Former federal MP Craig Thomson had complete control of the Health Services Union's finances when he allegedly used its credit cards to pay for escorts, movies and personal travel, a court has heard.
Thomson, 49, is facing 145 dishonesty charges over the alleged misuse of $28,449 on HSU credit cards while he was the union's national secretary and a Labor MP.
HSU acting national secretary Chris Brown said Thomson had drafted guidelines in 2003 for a finance committee to curb the "unfettered spending without any oversight" of the union's national secretary.
The rules were adopted, but Mr Brown told the Melbourne Magistrates Court that the finance committee was ineffective.
Thomson rarely provided any information about the union's finances to the HSU national executive, Mr Brown said.
However, Mr Brown said the use of union-issued cards to pay for escorts, personal travel and in-room movies would be against the organisation's rules.
Mr Brown said it was only after Thomson left the union to become an MP that the national executive obtained copies of his credit card statements.
"There were regular cash withdrawals from Mr Thomson's Mastercard," Mr Brown said.
"There were a number of items which at least on face value had nothing to do with the business of the union."
Mr Brown said in early 2008, HSU president Michael Williamson told the national executive that the organisation had debts of about half a million dollars, and that most of the union's financial records were missing.
The hearing was adjourned until January 20, when it is expected to run for another two weeks.
Mr Williamson has pleaded guilty in NSW to defrauding the HSU of almost $1 million and will be sentenced in March.
