Michael Lawler linked to Kathy Jackson’s rorted funds for mortgage

Court documents could tie Kathy Jackson’s partner to her rorted union funds.

Kathy Jackson and Michael Lawler at the Federal Court in Sydney earlier this year. Picture: John Feder.

Documents underpinning this week’s Federal Court finding that now-disgraced union leader Kathy Jackson misused $1.4 million have revealed a string of banking transactions related to a mortgage that could tie her partner to questions of whether he benefited from money rorted from low-paid union workers.

The Health Services Union told the court that the trans­actions represented a money trail wherein Jackson withdrew cash funds from union accounts and made mortgage payments on her home in 2008, which, when sold, formed part of the profits she later sank into a NSW south coast home she and partner Fair Work vice-president ­Michael Lawler share.

Lawler did not respond to questions yesterday on whether he was aware of the transactions. He also did not respond to questions on whether he had benefited, inadvertently or otherwise, from any funds Jackson was found to have misused.

The Weekend Australian also asked ­Lawler whether he had ­accompanied Jackson on any part of a three-month long trip she took between June and October 2010, or any other holiday or trip cited in the Federal Court findings against her this week.

When Lawler and Jackson openly started their life together in 2008, she was a powerhouse union ­figure and a dramatic, high-stakes ALP factional player. He was a former barrister appointed by the Liberal Party as a vice-president of the union regulator Fair Work Australia. An arresting couple, they were a match made in industrial relations heaven.

Seven years later, with their lives totally entwined, Jackson is a bankrupt, ordered to repay the Health Services Union $1.4 million in rorted and misused funds, and Lawler is a highly paid controversial player inside Fair Work who has taken nine months of sick leave, standing by her side.

Darker shadows hover over the pair as Jackson’s creditors begin untangling bank accounts and finances that could potentially engulf Lawler also in damaging questions of whether he has benefited — either knowingly or inadvertently — in Jackson largesse that wrongly came from union funds.

Jackson’s rampaging extravagance was laid bare this week by a Federal Court decision that she deployed union money into a personal wheel of fortune. It was the moment when her corruption-busting image proved nothing but a mirage.

She intoxicated her political supporters with a megaphone in one hand attacking others for stealing from the HSU while at the same time she had her other hand reaching into union bank accounts for ­holidays, home furnishings, art, ­alcohol, groceries and mortgage payments.

Jackson’s actions raise questions about her relentless pursuit of enemies.

While outing former HSU boss Michael Williamson and her predecessor as national secretary of the union and later ALP member for Dobell Craig Thomson for misuse of union funds and credit cards for personal travel and lifestyle, Jackson was doing the same.

Almost with the hallmark of an arsonist or killer returning to the scene of the crime to help police, Jackson blew the whistle on colleagues as she continued to pillage union funds herself.

In doing so, she misled and made a mockery of some of her biggest supporters, including Tony Abbott and Workplace Minister Eric Abetz.

In the end, Jackson has ­become a poster girl for widespread union corruption and the dreadful culture of some modern unions that the government has sought to stamp out.

Her reach spread throughout the industrial relations system, with factional power that made her once an ally and later a bitter foe of ALP leader Bill Shorten, who destroyed Jackson’s powerbase by putting the HSU into ­administration.

Jackson jumped the fence from her Labor links to heroine of the Liberal Party’s most fierce anti-union warriors.

Today, the very government to whom Jackson leaked and proselytised on corruption has been placed in the awkward position of having protected a golden girl now turned to dust.

On June 12, 2013, Jackson ­addressed the HR Nicholls ­Society, declaring: “I want to see wrongdoing exposed and I’d like to see reforms made to make union leaderships more accountable to members — which would protect against future financial and political corruption.’’

Jackson burned firstly the ­Gillard government with her ­attacks on Thomson at the peak of Labor’s crisis over a hung parliament that rested by threads on his vote, and now, after the Federal Court’s ­indictment, has virtually done over her conservative ­supporters, leaving them squirming.

In her wake, Lawler, with nine months’ fully paid sick leave as he supported Jackson in the past year, has become another albatross for the Prime Minister, the man who ­appointed him to the FWC.

In breathtaking detail, judge Richard Tracey in the Federal Court laid out the case to force Jackson to repay the HSU sums of money that she had no authority to spend on herself — and which she had used in ­addition to her $270,000 salary.

She was ordered to compensate the union for $284,000 taken from a slush fund (known as the NHDA fund), which Jackson created using money paid by a Melbourne cancer clinic to settle an industrial dispute.

Regarding this NHDA fund, Justice Tracey wrote: “She had chosen an ambiguous title for the account and represented (falsely) that she was the chairperson or chief officer of a non-existent ­unincorporated body which had authorised her to open the ­account. Once the funds were in the account, she expended them, at her discretion and in secrecy.”

