Police probe Australian political sex scandal (AP)

CANBERRA, Australia – Australian police were investigating allegations Tuesday that a lawmaker misused a credit card to pay prostitutes, a political scandal that could bring down the country's fragile government.

New South Wales state police said they are looking into new evidence that government lawmaker Craig Thomson misused a trade union credit card when he was a senior union official in 2005 and 2007.

A conviction for theft or fraud would force Thomson to quit Parliament and cost Prime Minister Julia Gillard's year-old government its single-seat majority.

With opinion polls showing the government has become deeply unpopular, observers agree that the ruling Labor Party would have little hope of retaining Thomson's seat in an ensuing by-election.

Thomson has denied any wrongdoing and Gillard has publicly supported the lawmaker, who was first elected when Labor swept to power in 2007.

The allegation, first raised by a Sydney newspaper in 2009, dates back to when Thomson was national secretary of the Health Services Union. He allegedly used his union credit card to pay a Sydney brothel thousands of dollars of union money in two transactions.

Thomson has denied the allegation and claimed that an unnamed man had taken his credit card and forged his signature. Thomson also said that that man had repaid the money.

Thomson sued the newspaper's owner, Fairfax Media Publications, but dropped that court action in May.

Police have never investigated the allegations because the Health Services Union, which is aligned with Labor, has never made a complaint.

But an opposition senator, George Brandis, wrote to Police Commissioner Andrew Scipione on Monday with new evidence he said showed Thomson had committed a range of crimes, including fraud, which is punishable by 10 years in prison.

The new evidence included a statement from a forensic handwriting expert who said Thomson had probably signed one of the brothel credit card dockets in question. It also included a bundle of recently released court documents that Fairfax would have used in the defamation trial as proof of many more instances in which Thomson allegedly paid prostitutes with the same credit card.

Gillard told Parliament on Tuesday "it would be inappropriate for me to comment further" on the scandal because of the police investigation.

She denied any involvement in a decision by a Labor state branch to pay more than 90,000 Australian dollars ($94,000) toward Thomson's legal bills for settling his defamation case.

"Decisions about finances related to the New South Wales Labor Party are for the New South Wales Labor Party to make," she told Parliament.

The party won't explain the generous gift, but the opposition is convinced it was to prevent Thomson being bankrupted by his legal bills.

Under Australia's Constitution, a lawmaker must quit Parliament if he or she is bankrupt or convicted of a crime that carries a potential prison sentence of at least 12 months.

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