Health Services Union whistleblower Kathy Jackson was unable to explain how a string of large withdrawals totalling tens of thousands of dollars from a union slush fund were spent.
It comes as a close ally of Ms Jackson, Marco Bolano, has been subject to a police report after being accused of threatening, harassing and spitting at an opponent from the HSU outside the royal commission on union corruption.
Kimberley Kitching, an HSU employee in Victoria and former candidate for Labor preselection, reported Mr Bolano to NSW Police. Mr Bolano rejected the claim.
In a statement he issued to the media on Thursday, Mr Belano said the allegation that he or his wife spat on anybody wasfalse, "indeed, an outrageous fabrication".
"Allegations that I have intimidated or assaulted anyone are false and I reject them," he said.
"I am confident that there will be CCTV footage that will available to disprove any allegation that I, or my wife, spat at anyone."
In the inquiry, Ms Jackson was grilled about the slush fund. She said she had direct access to a Commonwealth Bank account opened in 2003 for a slush fund called the National Health Development Association.
She claimed the slush fund was established as an unincorporated association on the advice of Labor Party representatives and used to fund union elections and ALP electoral candidates.
Ms Jackson, who has admitted to being authorised to spend $4000 a year in unions funds for her personal benefit in lieu of overtime, said she was a signatory to the NHDA account. She had direct access to the slush fund and did not need to seek approval before making withdrawals.
Asked why large sums of money ranging from $3500 to $50,000 had been withdrawn from the NHDA account, Ms Jackson said she had no recollection of a number of withdrawals because her only records were kept in an exercise book which had gone missing.
Jeremy Stoljar, counsel assisting the royal commission, asked about a withdrawal of $6000 on March 6, 2008. ''Do you know what that was for?''
''No, not from memory,'' Ms Jackson responded.
She could not remember the purpose of several other withdrawals, for $8000, $5000 and $3500. And she could not explain why a $5000 payment was recorded as a donation to a charity called the Australians Bringing Hope when it was a political donation.
When Mr Stoljar put to her that smaller amounts that were coming out of the NHDA from time to time were generally used for personal purposes and the larger withdrawals may have been for some other purpose, she said ''Yes''.
When asked if there were any records identifying how the cash was spent, she said: ''Other than what existed in my exercise book, no, there isn't.''
''If I had my exercise book, every transaction would have been recorded faithfully. And my position is this is exactly why they have taken this exercise book, because I imagine it would embarrass a lot of people about what's in there and where the money went to,'' she said.
Ms Jackson admitted administration of the NHDA account fell short of proper practice and that it was not audited.
''I would say it falls short of proper practice in relation to what the public expect, but I don't say that it's an illegal account. I say that it's an account that was set up to meet the needs of the organisation at the time and that's how it was transacted,'' she said.
''Some people may find that unpalatable, but that's how business was conducted, not just in my union, I imagine, but in other unions as well. Unless we have a different regulation and procedures, then this is how people operated in this environment.''
Ms Jackson said other unions including the Australian Workers Union and the National Union of Workers had similar funds. ''They were offline sort of accounts,'' she said.
She said she had attended a lunch with representatives of Philip Morris in 2009 and was not certain how much money it had contributed to Mr Bolano's election campaign that year.
Philip Morris has strongly denied having donated money to Mr Bolano's campaign and said no one with the name mentioned by Ms Jackson had worked for the company.
Ms Jackson rose to national prominence as a whistleblower on widespread corruption at the HSU involving former senior officials Michael Williamson, now in jail, and Craig Thomson, a disgraced former head of the union and former ALP federal MP. Thomson is on bail pending an appeal against his conviction and sentence on multiple fraud charges.
The story Royal Commission: Kathy Jackson unable to explain how slush fund payments were spent first appeared on The Sydney Morning Herald.