christopher Pyne.

The same Christopher Pyne who had a late night drinking session James Ashby.


Kathy Jackson and Victorian Labor MP Martin Pakula.

(Read more from Peter Wicks on his blog WIXXYLEAKS. You can also follow him on Twitter @madwixxy.)

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