In the defence, filed with the court, Jackson admitted she had used union funds for personal purposes. Justice Tracey wrote this week: “Specifically, she admitted that $4500 drawn using a cashed cheque dated 19 May, 2008, formed part of a cash deposit into a credit union mortgage account, operated by her and her then husband, on 29 May, 2008.” She used part of a $7500 cheque dated ­December 2008 to fund a $5000 cash deposit into her mortgage the same day; and she paid $3000 of $6000 drawn with a cashed cheque dated September 2009 into a personal account.

These sums were taken from union accounts and paid into her personal accounts after Jackson split with her former husband, Jeff Jackson. Kathy Jackson in 2013 provided a witness statement to the royal commission into trade unions saying she separated finally from Jeff Jackson in March 2008 and started her new long-term relationship that month.

During a hearing before Justice Tracey in June, barrister for the HSU Mark Irving told the court that these amounts — totalling $15,700 — had been used to make mortgage payments on Ms Jackson’s Balwyn home in Melbourne, over a period of six months in 2008.

In mid-2012, Jackson and Lawler moved back to Sydney together. She bought a home in Wombarra on the NSW coast for $1.3 million, using the Balwyn home as security and with Lawler as guarantor because Jackson was by then fighting with the HSU and unemployed.

When the Balwyn home was sold in 2013, Jackson paid the net profits of close to $620,000 into the Wombarra property, thus ­reducing financial stress on Law­ler, who was paying the mortgage.

In the court on 24 June this year, Justice Tracey summed up the transaction in a question to ­Irving: “So according to your submission, the evidence shows that $15,700 came out of the account in 2008 and went into the mortgage account relating to the Balwyn property before it was sold and ­before the Wombarra property was purchased?”

Irving responded: “When the Balwyn property was sold, the proceeds of the sale … are traced, as a result of the transactions in ­October 2013, to the Wombarra property.”

In an affidavit this year ­detailing transactions on the Wombarra mortgage that was both guaranteed and paid by Lawler, Jackson listed three ­deposits to Wombarra as having come from the profits on her Balwyn home: on October 23, 2013, she paid in $248,757; on October 29, 2013, she paid in $250,000; on October 29, 2013, she paid in $122,000 — totalling $620,700.

The same affidavit shows a Commonwealth Bank account in Jackson’s name that lists investment home loan transactions for their Wombarra home in the name of two borrowers — Lawler and Jackson — using the Balwyn property as security for the loan until it was sold.

The Opposition Leader yesterday made it clear Labor was considering whether to seek Lawler’s removal from Fair Work through a parliamentary challenge, the only legal route for disciplining or removing members of the ­commission.

Shorten turned the attack on the Prime Minister’s appointment of Lawler, saying: “We’ll see what evidence emerges in coming days and weeks, but there is no doubt that Mr Abbott has said clearly in the past he thinks this person is an excellent person.

“Yesterday, he significantly wouldn’t back him in and he challenged Labor to take up its options further, and we will certainly take up Mr Abbott’s ­ invitation and investigate what ­options there are.”

The Federal Court ruling on Jackson has also showed that misuse of union funds occurred within days or months of a powerful statement of support for Jackson from senior Liberal figures.

On three separate occasions in August 2011, Abbott extolled ­Jackson’s courage in doorstop ­interviews and in parliament, ­calling her “a brave woman who wants to see the right thing done’’.

On August 24, 2011, Christopher Pyne told Sky News that Jackson had referred union corruption to police and had shown “real courage and integrity’’.

And yet, just three days earlier, August 21, 2011, Jackson had touched down from a month-long European holiday that took her to Los Angeles and London and then on to Hong Kong, coinciding with a large cash withdrawal she made from the union’s NHDA ­account.

On May 8, 2012, Christopher Pyne told parliament: “They have traduced the reputation of Kathy Jackson, who was one of the few who had the courage to stand up.”

Just four months later, Jackson drained $9000 in cash from the union’s NHDA fund in another cash withdrawal.

On May 21, 2012, she appeared on the ABC’s 7.30 program to give a heartfelt rebuttal of Thomson’s claims, made in his speech to parliament, where he accused her of driving a union-paid Volvo, ­extracting childcare and gym fees from the union coffers, taking many overseas trips at union ­expense, and doubling her salary to $270,000 after his departure.

Asked whether she was in part responsible for the circus surrounding Thomson because of the fact she had repeatedly made ­accusations against him for corruption while he had not been charged, Jackson said the HSU was a union with deep-rooted corruption; she commended police for trying to get to the bottom of the Williamson and Thomson corruption. She said she had tried to get “someone to listen to me” about that corruption and was ­finally forced to go to the police and the media to bring “the antiseptic of public scrutiny”.

She described Thomson as ­delusional.