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Thomson claims he was set up

Controversial MP Craig Thomson speaks publicly for the first time, on Saturday, since a damning report into his time as head of the HSU.

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She established Craig Thomson's campaign office and concocted a community group as a front for the Labor Party, but the woman at the centre of Mr Thomson's 2007 election win in Dobell insists she was just working for the union movement.

Criselee Stevens, who Fair Work Australia found was paid $150,000 by the Health Services Union for a role that amounted to electioneering for Mr Thomson, told The Sun-Herald: ''It wasn't quite as ugly and corrupt as people are making out.''

She broke her silence as the Liberal MP who lost Dobell in 2007, Ken Ticehurst, said he plans to sue Mr Thomson for lost earnings. He believes he was robbed of his seat by Mr Thomson, costing him a parliamentary pension of $85,000 a year.

Criselee Stevens.

''Not as ugly and corrupt as people are making out'' … Criselee Stevens.

Mr Ticehurst said then Treasurer Peter Costello's office informed him of allegations about Mr Thomson, including his use of prostitutes, before the 2007 election. He said: ''If we knew, Labor must have known.''

Ms Stevens, who has never commented publicly on her role in 2007, told The Sun-Herald her job was campaigning for the HSU.

''It was always about Your Rights at Work,'' she said. ''A lot of people have forgotten what was happening in 2007. It was Your Rights at Work against Work Choices and Your Rights at Work won.''

The damning Fair Work Australia report found Ms Stevens received $154,000 from the HSU before moving over to Mr Thomson's electorate office.

Fair Work investigator Terry Nassios found Ms Stevens was ''not employed by Mr Thomson as part of the business of the union''. He found her appointment had been kept secret from the HSU's national leadership by Mr Thomson.

But she disputes that finding, saying: ''I find it hard to believe people at a national executive level weren't aware of the process [her role on the Central Coast] it's not like anything was being hidden.''

Ms Stevens, who quit her ALP membership in 2008 and has not spoken to the member for Dobell in two years, said she had not witnessed any inappropriate behaviour by Mr Thomson, who is accused of paying for prostitutes on his union credit card.

''I put in petrol dockets but certainly no escort services or $2500 dinners,'' Ms Stevens said. She spent $39,314.24 on her HSU Diners Club card.

The FWA report also details how Mr Thomson funnelled money into establishing a supposedly non-partisan community group, Coastal Voice, with the help of Ms Stevens. The group was one of a range of measures aimed at securing Dobell.

Mr Thomson, who won by 3303 votes, spent a further $71,000 in HSU funds on letterbox drops, broadcast advertising and petrol for his distinctive campaign bus.

The Australian Electoral Commission confirmed it was investigating the FWA report as to why the HSU-related expenditure was not declared in Mr Thomson's returns.

Mr Ticehurst, who was outspent by Mr Thomson three dollars to one, said Labor had ''defrauded'' the people of Dobell by allowing Mr Thomson to run.

He said David Gazard, then a political adviser to Mr Costello, showed him a file containing allegations against Mr Thomson. ''If we knew all that, the Labor Party must have known what was going on,'' Mr Ticehurst said.

Mr Gazard told The Sun-Herald he does not recall any specific allegations from that time.

Mr Ticehurst said he would seek legal advice. ''There could be a case and I think it's worth pursuing,'' he said. ''If he gets charged with anything, which seems inevitable now, I will be taking action.''