Andrew Landeryou · @landeryou
24th Aug 2014 from TwitLonger
The Aus suggests Kathy Jackson funded divorce settlement with HSU money #turc
Kathy Jackson’s divorce in spotlight over big payments to ex-husband
BRAD NORINGTON THE AUSTRALIAN AUGUST 25, 2014 12:00AM
THE divorce settlement of corruption whistleblower Kathy Jackson is likely to be drawn into a royal commission investigation because she paid her ex-husband large sums of cash from the union she controlled after their separation.
Ms Jackson’s ex-husband, Jeff Jackson, will be called as a surprise witness at the royal commission into union corruption in Sydney later this week.
Questions to Mr Jackson are expected to focus on why union members’ money was transferred to him by his former wife from her Health Services Union No 3 branch in Victoria — including payments of $50,000 in March 2009 and $58,000 in April 2010. The Australian reported earlier this month that the royal commission’s scrutiny of Ms Jackson’s money transfers to her ex-husband could involve a much larger amount, totalling about $200,000.
Ms Jackson, who won public praise for exposing the large-scale fraud of her now jailed former union ally Michael Williamson, is at the centre of an investigation by the royal commission into her own alleged financial irregularities.
She is believed to have reached a divorce settlement with Mr Jackson in the first few months of 2010 — after the couple separated in March 2008 — that involved making payments to him over time.
Under the divorce deal, Ms Jackson kept the couple’s home in the Melbourne suburb of Balwyn, which she sold in July last year for $1.8 million. Mr Jackson is understood to have kept the couple’s investment property in Box Hill, Victoria, which he sold in 2010 for $855,000. He also received a cash component believed to be about $300,000 and kept his Mercedes-Benz car.
Ms Jackson, who will also be called to the royal commission this week for her third round of evidence, was initially a friendly witness in June when she was quizzed about the harsh treatment she received from colleagues after blowing the whistle on Williamson, a former union ally and ALP national president.
She suddenly turned hostile and forced an adjournment of proceedings during her second appearance last month — even accusing the counsel assisting, Jeremy Stoljar SC, of “ambushing” her — when Mr Stoljar revealed details about a $50,000 cash withdrawal that Ms Jackson made on March 10, 2009, that she claimed she did not remember when in the witness box the first time.
Mr Stoljar said, based on the commission’s investigations, the $50,000 was a direct payment to Ms Jackson’s ex-husband a day after she shifted the same amount of union members’ funds to a non-union CBA account that she controlled.
The other known $58,000 payment that Ms Jackson made directly to Mr Jackson, on April 7, 2010, came from the general accounts of Ms Jackson’s HSU No 3 branch, and was recorded as a “loan to Vic No 1 Branch”.
However, no evidence has been found so far to indicate that the $58,000, if it was a loan, was ever repaid.
Mr Jackson had been the secretary of the HSU’s No 1 branch, another division of the union in Victoria, but he was no longer a union official when he received the $58,000.
While it is not clear what the $58,000 payment was for, and Ms Jackson has declined to respond to questions from The Australian seeking clarification, it is believed she might have justified the payment to colleagues in 2010 as her No 3 branch coming to the aid of her ex-husband’s cash-strapped HSU No 1 branch to cover allegedly owed entitlements of Mr Jackson after he had left his position there.
However, if this explanation was accepted, it puzzles lawyers and union officials why Ms Jackson paid her ex-husband directly, and did not make a bank transfer to his former HSU No 1 branch so that the funds could be processed through payroll and be recorded for tax and superannuation purposes as a salary payment.
When he received the earlier $50,000 payment from Ms Jackson in March 2009 in the midst of the estranged couple’s divorce negotiations, Mr Jackson was still the head of the HSU No 1 branch.
In further questioning at the royal commission last month before she shut down proceedings, Ms Jackson claimed that this payment could have been related to a legal battle her estranged husband was waging with union rival Pauline Fegan, but the actual detail remained unclear.
Mr Jackson was also embroiled at the time in a scandal over a union-issued credit card and brothels — not dissimilar to the controversy that landed former HSU official and federal Labor MP Craig Thomson in trouble.
The scandal contributed to Mr Jackson’s exit from his union job not long after, and he has been unemployed since.
Mr Jackson is expected to face other questions this week about why Ms Jackson, when the couple were married, made a series of payments from her HSU No 3 branch to a company called Neranto No10 Pty Ltd that the coupled jointly owned.
Ms Jackson has told the royal commission that these payments were made for consulting work Mr Jackson did for her branch during periods when he was not necessarily running his own branch.
Ms Jackson has so far been vague about what work Mr Jackson allegedly did for her HSU branch. Also left unexplained at this stage are an extraordinary number of cash withdrawals that Ms Jackson made from her CBA account after she transferred union funds to it. Ms Jackson has said that $284,500 in union funds she shifted to this non-union CBA account that she controlled alone was pre-authorised by a general resolution of her HSU No 3 branch committee of management.
She has also said in the royal commission that a decision to use this money for broader campaigning purposes — as well as $4000 a year she was allegedly authorised to spend on herself from these funds — was justified because of a “windfall” penalty payment to the union from a Melbourne cancer hospital in late 2003 following a dispute over $3.1 million in unpaid wages to its workers.
It appears workers agreed to give up their back pay entitlement after being told about a new career structure, but did not necessarily know about the $250,000 payment made by their employer to Ms Jackson’s union branch.
It also appears that some, possibly most, of Ms Jackson’s HSU No 3 branch committee of management did not know that she was shifting union money to a non-union bank account.
From the time of Ms Jackson’s marriage split in 2008 until she closed her non-union CBA account last November, she made many large cash withdrawals that she has been unable to explain — apart from claiming they were for union or political campaign purposes.
She claimed in the royal commission last month that money in the CBA account was no longer union members’ money after it arrived in the account.