Defiant Australian legislator rejects brothel claims

CANBERRA (Reuters) - An Australian member of parliament accused of spending union money on prostitutes said on Monday he had been framed by union rivals and he made no mention of resigning, which would threaten the government's thin majority.

The legislator, Craig Thomson, has been suspended from the ruling Labor Party over the scandal, but he continues to support Prime Minister Julia Gillard's minority government, which clings to a knife-edge one-seat majority.

The scandal has dominated Australian media for the past three years and damaged public support for Gillard's government and the wider trade union movement, which have both distanced themselves from Thomson and his alleged spending.

In his first detailed response to the accusations, Thomson on Monday gave an hour-long speech to a hushed parliament, denying doing anything wrong and saying he had been set up by rivals who wanted to destroy his political career.

"I have consistently and on many occasions made it clear I have done nothing wrong," Thomson told parliament, adding he and his family had been subjected to abuse and death threats over the issue.

Some commentators had believed Thomson might announce his resignation from parliament, forcing a by-election which could then lead to the collapse of Gillard's deeply unpopular government. But Thomson gave no such indication.

Thomson is under police investigation over more than A$400,000 ($400,000) in expenses, including about A$6,000 on prostitutes, allegedly run up while he was a Health Services Union official and before he entered parliament in 2007.

A 1,100-page report by Australia's workplace regulator, tabled in parliament, found Thomson stayed at top hotels, withdrew more than A$100,000 in cash from his union credit cards over five years, and spent up to A$1,500 a night at top restaurants.

His credit card tabs also show almost A$6,000 spent at escort agencies A Touch of Class, Miss Behaving and Young Blondes, while his hotel bills show phone calls to escort services.

"ANGRY RIVALS"

Thomson has not been charged with any offence or faced any civil action.

But the conservative opposition has vigorously pursued details of his spending and has demanded the government no longer accept his vote. It has also suggested Thomson should be suspended from parliament because of the investigations.

Such a move would leave the government relying on the casting vote of the acting speaker to ensure its majority and to pass legislation during debate on its 2012-13 budget.

Opinion polls show Gillard's government support at near record lows and that her government would be defeated if elections were held. The next elections are due in late 2013.

Despite the pressure on him and his family, Thomson remained defiant.

"I have not been the subject of any conviction, nor the subject of any legal proceedings," he said, adding that many members of the pubic already consider him guilty.

He said the allegations of spending union funds on prostitutes stemmed from rival union officials who were angry about his moves to clean up the union's finances.

Thomson said rivals could have used his credit card and driver's license details, which were on the record at the union's headquarters, and hacked his phone to frame him for using prostitutes.

Thomson called on police to obtain brothel surveillance videos to prove he did not visit the establishments named on his credit card bills.

Thomson's union rivals have denied they conspired to frame Thomson over his spending.

Opposition manager of business Christopher Pyne said parliament should suspend Thomson to protect its reputation.

($1 = 1.0138 Australian dollars)

(Editing by Robert Birsel)

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