Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Honest, heroic, revolutionary, and the praise kept coming. Here was fearless whistleblower Kathy Jackson, who exposed endemic corruption within her Health Services Union that landed its former leader Michael Williamson in jail for fraud.
Her stocks then soared even higher in January last year when she strode smartly attired into a Melbourne court room to testify about the credit card misuse of another ex-union colleague, disgraced MP Craig Thomson.
The Abbott frontbench lauded her bravery. Christopher Pyne said at the time that Jackson would be forever remembered as a "transforming" unionist.
A lot can change in a year.
Within months of Thomson's trial, Jackson began to experience herself at least some of what he had had to endure – increasingly serious corruption claims, a slew of subpoenas and utter humiliation in a very public way.
Jackson had been a high-flyer in the labour movement, at one stage even the vice-president of its peak body, the ACTU. She had long and close relationships with ALP powerbrokers David Feeney and Bill Shorten (before the pair fell out around 2007), and a career in politics appeared to be on the cards.
In a startlingly short space of time, everything has unravelled. Her fall from grace has been swift and spectacular. She is all but abandoned by her former allies, with the colossal case against her impossible to ignore.
The Federal Court this week has heard damning evidence implicating Jackson in allegations of large-scale theft and misappropriation of HSU funds via cash cheques, a secret slush fund and three union-issued credit cards.
The HSU alleges she wrongfully spent $1.4 million, dipping into union funds for years to fund her own five-star lifestyle. Jackson's alleged misappropriation is on a magnitude rarely seen before. Craig Thomson's alleged $28,000 pales in comparison.
Her expenses, revealed in bank statements subpoenaed by the HSU, outline up to $660,000 spent on clothes at high-end department stores; dinners at Melbourne's top-rated restaurants; and flights and accommodation for multiple overseas holidays including to New York, Hong Kong and Europe.
Then came the reams of receipts for various other retail expenses, among them Apple-brand electronics, DVDs, jewellery and exercise machines. Jackson even used union funds for her home mortgage repayments and more than $50,000 in contributions towards a divorce settlement to ex-husband Jeff Jackson.
Perhaps the most blatant of Jackson's alleged misappropriation, says the HSU, is Jackson's regular withdrawals of "vast wads" of cash of up to $9000 a time – about $250,000 in total – from her Victorian branch's operating funds. Almost all of it was allegedly pocketed for her own personal use.
Jackson also controlled an off-the-books slush fund, known as the National Health Development Account, from which she took a further $250,000 for allegedly improper purposes.
The account, the existence of which was first revealed by Fairfax Media, was set up after a $250,000 payment from the Peter MacCallum cancer hospital in 2003 to Jackson's HSU No. 3 branch.
The payment was to settle a back-pay dispute for workers, but instead was used as seed money for the account. The workers never received their back-pay.
HSU barrister Mark Irving said evidence before the court clearly demonstrated that Jackson had even been "purchasing the family's shopping on the union credit card", with receipts showing she bought a $350 knife block, Disney-themed children's luggage and food products including 1.4 litres of Hershey's chocolate syrup and 1.3 kilograms of ravioli from discount supermarket Costco.
The three-day Federal Court hearing went ahead this week uncontested by Jackson, after she she suddenly declared bankruptcy on the eve of the trial's scheduled start-date last month.
A sudden deterioration in her finances – which the union alleged was a sham – was just the latest twist in the legal proceedings that faced major delays for more than a year.
Jackson has repeatedly made 11th-hour applications to the court, often the evening or even morning before she was due to appear, to have the case stalled.
Chief among them has been her abuse-of-process application to have the proceedings thrown out altogether, claiming the lawsuit was nothing more than a revenge plot masterminded by senior ALP and trade union heavyweights to "destroy her" for her whistleblowing on others.
She has also previously checked herself into a mental health facility, and it is argued attempted to transfer her assets of a $1.3 million coastal NSW home into the name of her de-facto partner, Fair Work Commission vice-president Michael Lawler.
In earlier defence statements filed with the court, Jackson strongly denied any wrongdoing. She said her use of union-issued credit cards to buy designer clothes, lavish meals and overseas vacations worth hundreds of thousands of dollars was entirely appropriate.
She said vouchers supporting each credit card expense were handed over to the union branch bookkeeper and submitted for approval, maintaining that all expenses relating to retail, food and alcohol, entertainment and fitness were work-related, and claims that in a 2002 pay review she traded off a salary increase for a "substantial travel entitlement".
The HSU closed its case by applying for the court's permission to allow it to hand over a large dossier of "considerable evidence" to the trade union royal commission and the police for use in possible proceedings.
Victoria Police is already investigating Jackson for criminal theft and fraud while the lead lawyer for the Heydon royal commission has recommended criminal charges over the NHDA slush fund. The inquiry has delayed its formal findings until the end of the year.
Federal Court Justice Richard Tracey said he would consider the HSU's case against Jackson as "speedily" as possible after the trial came to a close. Her judgement day looms.
The HSU told the court that Jackson's suggestion that the lawsuit was part of a payback plot for her whistleblowing was absurd.
"Ms Jackson did perform an important service blowing the whistle, but it's not an immunity," Mr Irving said.
"It's not a continuation of a 'hate Kathy, get Kathy' campaign ... but a reflection of the evidence about wrongdoing."
In February last year, Labor and the Abbott government passed an unprecedented parliamentary motion last year apologising to Jackson and HSU members for the conduct of Craig Thomson. The Coalition called Jackson a "lion of the union movement".
Whether Jackson will be remembered as a heroic whistleblower or a union thief remains to be seen.
