What do you do when your star witness in a politically motivated inquiry turns out to be an alleged thief who may have stolen more than $1 million? Just ignore it.

The credibility of the Royal Commission into trade union governance and corruption should suffer a serious blow from its glaring omissions on the allegedly corrupt behaviour of Kathy Jackson and how it has treated her throughout these hearings.

The inquiry has always appeared politically motivated but the question was, despite this, was it a worthwhile process to root out corruption in the union movement and lead to a well-needed overhaul of questionable governance practices around slush funds and the like. The jury has been out on that.

Yet the 1817-page interim report by Commissioner Dyson Heydon dealt with a range of issues both serious and trivial but ignored Jackson. There was an oblique reference, without naming her, that other issues to do with the Health Services Union would be dealt with in a future report.

This inquiry, as the union movement has claimed, is a witchhunt and a waste of money if it is prepared to recommend charges against some other union officials for relatively minor transgressions but ignore the conduct of Jackson, a Coalition hero for exposing corruption in her union.

Dyson Heydon's interim report fails to deal with the documentary evidence against Jackson, her own admissions and the recommendation of his own counsel assisting Jeremy Stoljar, that charges be considered against her for submitting a "false claim" to the Peter MacCallum cancer hospital.

In any event, Stoljar arguably let Jackson off the hook – he did not deal with other serious issues, as he said they were being dealt with by a civil case brought against her by the HSU.

A short recap is worthwhile.

In 2003, Jackson's HSU branch received a $250,000 payment from the Peter MacCallum cancer hospital to settle a back-pay dispute where workers were owed $3.16 million.

The workers did not receive a cent of that and Jackson took the money and put it in a bank account controlled by her. She then spent it on herself – at JB Hi-Fi, David Jones, supermarkets, a paediatric dentist and $50,000 on her former husband.

Beyond that issue the ccommission barely dealt with many hundreds of thousands of dollars of apparent personal spending by Jackson on her union credit cards.

Nor did it make recommendations against her for questionable practices where she withdrew $8000 in cash for committee meetings, paid committee members a fraction of it and put the rest in what she called her "little steel box".

Jackson was always the commission's star witness and treated far too gently when she first appeared in June. That only started to change when the evidence mounted against her.

How seriously can the rest of the recommendations of this interim report be treated when this commission is prepared to ignore such serious allegations against a friendly witness?