The Federal court-appointed Administrator of HSU East has written to its officials explaining that there are unpaid staff entitlements of as much as $2 million amid concerns about the ongoing financial stability of the union, until recently run by scandal-plagued Executive President Kathy Jackson and NSW officials.
The officials, removed by court order, were in some cases paid officials and as such accrued “entitlements” like annual leave, long service leave and so on.
A union branch that once had 70,000 members that collapsed unable to meet these obligations could constitute a serious embarrassment and reputational catastrophe for the labour movement, perhaps even greater than that perpetrated by Jackson herself and her foes, union insiders have told VEXNEWS.
Despite initially self-styling as a whistleblower, Jackson has faced credible and serious allegations of serious financial wrongdoing in recent times including in relation to the purchase of a white Mercedes convertible for her then husband, misuse of credit cards (spending $150K+ on union credit cards in the space of twelve months alone) and other financial misdeeds that have rocked her credibility even with once enthusiastic journalist cheerleaders who rightly judged her to be “good copy” because of her propensity for sensational claims against her foes.
Her ultimate “jump the shark” moment was addressing the HR Nicholls Society, cosying up to former Workplace Relations minister Peter Reith, who now favourably quotes her in oped pieces. Those who know the former Labor Pledge Left (its most militant left group) Noam Chomsky fan well think this quite a remarkable transformation.
Beyond that, the former HSU East president Jackson – still the union’s national secretary (for now) – has has publicly admitted driving a Volvo luxury SUV that cost the best part of $100,000, copping a $270,000 per annum salary which she variously described as “obscene” and “slightly excessive”, employing her current lover’s teenage brats on higher wages than union members get and told Chris Uhlman on the ABC’s 730 Report she received funds for union elections from union coffers “authorised by the committee of management” (which, if true, was in blatant violation of the Fair Work Act and union rules).
Most presumed the union had sufficient financial strength to withstand even the most enthusiastic union leadership pocket-lining, but union insiders fear that Jackson has managed to push it over a cliff with genuine fears about whether staff entitlements can be paid and whether the union’s branches in Victoria and New South Wales are insolvent.
Insiders believe that the now deposed Jackson-led regime ran up bank debt of around $26 million, supported by real estate assets valued in more robust times at $28 million, a wafer-thin margin that would be wiped out by a need to flog the properties quickly and by massive liabilities like the entitlements for former officials. At the core of the assets are strata-titled Sydney office floors that realtors explain are not always easy to sell, certainly not as easy as independent buildings. In a firesale scenario, millions could be lost, leaving the union open to further litigation from lenders.
The biggest creditor – the Commonwealth Bank – has already expressed fears about whether the union is a going concern, even sending a barrister along to the Federal Court to represent their interests in the appointment of an administrator.
There are also rumours of substantial debts owing to a number of unsecured creditors who have threatened legal proceedings if they are not paid promptly.
Legal sources say the Administrator – former federal court judge Michael Moore – is just coming to terms with the extent of the uncertain and precarious financial situation and has had protracted discussions with secured creditors. He is believed to have sought advice on his own personal financial liability in the event the union branch collapsed, unable to pay its debts when they were due and payable.
Given the scope of the Health Services Union’s current coverage in NSW, ACT and Victoria, in the long run if it had the opportunity to trade through, most union insiders believe the union could survive and even substantially grow (especially in Victoria where its Jackson-aligned organisers are notoriously lazy, known principally for frequenting South Melbourne coffee and hot chocolate providers while having little or no previous connection to the health sector like Kathy Jackson’s shopping buddy and ALP member Fleur Behrens).
But after yesterday’s entitlements bombshell, there are growing concerns the union won’t be able to financially survive the Jackson era of mega-salaries, credit card abuse and grotesque corruption that not even plastic surgery could hide.
In the event of a financial collapse that disadvantaged creditors, those responsible for malfeasance from the organisation could be held liable personally and required to make repayments, legal sources have told VEXNEWS.
The Sunday Herald Sun has reported on the disgraceful situation, with their intrepid investigative reporter freshly returned from the Wall Street Journal and Offspring fan James Campbell revealing the HSU’s administrator has questioned the validity of the “entitlements” supposedly owing to Jackson & Co., even questioning whether the “obscene” pay-rises greedily snaffled by Jackson & Co. were legitimately approved by union decision-making bodies.