Federal court finds bankrupt whistleblower used union credit cards, a slush fund and cashed cheques for personal purposes while the HSU’s national secretary

This article is more than 5 years old

This article is more than 5 years old

Bankrupt whistleblower Kathy Jackson has been ordered to pay the Health Services Union about $1.4m after a court found she misappropriated the union’s money.

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Federal court justice Richard Tracey on Wednesday found Jackson had used union credit cards, a slush fund and cashed cheques for personal purposes while she was the union’s national secretary.

His judgment followed a civil trial last month in which Jackson declined to participate after declaring bankruptcy just before it began.

He said Jackson used $284,000 in the National Health Development Account, a slush fund she set up in 2003, without authorisation.

“Ms Jackson used the money in the NHDA account for a range of purposes, including part of a divorce settlement, holiday expenditure, retail purchases and cash withdrawals,” Tracey said.

“Other money was spent on political campaigns in unions and in the ALP.”

Jackson withdrew a total $239,837 in cashed cheques, gave $100 each to branch committee of management members at meetings, and kept the balance in a “kitty”.

“Ms Jackson drew on the kitty for personal purposes such as the reduction of a credit union mortgage account operated by her and her former husband,” Justice Tracey said.

The withdrawals were also falsely reported in a ledger.

Justice Tracey said a $63,000 honorarium paid to Jackson was not authorised and should not have been paid.

Between 2003 and 2011, Jackson used credit cards to pay for travel, retail, food, alcohol entertainment and fitness.

The court found $305,828 chalked up on union plastic was Jackson’s personal spending.

As well the $1,338,626 in damages, she was ordered to hand back $67,912 in overpaid salary.