Former Health Services Union (HSU) boss Kathy Jackson (nee Koukouvas) has been ordered to pay $1.4 million in compensation to the union for misappropriating funds.
The judgment in the Federal Court this week came after damning evidence implicated Jackson in allegations of large-scale theft and misappropriation of HSU funds via cash cheques, a secret slush fund and three union-issued credit cards.
The HSU alleged she wrongfully spent $1.4 million, dipping into union funds for years to fund her own lavish lifestyle.
Revealed in bank statements subpoenaed by the HSU, Jackson spent $660,000 on clothes at high-end department stores, dinners at Melbourne’s top-rated restaurants and flights and accommodation for overseas holidays including to New York, Hong Kong and Europe.
The court heard Jackson even used union funds for her home mortgage repayments and more than $50,000 in contributions towards a divorce settlement to ex-husband Jeff Jackson.
The most blatant of Jackson’s alleged misappropriation, said the HSU, were regular withdrawals of “vast wads” of cash of up to $9,000 a time – about $250,000 in total – from her union branch’s operating funds in Victoria. Almost all of it was allegedly pocketed for her own use.
The trial heard last month that evidence existed showing Ms Jackson had withdrawn funds from union accounts while in Las Vegas, San Francisco, Washington and London.
She was also accused of using union funds money to cover business class airfares for her daughter to Europe, shopping at Myer and David Jones and a single $14,000 dinner bill for the exclusive Melbourne restaurant Fenix.
Jackson succeeded Craig Thomson as HSU national secretary when he entered federal parliament as Labor MP for the NSW central coast, and famously blew the whistle on his misappropriation of union funds.
Last year Jackson tried without success to have the civil trial against her abandoned, telling the court in October she was mentally unfit to defend herself. She did not attend the Federal Court during the hearing and has always claimed her use of union funds was appropriate.
The judgment by Justice Richard Tracey is largely symbolic as Jackson declared bankruptcy just before her civil trial began.