Labor MP Craig Thomson

Labor MP Craig Thomson. Photo: Andrew Meares

FAIR Work Australia has recommended civil court action against MP and former Health Services Union national secretary Craig Thomson after uncovering what it says was substantial misuse of members' funds.

The report, released tonight by a Senate committee, finds Mr Thomson used his union Mastercard to to procure $5,793 worth of escort services.

He is also found to have made unauthorised cash withdrawals and that he provided his union credit card to another person and allowed them to make cash withdrawals.

Health Services Union leader Michael Williamson leaving his Maroubra home.

Health Services Union leader Michael Williamson leaving his Maroubra home. Photo: Ben Rushton

In addition, the report finds that between October and November 2007 Mr Thomson was not on annual leave from the HSU yet ''spent most, if not all, of this period campaigning for his own election as the member for Dobell and could not have been carrying out the full time duties of National Secretary during this period''

Responding to the release of the report, Workplace Relations Minister Bill Shorten said its findings were ''disturbing'' and ''extremely disappointing''.

''I must say I find the findings of the report disturbing,'' he told reporters in Canberra. ''I find them extremely disappointing as a former union official.''

Health Services Union national secretary Kathy Jackson.

Health Services Union national secretary Kathy Jackson. Photo: Melanie Russell

Mr Thomson, the member for the NSW seat of Dobell, has stood aside from the ALP to sit as an independent pending the findings of the investigation and denies any wrongdoing.

Earlier, Fair Work Australian general manager Bernadette O'Neill said "substantial funds were, in my view, spent inappropriately including on escort services, spousal travel, and excessive travel and hospitality expenditure".

"The investigation reveals an organisation that abjectly failed to have adequate governance arrangements in place to protect union members' funds against misuse."

Ms O'Neill's statement follows four weeks of consideration of the FWA report, which took more than three years to prepare.

It investigated the HSU and identified 181 contraventions, of which 105 were breaches of the Registered Organisations Act that are only civil penalties that attract fines.

The other 76 contraventions were minor administrative and technical breaches that did not warrant even a civil penalty.

Ms O'Neill said today the "great majority of contraventions" related to a former union official, believed to be Mr Thomson who was suspended from the ALP eight days ago.

Mr Thomson continues to deny any wrongdoing and says that any proceedings brought against him as a result of the report's findings would be "strenuously defended".

"I maintain my innocence and deny any wrongdoing," he said in a statement this afternoon.

The member for Dobell said that the whole Fair Work investigation into the national office of the HSU had been "nothing short of a joke".

"It is unprecedented that an investigative body has such little confidence in its report that it seeks parliamentary privilege as a condition of the report's release," he said.

Mr Thomson said that both the Commonwealth Director of Public Prosecutions and the police had "made it clear" that there was nothing of a criminal nature in the Fair Work report.

"The report is based on allegations - and that is all they are - [that] have not been tested by a court. These assertions are not based on proper evidence. These allegations are burdened with claims by two people, [officials] Michael Williamson and Kathy Jackson, who are currently under criminal investigation," Mr Thomson said.

The contraventions identified in the 1100-plus page report relate to two current HSU officials, stood-aside national president Michael Williamson and general secretary Kathy Jackson, as well as Mr Iaan Dick, auditor of the National Office and Mr Thomson, who was union general secretary from 2002 to 2007 before he was elected as the Labor MP for the seat of Dobell.

The report, released after an investigation of more than three years, also found Mr Thomson, had bought and authorised the purchase of chocolates and cigarettes on credit cards without the authority of either National Council or National Executive.

Others covered by the report's findings are believed to be Ms Jackson, Mr Williamson and a former auditor.

Of the 76 contraventions that attract no penalty, Ms O'Neill said they were breaches of HSU rules, which led to "significant consequences, such as the failure to have internal policies governing the use of credit cards".

By making this known, she hoped the union would changes its rules

She said Fair Work Australia had instructed its solicitors to initiate Federal Court action.

If Mr Thomson or anyone else is convicted of any wrongdoing, they would face only modest fines. These would not be criminal offences and any court finding would not require Mr Thomson to leave Parliament.

FWA does not have the power to recommend criminal action and its investigation has been handed to NSW and Victorian Police, which are still conducting separate investigations into the HSU.

Stood aside as president of the Health Services Union since October, Mr Williamson has written to union officials declaring his innocence of any criminal or civil offences.

Mr Williamson - who remains on full pay despite his suspension - says any mention of criminal issues in FWA's investigation report relates to "others".

In an email sent on April 3 to a number of HSU union officials, Mr Williamson said that he was not part of "any criminal matters" in the FWA report.

"My lawyers ... advised the matters I was requested to respond to were not criminal issues as referred to by FWA. They do not relate to me but others," he wrote.

"I think it is important that you become aware of this as members may well be asking 'is Michael being charged with criminal offences.' The simple answer is no."

Mr Williamson then adds, "it is highly probable that the civil allegations also do not apply to me."

Mr Williamson was stood aside as HSU national president and secretary of the dominant HSU East branch pending investigations into financial impropriety and workplace law breaches.

Trade Minister Craig Emerson welcomed the release of the Fair Work report, saying the government respected "due process".

"We've hoped that there would be a release of this report of Fair Work Australia," Dr Emerson said.

"Four years in the making - Craig Thomson's had two baby daughters during that time. We've always said let the processes continue without any interference.

"And it's been the Coalition that have demanded that this report be released; demanded that we ring up Fair Work Australia; that the Prime Minister instructs Fair Work Australia to release the report."

The report found that Mr Thomson failed to ''discharge his duty as National Secretary with the degree of care and diligence that a reasonable person would exercise if they were the National Secretary in the National Office's circumstances,'' in hiring staff at the National Office.

It also found Mr Thomson had set wages and conditions of employees on behalf of the National Office without reporting to National Executive that he had done so.

The report is damning of Mr Thomson's failure to adequately prepare policies around the use of credit cards and cash withdrawals.

A trio of Coalition Senators has demanded the immediate release of the 1100 page report but admitted the relevant Senate committee had yet to receive the document.

Opposition spokesman for workplace relations, Eric Abetz, the shadow attorney-general, George Brandis and Victorian Senator, Michael Ronaldson said that if the Gillard Government held back the report, it was tantamount to a cover-up.

''We believe it should be released as a matter of some urgency,'' Senator Abetz said.

Senator Abetz said he would wait to see the details of the report before deciding whether to name Mr Thomson under parliamentary privilege.

Senator Brandis said the question whether the unnamed former official was Mr Thomson was ''now academic'', as the embattled MP had taken to Twitter and issued a statement to maintain his innocence.

''Clearly Mr Thomson feels the report deals adversely with him,'' he said. ''Mr Thomson seems to acknowledge it is all about him.''

Ms O'Neill said in her statement she was not able to provide a brief to prosecutors to consider possible criminal charges, or share information with Victorian and NSW police.

She also said she could not name the union officials, as she was not protected from defamation laws.

Senator Brandis bluntly said Ms O'Neill was wrong.''There is absolutely no statutory reason why that could not be done,'' he said.

- with Jessica Wright

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