Brothel owner gives evidence as Craig Thomson faces 145 charges of obtaining financial advantage by deception Craig Thomson arrives at the Melbourne Magistrates' Court. PROSECUTORS have started to call brothel owners to give evidence in their case against former MP Craig Thomson, who is defending allegations he used union funds to pay for porn and prostitutes. The former federal MP, who lost his NSW seat of Dobell at last year's election, is back in the Melbourne Magistrates' Court today, fighting claims he misused union funds while national secretary of the Health Services Union. He has pleaded not guilty to 145 charges of obtaining financial advantage by deception. Prosecutors allege Mr Thomson used union credit cards to hire escorts, pay for X-rated movies, withdraw cash, buy cigarettes and pay for interstate flights for himself and his wife. Brothel owner Peter Lazarus, who owns A Touch of Class in Sydney's Surry Hills, told the court services cost $300 an hour plus a 10 per cent fee for credit card payments. The court heard a $660 transaction was listed on a credit card used by Mr Thomson while he was HSU secretary. The amount was recorded as being paid to "Staff Call," the merchant name of A Touch Of Class, the court heard. Mr Lazarus said clients had to provide identification before hiring a worker. He said all records and CCTV footage of men entering and leaving the premises were destroyed after six years. Earlier, the court heard Mr Thomson has access to several credit cards and was the only union official who could withdraw cash from at least one of the cards. HSU honorary national president Lloyd Williams told the court union cards didn't have the facility to allow users to withdraw cash. He said he learnt Mr Thomson could withdraw cash from his card following an exit audit conducted after Mr Thomson left the union. I was flabbergasted. It was unheard of," he said. I didn't understand why a union official would need to withdraw cash. Mr Williams said there were no written policies about union expenditure during Mr Thomson's reign as secretary, but it was widely accepted how union cards could be used. He agreed with Greg James, QC, for Mr Thomson, that his client would have been well within his rights to hire The Sound of Music on DVD while on an extended interstate trip. Mr James said if that were so, it wouldn't matter if Mr Thomson hired The Sound of Music or Every Which Way But Loose. HSU national executive member Rosemary Kelly told the court auditors discovered the existence of a Commonwealth Bank MasterCard that had allegedly been used to make cash withdrawals. She said that despite sitting on the union's finance committee, she knew nothing about the card. Dr Kelly said there was no role for cash in the business dealings of the union and said it was understood union money was not to be used for paying prostitutes or renting pornographic films. "Union funds shall be expended to the benefit of members of the union," she said. That's the ruler that should be ruled against everything. Dr Kelly said a committee set up to monitor the finances of the union met only on an ad-hoc basis and never more than twice a year. She said that as national secretary Mr Thomson had the capacity to sign off on expenditure of up to $50,000. Under cross-examination, Dr Kelly said she became aware of the necessity of keeping close track of funds after learning of allegations that fellow union official Jeff Jackson had misused union funds. She said that after Mr Thomson left the union in 2007, "minutes of the union (meetings) went missing and could not be found." She said all the records of the national executive between 2000 and 2007 were also missing. The hearing continues.