– Julia Gillard’s high-stakes election strategy was rocked when ex-Labor MP Craig Thomson was arrested on 149 fraud charges – including allegedly using union funds to pay for prostitutes.
In a horrid start to the political year for the Prime Minister, police arrested the MP yesterday over the allegations he misappropriated hundreds of thousands of dollars of funds while he was Health Services Union secretary.
The charges follow an investigation by Victorian Fraud Squad detectives who are understood to have been told of at least one overseas witness in relation to claims Mr Thomson spent more than $7000 of union monies on escort services.
A shaken Mr Thomson emerged from the Wyong Court late yesterday after being granted bail, including one condition that he not contact directly or indirectly anyone he is alleged to have engaged for sexual services.
The one-time Labor rising star – who was dumped by the ALP over his union indiscretions – will travel to Melbourne next week for a court hearing and vowed to vigorously defend the multiple charges.
Victorian Fraud Squad detectives – who invited Mr Thomson to travel to Melbourne before Christmas – will allege Mr Thomson used HSU funds to pay for escorts and other personal items.
Police have worked closely with Fair Work Australia, which has also taken action against Mr Thomson, including over claims that he withdrew $102,337.47 in cash advances between 2002 and 2007.
The FWA court action – which is set down for a directions hearing in Melbourne this morning – may be deferred to allow the more serious criminal allegations to be heard by a court.
And in a further setback for Mr Thomson, NSW Police confirmed that he remained a person of interest in relation to Strikeforce Carnarvon. That investigation has already led to multiple charges being laid against former Labor powerbroker and union boss, Michael Williamson.
Labor MPs reacted with horror upon hearing of the charges laid against their former colleague, who received more than $300,000 in legal assistance from the NSW ALP as he fought the allegations of fraud.
The MP is alleged to have used two union credit cards to make cash withdrawals and for unauthorised transactions, including more than $7000 spent on prostitutes.
The Herald Sun understands police have engaged forensic experts to try to prove their case against the MP, whose credit card, driver’s licence and mobile phone has been linked to transactions involving escort services in Sydney and Melbourne.
The Prime Minister declined to comment on the arrest of her former colleague, telling reporters in the flooded city of Bundaberg that it was a matter for the police.
But Opposition Leader Tony Abbott said the Thomson scandal reflected badly on Ms Gillard’s political judgement.
During a brief appearance in Wyong Court, Mr Thomson was formally charged with one count of misuse of a credit card to the value of $330.
He did not enter a plea but was remanded to appear in the Melbourne Magistrates Court on February 6th.
He was given bail on three conditions, including that he notify police within 24 hours’ notice of any travel overseas or interstate, with the exception of travel to Canberra.
Mr Thomson nodded when he was asked if he understood the bail conditions.
Kathy Jackson, the HSU whistleblower who initially took the allegations to the police, applauded the move – Steve Lewis