Janice Hardacre has never forgotten the odd conversation she had with her then colleague, Michael Williamson, 20 years ago.
Janice McNamee, as she was then known, was a young industrial officer with the Health Services Union, while Williamson, who'd joined the union from the NSW Health Department, was assistant state secretary, itching to nab the all-powerful secretary's position. "I could not think of anything worse in this world than being incarcerated," the then 40-year-old Williamson told her.
"This was way before I knew [what] he was up to ... but I just remember thinking at the time that was the most unusual sentence I had ever heard," Hardacre said this week.
Now Williamson's worst nightmare is rapidly bearing down on him. On Tuesday, the 60-year-old, who ran the HSU as his personal fiefdom from 1995 till 2011, pleaded guilty to several counts of defrauding his old union of close to a million dollars and enlisting family and friends to cover up his crimes. Five of the charges each carry a seven-year jail term, while the two counts of defrauding the union each attract a maximum 10 years' jail.
Police admit that's only the tip of the iceberg of Williamson's transgressions. "We could have spent years investigating all the other matters, but you have to draw a line in the sand," said one detective.
Fairfax Media can now reveal that Williamson has been defrauding the union for 20 years. The police were given information that ranged from the alleged theft of thousands of dollars in cash from the union's safe, to ordering the most expensive champagne and wine supposedly for union functions, but which found their way into Williamson's purpose-built wine cellar in his home in the Sydney beachside suburb of Maroubra.
There were also three separate occasions on which he was reimbursed by the union after claiming he had been mugged at an ATM machine just after withdrawing large amounts of cash.
Williamson has signed an undertaking with his former union to repay the $5 million from which he and his family corruptly benefited. And his wife Julieanne has agreed to forgo over $1 million in superannuation her husband claimed from the union. But the same day he pleaded guilty, Williamson declared himself bankrupt.
The money, it seems, has long gone on maintaining the Williamsons' opulent lifestyle - the fancy cars, private school fees and luxury travel when the Williamsons and their five children jetted off on holidays.
This week, heavy-hitters in the tightly interlocking worlds of the NSW union movement, the state Labor Party and the federal caucus - who thought nothing could shock them after the ICAC corruption revelations about former Labor ministers Eddie Obeid and Ian Macdonald - were reeling at the sheer scale of Williamson's plundering.
Almost none would go on the record. But in private conversation, the same themes came up over and over. Yes, they said, the HSU had always been seen as somewhat "extravagant", but most say they put this down to Williamson's success in building up the prosperity of the HSU through expanding membership, a relatively easy feat when health budgets were growing under state Labor governments.
What they didn't know, they claim, was the extent of Williamson's personal venality. "How would we know which schools his children went to or the holidays they went on," one senior party player said plaintively this week.
The protestations of ignorance infuriate those who, for years, did their best to raise the alarm. For four years from 1995 Janice Hardacre's husband Mark, who was Williamson's deputy, complained frequently and loudly to politicians and to the union's council about Williamson. "For anyone to say, 'We didn't know about this' ... they are lying," said Janice. "They all knew." Another assistant state secretary who rang alarm bells was offered a payout of almost $100,000 by Williamson to leave.
In the late '90s, two other union officials, Alan Ivers and Bill O'Connor, grew so concerned about Williamson's handling of members' funds that they demanded to see the union books. What they found (after having to go to the Industrial Relations Commission to get access) astonished them. On Michael Williamson's credit card were purchases for Chanel perfume, Clinique make-up, children's pushbikes, shoes, designer handbags, mattresses and more. Just as surprising was that Williamson's mistress, Cheryl McMillan, also had a credit card on which she had racked up a raft of personal expenses. "It vindicated everything that we had been saying," Janice Hardacre said.
In 1999, armed with this evidence of flagrant rorting, the Hardacres joined with Ivers, O'Connor and union activist Paul Ford to run a ticket challenging Williamson for control of the union. When they revealed the credit card rorts, Williamson hit them with a $750,000 lawsuit for suggesting he was corrupt.
Paul Ford, now teaching maths, remains enraged about the case. "He was ruthless. He used his power and influence to wipe out anyone who opposed him," he says. While Williamson was able to use union funds to sue his critics, team Hardacre had to use their own money to fight the defamation action. After four years of "hell", and faced with losing their houses, they settled, each paying up to $50,000 in costs.
