Health Services Union official Michael Williamson was living an “obscene millionaires's lifestyle” in a palatial home that far exceeded his income before he was convicted of fraud, the royal commission into trade unions has been told.
The national secretary of the Health Services Union, Kathy Jackson, said her suspicions of Williamson's corruption “crystallised” when she visited Williamson's new holiday house in Brightwaters, Lake Macquarie, in January 2011.
“When I visited his house, it became quite evident to me that this was not just your average holiday home that most ordinary Australians would own, it was quite palatial,” she said.
Ms Jackson rose to national prominence as a whistleblower on widespread corruption at the HSU involving former senior officials Michael Williamson, now in jail, and Craig Thomson, a disgraced former head of the union and former ALP federal MP.
Thomson is on bail pending an appeal against his conviction and sentence on multiple fraud charges.
Ms Jackson has won the backing of senior Coalition figures including Prime Minister Tony Abbott, who dubbed her "heroic".
In her written statement to the royal commission she said since she had exposed corruption she had been called "Judas", a "Liberal prostitute" and "traitor", and suffered "smears" on the internet and in the mainstream media.
She also claimed Williamson, a former Labor national president, twice offered her a seat in Parliament, in 2010 and 2011.
In evidence, Ms Jackson said she understood Williamson had a personal loan of about $2.1 million.
“I considered that the interest accruing on that loan size, alone, would have equalled almost the totality of his then income,” she said. “I believed Mr Williamson and his family enjoyed a lifestyle that could not be sustained on his legitimate income.”
She recalled telling union colleagues that Williamson was “thieving the members' money as we speak and living an obscene millionaire's lifestyle off the backs of our members”.
The holiday home overlooking a lake was fitted with hardwood parquetry floors and equipped with four European fridges and high-end audio visual units, according to Ms Jackson.
She said there was a "lavish" playroom filled with "every conceivable mod-con" and Williamson had plans to build an in-ground swimming pool, cabana and to buy a boat.
When Ms Jackson first raised concerns about Thomson's misuse of union funds, Williamson had brushed them off.
“He said, Darl, there's nothing to worry about," she said. "We don't have to make any referral to police. It's just a storm in a tea cup. It's these right-wing nut jobs on the radio up here . . . just keep your head down and make no comment and it will go away.”
When counsel assisting the royal commission Jeremy Stoljar suggested the tide turned against Ms Jackson after she confirmed allegations put to her by the ABC's Lateline program on August 24, 2011, that Thomson had used his union-funded credit card to pay for prostitutes.
In evidence, Ms Jackson said: “From this point forward, I was hounded by the rest of the national executive members who in my view, went feral and who thereafter appeared to collude with Mr Williamson's strategy to defeat the allegations I made”.
A few days after her television interview when she attended an ALP Victorian branch meeting she was subject to sniggers and called a “traitor and a Labor rat”.
It became clear to Ms Jackson that Williamson and others would do “whatever it takes to shut me down”.
Ms Jackson said that the union did not need to have to wait for a criminal investigation, saying it should have acted earlier by conducting its own internal investigation.
“There was a protection racket going on . . . through no fault of the Health Services Union of or its members," she said.
Ms Jackson broke down while giving evidence in the royal commission on Wednesday when she recounted the stress she experienced as a whistleblower on the corruption in the HSU. She said she was sectioned under the Mental Health Act.
“I was an involuntary patient at Austin psychiatric hospital in Melbourne,” she said.
“I now understand what drives people to do certain things.”
Ms Jackson said she started taking anti-psychotic medication and doctors warned her she risked a further breakdown if did not remove herself from such a highly stressful situation.
But she resolved that she would not allow her opponents to break her “like they were trying to do and they are still trying to do”.
Ms Jackson said she had been told in 2011 that former NSW ALP general secretary - and now Labor senator - Sam Dastyari had suggested an “amicable divorce” between the Victorian and NSW branch of the HSU, and that she had been warned by others that she could not beat Sussex St.
She also said she had been shunned by the labour movement.
In a meeting with senior ACTU officials in 2011, Ms Jackson claims there was a lack of interest in her allegations of corruption.
Ms Jackson said former ACTU secretary Jeff Lawrence responded by saying, "Well, at least (corrupt former union official) Norm Gallagher got to build a holiday house."