Federal MP David Feeney secured donations from a tobacco company to fund a candidate in Health Services Union (HSU) elections, a royal commission has heard.



Former HSU official Marco Bolano recently discovered the Labor politician arranged for donations from Philip Morris for HSU elections in 2009 and 2012, after chatting with a friend and former HSU official.

During the 2013 conversation, Bolano was asked whether Feeney had secured "tobacco money" for him again, the royal commission into union corruption has heard.

"I was perplexed by his question and he then told me that funding had been provided by a tobacco company for my 2009 election campaign," Bolano said.

In the lead-up to the 2012 HSU elections, Bolano was discussing the donation with Kathy Jackson, a former HSU official turned whistleblower.

He said Jackson replied with "words to the effect of, 'Yes, didn't you know? I thought you did'.”

"Ms Jackson then advised me that Mr Feeney had facilitated the donation," Bolano told the commission.

He said he did not know how much was given by Philip Morris or why it made the donation.

"I couldn't see what interest Philip Morris would have in supporting a candidate in the Health Services Union," he told counsel assisting the commission, Jeremy Stoljar SC.

Several unions and opposition leader Bill Shorten also donated to Bolano – across factional lines – after a split of the Victorian ALP right.

"Mr Bill Shorten donated $5,000," Bolano said.

"I said 'Why on earth would he do that? He's our enemy'."

To which Bolano's campaign manager Stephen Donnelly replied: "He's having a bet both ways."

Bolano's suggestion that the money be returned was "laughed off" by Donnelly, he said.

Meanwhile, HSU Victorian secretary Diana Asmar was standing against Bolano, but her uncle, Victorian MP Nazih Elasmar, contributed to Bolano's campaign.

"I got told there was a family feud and he didn't like his relative," Bolano said.

"And I think he was involved in the factional ALP politics."

Earlier on Monday, the commission heard that intimidation and financial, legal and physical harassment were used by senior HSU members to silence and marginalise whistleblowers.

Two former senior members of the HSU, including disgraced former MP Craig Thomson, have already been sentenced over fraud and theft of HSU money.

The hearing continues in Sydney.