The secret trial of Kathy Jackson

The former union secretary’s trial was suppressed. Now, the ‘dirty, shark-infested pool’ where Kathy Jackson swam can be revealed.

Disgraced former union boss Kathy Jackson.

The “dirty, shark-infested pool” where Kathy Jackson swam can finally be revealed a year after a jury was told of the Health Services Union secretary’s abuse of office.

Details of Jackson’s trial last October and November were suppressed pending the outcome of a second trial, which resolved in a plea deal on Monday.

Levelled against the woman who originally hit the headlines for exposing the corruption of others in her union were 22 charges in her first trial.

There were 18 of theft, three of obtaining financial advantage by deception and one of obtaining property by deception, including an allegation she stole $63,000 from the union to pay off her mortgage.

One of the charges of obtaining financial advantage by deception was dismissed by County Court judge Mandy Fox.

Former HSU boss Kathy Jackson and her husband Jeff.

For the first of two scheduled trials, the jury convicted Jackson of just two charges of obtaining financial advantage by deception.

One conviction related to Jackson using $13,100 from HSU Victoria No 3 branch, which she led at the time, to reimburse herself for travel expenses for a trip to the US.

The other conviction was related to Jackson using union funds from her branch to help her then husband, Jeff Jackson, pay off a $22,000 debt for his Mercedes.

She had claimed her HSU No 3 Branch Committee of Management had authorised the payment as “legal expenses”.

Jackson’s barrister Theo Alexander, paid to represent her through Victorian Legal Aid, successfully explained away the other allegations against his client as “ugly things happen for a good result” or “realpolitik”.

By this he meant politics or diplomacy based on the given circumstances rather than morals or ethics.

Jackson, under oath from the witness box, told the court of other backhanded deals, including paying former husband $20,000 for work he had done for the HSU’s NSW branch, at the direction of her then ally, HSU NSW secretary Michael Williamson.

Williamson was later jailed for a maximum of 7½ years for embezzling hundreds of thousands from the union. He was released in March last year after being paroled after five years.

Jackson explained the $22,000 paid to Jeff Jackson to the court: “It was the first payment out of the NHDA (National Health Development Account), but I suppose it was the price of doing business with the New South Wales branch.

Kathy Jackson outside The Hospital Court Complex in Sydney last month during a hearing over the $30m estate of Sydney barrister David Rofe. Picture: Britta Campion

“What I mean by that is to get to the position that I got to, in the Health Services Union, you don’t get there by like not playing the game back with them. What I mean by that is they want to make sure that they have something on you … but as far as I was concerned, as long as the work was actually done and performed, which it was.”

Jackson’s barrister asked her on the stand whether she stole from the HSU.

“Absolutely not, and that’s what I am mostly upset about,” she said. “I care, and still care, for those members of the union, not just the Health Services Union but unions around the country.

“I am just absolutely devastated that I have ended up in this position by trying to do the right thing all the way along.”

Jackson said she had tried to be an effective union leader and had “every single thing I’ve ever done in my life … forensically torn apart”.

Jackson posed the question to the jury: why would she have taken action against the improper conduct of disgraced former MP and union leader Craig Thomson and Williamson if she too risked her own exposure.

“It is just nuts, absolutely nuts to do that,” she said.

The funds at the centre of these allegations came from a Commonwealth Bank account, which Jackson had named the “National Health Development Account”.

This bank account contained $250,000 from Melbourne’s Peter MacCallum Cancer Centre, which Jackson said was paid as a penalty to the HSU for breaching the employment entitlements of staff at the centre.

The legitimacy of how these funds were used after the money was paid to the HSU and then transferred to the NHDA account that Jackson personally set up was highly disputed during her first trial.

Jackson said she had tried to be an effective union leader and her everything she had achieved had been ‘forensically torn apart’.

Jackson described the so-called NHDA with the Commonwealth Bank as an “off-books account … to be used on furthering the interests of the members, political donations, travel for the (Branch Committee Of Management) and others”.

She told the court the money was to be used to get members to attend stop-work meetings or delegates’ meetings in cases where staff were not released by employers and would lose pay.

She said the account wasn’t audited and was kept off books to avoid other unions knowing what her No 3 union branch was spending, what elections it was funding and what was happening internally.

Jackson’s barrister told the jury in his closing argument the NHDA wasn’t a secret account as the prosecution had tried to argue.

He said this bank account had a purpose, not just existing as one for Jackson to use “willy-nilly for anything she wanted”.

“Some people do things outside of the book and for you to appreciate that that is what happened in the NHDA, you would have to really open your mind to the fact that who knew this is how party politics worked,” he said. “Who knew that in Australia all this stuff went on behind the scenes?”

