Former Health Services Union leader Kathy Jackson charged with criminal misconduct

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Kathy Jackson is facing dozens of fraud related charges and the prospect of a jail term over allegations she misappropriated hundreds of thousands of dollars of union funds.

Ms Jackson was charged on Wednesday via summons in NSW with 70 counts of obtaining property by deception and other fraud related offences.

She refused requests to be interviewed by Victorian detectives, despite rising to fame as a union whistleblower who had assisted police in investigating her former union colleagues.

Fairfax Media has confirmed some of Ms Jackson’s closest former union allies have agreed to testify against her.

She has been summonsed to face the Melbourne Magistrates Court on September 19.

The police investigation has spent months tracing the movement of union funds into bank accounts controlled by Ms Jackson.

The total amount of the alleged fraud is believed to be in the hundreds of thousands of dollars.

Last August, Ms Jackson was ordered to pay $1.4 million in civil damages after she was found to have stolen money from the HSU.

Her unauthorised spending included large purchases of clothes, fine dining, grocery and liquor shopping, mortgage repayments, flights and hotels.

Federal Court Justice Richard Tracey found Ms Jackson had misused her position as head of the union to fraudulently gain financial advantage.

He also found Ms Jackson had misappropriated union money from a financial settlement with the Peter MacCallum cancer hospital in Melbourne.

Ms Jackson shot to prominence as a whistleblower alleging corruption within her disgraced union involving former ALP national president Michael Williamson, who is now in jail.

As the newly-elected Abbott government pursued its political enemies through its royal commission into union corruption it held Ms Jackson up as a heroine.

Former prime minister Tony Abbott once lauded her as a “brave, decent woman”, while frontbencher Christopher Pyne said she would be remembered as a “lion of the union movement”.

In its early stages, Ms Jackson was treated more gently by the royal commission than other union and Labor witnesses.

But things started to turned sour for Ms Jackson following Fairfax Media investigations from April 2014 into her control and use of a union slush fund.

Fairfax Media also exposed details of questionable deals struck by Ms Jackson in 2003 with the Peter MacCallum hospital.

A $250,000 payment from the hospital to her union helped settle a back-pay dispute where workers were owed more than $3 million. But the workers did not receive that back-pay – the money was used to kick-start a slush fund used by Ms Jackson for political and personal purposes.

Her stocks hit a new low in 2015 when she gambled on an intimate profile with ABC’s Four Corners that turned into a public relations disaster.

Ms Jackson was an active player in Labor factional politics in Victoria and a long-time ally of right-wing powerbroker David Feeney. She was known to be interested in a parliamentary career.

She had also been close to Bill Shorten until the two fell out badly ahead of the 2007 federal election, including over which candidate to support in a bitter preselection fight for the marginal seat of Corangamite.

It is likely Ms Jackson will face a committal hearing in the Melbourne Magistrates Court next year. If the charges are proven, the former union leader could face a jail sentence or large fines.

She has previously denied any wrongdoing and did not return calls on Tuesday.

In its final report in December 2015, the royal commission recommended Ms Jackson also be investigated for giving potentially false or misleading evidence.

It is understood she is still being investigated for possible perjury related offences and may face charges on a second front.

The investigation has been run by Victoria Police’s Taskforce Heracles, which in December last year charged senior CFMEU officials John Setka and Shaun Reardon with blackmail.

“Taskforce Heracles detectives have charged a 49-year-old NSW woman with 70 counts of theft and deception-related offences as a part of an ongoing investigation,” a Victoria Police spokeswoman said.

“She will appear at the Melbourne Magistrates Court on 19 September.”

The taskforce includes AFP and Victorian police investigators, and was set up as part of the royal commission into union corruption.

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