In an effort to distance itself further from the troubled MP and his role at the Health Services Union, the government said last night it would legislate to improve the financial disclosure and accountability of unions, increase penalties for breaches of the legislation, ensure future investigations by Fair Work Australia never again take so long, and that the body co-operated with police. "Mr Thomson has provided me with information that is false or misleading in so far as the expenditure of HSU funds on escort services is concerned" ... investigator Terry Nassios. Credit:Louie Douvis Mr Thomson, who was recently suspended from the Labor Party, was found by Fair Work Australia to have lied when he denied using his union credit card to procure prostitutes - as first revealed in the Herald. ''I can only conclude that it was indeed Mr Thomson who used his credit card to spend the amount of $5793 for the procurement of escort services,'' Terry Nassios, the director, organisations, research and advice, said in the 1105-page report. Mr Nassios's damning report, the result of a two-year investigation, was released last night by the Senate committee on education, employment and workplace relations.

The report contains damaging allegations against Mr Thomson, who was national secretary of the HSU from 2002 to 2007, when he entered Parliament. Denying he had ever used his HSU credit cards to procure escort services, Mr Thomson had provided ''information that is false or misleading'', the report said. He was found to have provided false or misleading information about the $103,000 in cash withdrawals made during the period he was national secretary. Allegations were also levelled against Mr Thomson that he spent more than $250,000 of HSU funds without authorisation ''to advance his prospects of becoming elected to Parliament'' when contesting the central coast of seat Dobell in 2007. As national secretary, Mr Thomson spent $73,000 on wining and dining. Not all of this was on HSU union business, the report found. Even after he had left the union, Mr Thomson spent another $1425 of HSU funds for his personal benefit.

Mr Nassios examined the six separate occasions credit cards issued to Mr Thomson were spent on prostitutes. ''Mr Thomson claims that these transactions were incurred fraudulently by another person using his credit cards. ''However, the following matters overwhelmingly support an inference that it was Mr Thomson who used his own credit cards to make these transactions,'' he said. For example, $2475 was spent on Sydney Escorts run by Keywed in April 2005. Mr Nassios found Mr Thomson's mobile phone was used twice to call the escort agency on the evening of April 7, 2005. Seven separate transactions were processed by Keywed between April 7 and April 9, 2007 but they were spread between Mr Thomson's two union credit cards, a Diners and a CBA MasterCard.

The report concluded: ''If the transactions were all incurred by another person [as Mr Thomson had suggested], that person must have been able to transact on both cards.'' The report found that ''a signature which bears a strong likeness to Mr Thomson's'' appeared on the receipt and that Mr Thomson's driver's licence details appeared on the back of the receipt. In addition, Mr Thomson's own hotel accounts established that three times he used his HSU-issued credit cards to pay for phone calls from hotel rooms to escort agencies. Mr Thomson said yesterday: ''This whole investigation has 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.'' Of the 181 contraventions of the Registered Organisations Act that were identified, 156 relate to Mr Thomson.

Only one minor breach related to the present national secretary, Kathy Jackson, five to the national president, Michael Williamson, who has stood aside, and the rest involve a former auditor, Iaan Dick. The investigation found numerous examples of unaccounted for expenditure on ''excessive'' hospitality and travel in ''an organisation that abjectly failed to have adequate governance arrangements in place to protect union members' funds against misuse''. The general manager of Fair Work Australia, Bernadette O'Neill, has referred all breaches to the Federal Court for civil action, which means if the court finds against Mr Thomson, he is not disqualified from sitting in Parliament. The maximum penalty is the imposition of fines. The report has been given to police in Victoria and NSW, which are conducting criminal investigations into the HSU.

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