Under the terms of settlement they were never to say anything about Williamson and his credit-card rorts. But it appears their challenge may have led Williamson to become more creative. Around the same time, he asked the union's printers, John and Carron Gilleland, to supply him, his mistress McMillan and later protege Craig Thomson with American Express cards, mentioning that it would help avoid scrutiny of union election expenses.
Williamson and McMillan also later hatched a plan where another supplier to the union, Alf Downing, would inflate his prices by about 25 per cent. Downing would then meet McMillan for coffee, where he'd give her large wads of cash in an envelope. She would keep some and pass the rest to Williamson. Police said this occurred on at least 300 separate occasions, netting Williamson about $600,000 in cash.
Williamson's former campaign manger Peter O'Toole was another one of those close to Williamson who became horrified by what he saw. In 1999 he too decided to run against his former boss in HSU elections. Within a week of nominating against Williamson, he alleges, John Robertson, now the NSW Labor leader but then in the Labor Council, asked to meet for coffee.
According to O'Toole, Robertson said he had come at the request of then head of the Labor Council, Michael Costa, to ask O'Toole to withdraw and leave the field to Williamson. In a brief response, Robertson told Fairfax Media that: "I recall having a coffee with Mr O'Toole some 14 years ago ... I encouraged [him] to report his allegations." O'Toole maintains that Robertson "didn't do that at all". In 2009, O'Toole wrote to Robertson again, warning him against Williamson who was then on the brink of becoming national president of the Labor Party. Robertson told O'Toole to "take the matter up with the party's national office".
O'Toole said Williamson kept "his" team at the union compliant by treating them to long lunches, booze, hotels and travel while issuing threats against the dissidents.
"Michael always thought that he was running a big company like BHP or something, and he always saw that he had certain entitlements as being a CEO of a large organisation ... in some sort of strange recesses of his mind, he could justify [the rorts]."
Williamson, meanwhile, was careful to present a different face to party apparatchiks. As he grew the HSU, it became one of the biggest unions in the state, an important source of numbers for the party's ruling right-wing bloc and a big contributor to party coffers.
"Labor head office loved him," says one prominent union colleague. "He would always do what the party wanted; he would cut deals with the state Labor government on pay outcomes for his members, he was affable and didn't throw his weight around."
Generally he didn't hang out much with other union secretaries, but he did have a close working relationship with Transport Workers Union boss Tony Sheldon. Sheldon says this cooled several years ago, not least when Williamson double-crossed him over the party presidency. Sheldon had lined up union support to take the role himself in 2009, but in a deal brokered largely by then senator Mark Arbib, Williamson was put up as the right's candidate instead. The Rudd government saw the HSU boss as more pliable than Sheldon.
Certainly Williamson tended his party connections carefully. It probably didn't hurt that his oldest daughter Alex, who for a time shared a flat in Canberra with Arbib, worked in Julia Gillard's office. And when the federal ALP came looking for campaign headquarters in Sydney for the 2010 election, it was Williamson who obliged, letting the party rent vacant office space that the HSU had in Pitt Street.
Little wonder that when Fairfax Media first aired allegations about Williamson's flagrant pilfering in 2011, party stalwarts at first rallied round to defend him. The legacy is likely to continue to dog the early months of Bill Shorten's ALP leadership. Shorten has been a long-time factional player in union politics.
Another HSU official, Kathy Jackson, is claiming that after she reported Williamson and the widespread corruption within the union to police, both Shorten and fellow Victorian frontbencher Stephen Conroy moved to discredit her.
Shorten's office has rejected the allegation and says he has "no tolerance of corruption". Conroy says Jackson "promotes conspiracy theories which have no substance".
The Abbott government is preparing to make union governance a major weapon with which to attack Labor, and it is only a matter of time before its attention turns to the widespread practice of union officials bankrolling each other's election campaigns.
Williamson was an arch-practitioner of the art. According to O'Toole, Williamson would ensure that the HSU contributed generously to the campaign funds of friendly officials in other unions, either through fundraisers or other means.
O'Toole says if Labor movers and shakers were really blind to Williamson's pillaging of union coffers, it was because they didn't want to know.
"As long as the rivers of gold kept on flowing, they really didn't give a shit," he says.