Health Services Union employees who threatened to challenge or blow the whistle on former official Michael Williamson's corrupt conduct have told the royal commission into trade union corruption how they were intimidated, isolated and eventually silenced by threats of legal action.
The intimidation ranged from serious threats of legal action to "petty" behaviour.
The commission also heard allegations that Opposition Leader Bill Shorten donated $5000 to the election campaign of an HSU candidate when he was a member of the Rudd government in 2009. Mr Shorten has denied the allegation, the second raised against him at the royal commission.
Mark Hardacre, a former official of the NSW branch of the Health Services Union, known at the time as the Health and Research Employees Association, alleged Williamson had isolated him and had "targeted and harassed a number of female staff".
Williamson, who ran the HSU as his personal fiefdom from 1995 to 2011, has been jailed for a minimum of five years for defrauding the union of close to $1 million and enlisting family and friends to cover up his crimes.
Mr Hardacre, who ran against Williamson in the 1995 union elections, said Williamson's campaign materials included a quote from Machiavelli's The Prince, which said: "It has to be noted that men must either be pampered or crushed, because they can get revenge for small injuries but not for grievous ones".
Mr Hardacre said he and his former union colleague Katrina Vernon were eventually forced to resign. He said Ms Vernon accepted a generous redundancy settlement including a confidentiality agreement.
Mr Hardacre was forced to withdraw from a costly legal battle with Williamson and "reluctantly" signed a confidentiality agreement to avoid losing his house.
"I wanted to fight on with this and the reality was we couldn't," he said.
During his time with the union, Mr Hardacre said he was denied entitlements of his office including a mobile phone, car and office. He said his position was demeaned and he was forced to take a desk facing the wall of Williamson's office.
Mr Hardacre alleged Williamson's wife, Julianne, was secretly included on the union payroll in the 1990s despite not being an employee. He said Williamson explained away the $500 weekly payment, saying it was not for his wife but a tax avoidance measure on his part.
Another former official from the HSU's Victorian branch, Marco Bolano, said Williamson had "fabricated financial irregularities to get rid of an official or employee who did not submit to this will".
Mr Bolano said Williamson received a standing ovation at an HSU annual convention in November 2011 while the theme from the film Rocky played.
Mr Bolano said he was surprised to learn he had received a $5000 donation from Mr Shorten for his HSU election campaign in 2009.
Mr Bolano's campaign manager, Stephen Donnelly, then a staffer to Victorian senator David Feeney, had speculated that Mr Shorten, said to be supporting another candidate, wanted to have a "bet both ways".
A spokesman for Mr Shorten said the "claim is completely untrue".
Mr Bolano claimed that Mr Donnelly said tobacco company Philip Morris had also made a donation.
The royal commission's counsel assisting, Jeremy Stoljar, said Katrina Hart, another HSU official, said she was immediately threatened with a defamation action after raising concerns about Williamson's conduct.
He said the tactics of senior HSU officials to intimidate, isolate and harass whistleblowers or perceived rivals succeeded "because, in addition to the ringleader's own conduct, he or she also enlisted the support of many other officials and members".
Later this week, Kathy Jackson, who blew the whistle on Williamson, will respond to allegations that she used $1 million in HSU members' funds to pay off two personal credit cards and that she withdrew about $220,000 in cash using HSU bank cheques.
Her involvement with a slush fund operating through a company called Neranto at No 10 will also be explored.
The story Royal commission hears Health Service Union's Michael Williamson bullied whistleblowers first appeared on The Sydney Morning Herald.