LABOR MP Craig Thomson received a secret payout of almost $160,000 from the Health Services Union three years after he left the union and had been elected to Federal Parliament.

The confidential settlement, obtained by Fairfax Media, shows that in September 2010 the union agreed to pay $129,555 in entitlements plus $30,000 to settle a defamation claim Mr Thomson had brought against the union and its national secretary, Kathy Jackson.

The suit against the union was over allegations that he had used his union credit card for a session at a brothel, the use of escort services and for $100,000 in cash advances over five years when he was the national secretary.

Confidential settlement ... Labor MP Craig Thomson claimed he was owed several years of annual leave by the Health Services Union.

Confidential settlement … Labor MP Craig Thomson claimed he was owed several years of annual leave by the Health Services Union. Photo: Alex Ellinghausen

Mr Thomson claimed he was owed several years of annual leave and other entitlements but the union had withheld payment while it investigated claims he had misused union funds.

At the time he received the payout, Mr Thomson was suing Fairfax Media over the allegations of misuse of his credit card which had been uncovered during an internal audit conducted for the union after his departure.

Mr Thomson said someone else had used his credit card. But records obtained under subpoena by Fairfax revealed the credit card vouchers for the brothel and escort agency transactions were not only issued in Mr Thomson’s name and signed by him, but the driver’s licence details on the back of the vouchers belonged to a Craig Robert Thomson of Bateau Bay.

The NSW Supreme Court heard that Mr Thomson’s mobile was used to call ”Sydney Escorts – Room Service” twice and to phone union and Labor officials before and after the calls to the escorts. He later dropped the case.

It has since been reported that the ALP’s NSW head office paid $150,000 of Mr Thomson’s legal bills to stop him being bankrupted, which would have automatically excluded him from political office, leading to the likely collapse of the government. The former senator Mark Arbib was questioned about his alleged involvement in organising the payments of Mr Thomson’s legal bills. Mr Arbib told the Senate the matter was unrelated to his portfolio and should be addressed to Mr Thomson and the Labor Party.

Until Mr Thomson dropped his case against Fairfax, last June, he was telling people that not only was he innocent but he had won the case against Fairfax.

”He looked me in the eye and told me he won,” a minister has previously told Fairfax.

The one-time Labor powerbroker Graham Richardson has also been reported telling people that very early on, after making his own inquiries, he had advised Mr Thomson to drop the suit against Fairfax.

It appears no one gave the union the same advice. In July 2010, Mr Thomson’s lawyer sent it a demand for $200,000. ”Our client maintains that he has high prospects of success in his proceedings against the Fairfax companies and … in obtaining a favourable verdict and damages in his proceedings against the union or Ms Jackson.”

Mr Thomson did not get the $200,000 but while the union’s whistleblower Ms Jackson was overseas the union secretly paid him $160,000.

Opposition workplace relations spokesman Eric Abetz hit the airwaves this morning to criticise the actions of the embattled MP, saying Mr Thomson should have immediately declared the payment to parliament.

”It does seem that once again Mr Thomson has not been telling the Australian people what they are entitled to know,” Senator Abetz said.

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