Thomson scandal a growing threat to Gillard

Craig Thomson. Photo / Supplied

Wellington-born federal MP Craig Thomson is under renewed pressure for allegedly using a trade union credit card to hire prostitutes in a scandal that could bring down Prime Minister Julia Gillard's fragile minority Government.

Thomson has previously admitted his union card had been used by another man, has narrowly escaped bankruptcy that would have expelled him from Parliament, and is reportedly the subject of an investigation that could lead to criminal charges.

Yesterday Fairfax newspapers reported further allegations of Thomson's card being used to call prostitutes in Melbourne, renewing pressure on Gillard. Thomson has denied the allegations and no charges have been laid.

But if he was to fall, Gillard would face the likelihood of losing power. Thomson holds the marginal seat of Dobell which he won with a primary majority of less than 4000 votes. If he was forced from Parliament Labor would stand little chance of retaining the seat in the subsequent byelection. Labor holds power only with the support of three independents and a Green MP.

The latest allegations follow earlier reports that Thomson's union credit card had been used to pay for escort services in Sydney when he was national secretary of the Health Services Union. Thomson said the card had been used by another person, who had since paid back A$15,000 ($17,000) to the union. It was also alleged that the card had been used to withdraw more than A$100,000, to help fund his campaign in the 2007 election.

Further reports have alleged that the Labor Party, fearful of the loss of Dobell in a byelection, had paid up to A$150,000 to cover legal bills incurred in a defamation action Thomson brought, and later dropped, against Fairfax. The reports claim Thomson would have otherwise been bankrupted, forcing him from Parliament.

Reports yesterday said the national workplace relations tribunal Fair Work Australia was investigating whether Thomson had misled its initial inquiry into the use of the card. Any finding of misuse could incur either a civil penalty or reference to the Director of Public Prosecutions.

Yesterday Fairfax said Thomson's card had also been used in Melbourne to pay for calls to the Young Blondes, Confidential Models and Bad Girls escort agencies. The reports also claimed that Thomson had paid A$102 for food at Melbourne's upmarket Langton's restaurant - and A$540 on wine, beer and coffee.

Thomson yesterday said the allegations were "completely untrue".

"I've denied these allegations before," he said. "There was nothing there that was new at all."

Gillard said she had complete confidence in Thomson, who was doing a "fine job" of representing his constituents.

"I look forward to him continuing to do that job for a very long, long, long time to come."

But Opposition Leader Tony Abbott said Gillard needed to take action.

"Craig Thomson is obviously a protected species as far as this Prime Minister is concerned."