Alexander said Jackson was working in a “dirty, shark-infested pool where, quite frankly, the weak don‘t survive, they get used as political footballs, members get the leftovers, and you have got to be friends with people like Michael Williamson if you want to do your job as a union member”.

He presented the jury with Kathy Jackson the whistleblower, a woman who worked hard for the members of the HSU, who grew up in a Labor-oriented family and was told by her parents that she had to join a union.

During the trial, the jury was also presented with a tearful Jackson who has been diagnosed with major depressive disorder, PTSD and anxiety.

She was a wounded crusader who was owed the presumption of innocence and had the truth on her side.

“We heard that Kathy Jackson worked very hard for the members of the HSU, there was no dispute about that,” Alexander said.

“She was universally regarded as a good, competent branch secretary. She was also on good money. She had available HSU funds and she really didn‘t need to steal money. I mean, fundamentally, she didn’t need to steal.”

Alexander said it was a race for Williamson to bring down Jackson before she could bring him down.

“Bring Kathy down first and then keep your public position and go, ‘Look, she’s a liar, she’s a criminal, don’t trust her, I’m fine’ or he got arrested first,” Alexander said.

Alexander highlighted the incongruity between the allegations against his client and her earlier acts as a whistleblower against fellow union leaders and HSU colleagues Craig Thomson and Williamson.

Kathy Jackson at the County Court in Melbourne in November 2017. Picture: AAP

He told the court Jackson went to police twice.

It made no sense, according to Alexander’s logic, that Jackson would “knowingly bringing down the house of cards down around her, satisfied that the plot would never be discovered and that she would end up queen of the Health Services Union and $398,000 richer.

“If you‘re someone who’s smart enough and cunning enough to go around and make all this plan to hide your own misdeeds, then the last thing you’re going to do is go into the public media, go into the public world and go and make some sort of big song and dance about someone else’s criminality, lest your own get discovered.

“No one in their right mind, and especially someone who‘s been described as they’ve been described, as the criminal mastermind, would go out into the public and bring all this down around themselves. It really just does not make sense.”

Prosecutor Mark Gibson SC told the court of a deceitful Jackson who covered her tracks through doctored records to fake official approval of her personal spending in fabricated HSU No 3 BCOM minutes.

“The false minutes, the Crown say, were designed to falsely justify the NHDA existence to the auditors and prevent having to further justify expenditure or stave off further queries,” Gibson said.

He told the court Jackson hid funds for her former husband’s car as legal expenses for a former female worker who had no association with the HSU for years.

Countering this allegation, Jackson claimed Jeff Jackson had arranged for the payment for his Mercedes without her knowledge.

Kathy Jackson at the Melbourne Magistrate Court to face 70 theft and deception charges in September 2016. Picture: David Crosling

On the witness stand Jackson said her former husband – who was at the time the leader of another Victorian branch of the HSU – first told her he requested the $22,000 that went to him by cashing in his leave entitlements.

“I became aware of that (the truth) much later when he told me how he paid for it and I remember being very angry with him … I had a complete meltdown over it, you know, baskets, rubbish bins thrown around the office,” she said.

Alexander asked the jury to take into account, while determining the truth of the matter, the state of the couple’s troubled relationship.

“If they were still married and everything was hunky dory, you‘d go, ‘Well, she did a bit of a dodgy, so she’ll get him a car’,” he said

“But if you are in an … acrimonious situation, the last thing you are going to do for your partner is go and give him a big present of a car, or engage in (dishonesty) for them.”

The jury agreed with Gibson that Jackson’s story regarding the Mercedes was “nonsense” and found she had laid a false trail in the BCOM minutes to throw auditors off.

The jury also agreed with Gibson, regarding the second charge about a trip to the US, that she submitted receipts knowing she was being reimbursed for the same expenses from another source.

In the process Jackson deceived the union’s accountant Jane Holt and double-dipped for her trip expenses.

Alexander said Jackson, while playing the game of union politics, never forgot who she was playing it for, and why she was there.

He again reminded the jury of her whistleblowing: “She was asked, ‘Why did you go to the police? Why do you do it?’ She said, ‘I did it for the members. That’s what I had to do. Because I thought it was the right thing to do’.”

Jackson avoided a second trial, however, by admitting she did the wrong thing.

On Monday, Jackson pleaded guilty to two counts of obtaining financial advantage by deception, swindling the HSU No 3 out of $67,792.85.

She had been facing 48 charges.

Jackson’s ordeal has dragged on for four years since she was first arrested and faced a long list of charges.

Jackson managed to go from 70 charges to just four convictions.

Given the nature of the crimes, it is unlikely Jackson will be sent to jail.

However, her reputation as a crusader against dirty union bosses has been tarnished.

Jeff and Kathy Jackson.