Liberal MP Craig Baumann has admitted to the Independent Commission Against Corruption (ICAC) that he did not declare electoral donations during his first tilt at state politics in 2007.
The Member for Port Stephens is giving evidence at the inquiry, into allegations of business donations and political favours, following claims he facilitated a payment from development firm Buildev to a campaign staffer.
Counsel assisting the inquiry Geoffrey Watson SC asked Mr Baumann about whether he received donations from developers Hilton Grugeon and Jeff McCloy, who was also the former Lord Mayor of Newcastle.
Today's evidence focused on the subdivision and rezoning of the Wallarong Urban Release Area.
Mr Watson put to Mr Baumann that both developers stood to make a lot of money from the rezoning of this land.
"Yes," Mr Baumann responded.
The Port Stephens MP was also repeatedly asked who paid for his 2007 and 2011 election campaigns.
Mr Baumann told ICAC that Hunter Ready Mix Concrete, which was owned by Hilton Grugeon, made the largest donation to his 2007 election campaign.
When asked if he declared that money, Mr Baumann replied, "I inadvertently made a dishonest declaration and I apologise".
Mr Baumann has also denied he created a sham invoice to disguise money being donated to his 2007 election campaign by Jeff McCloy.
Secret donations? 'It does look like that,' says McCloy
Mr McCloy then briefly returned to the witness box to explain whether he paid funds into Mr Baumann's 2007 election campaign and if he can remember why it was done.
"No I can't remember," he told the inquiry.
Mr McCloy said Mr Baumann wanted funds for his election campaign.
He told the hearing the reason none of his companies declared the payment was because he did not like putting his name against any political donations and that it was a way of getting around that.
When asked whether it looked like he was making secret donations to a powerful politician in the Port Stephens area, Mr McCloy said, "It does look like that."
Meanwhile, influential Liberal Party Senator Arthur Sinodinos is due to front ICAC again today as part of an ongoing investigation into allegations of business donations and political favours.
Senator Sinodinos stood aside from his role as the assistant treasurer in March, saying he did not want the ICAC probe to be a "distraction" for the Federal Government.
ICAC Commissioner Megan Latham said this morning that the watchdog was now looking at whether Mr Baumann and his accountant made false declarations to conceal benefits exchanged with developers Hilton Grugeon and Jeff McCloy.
Mr McCloy is also the former mayor of Newcastle.
Mr Baumann, Mr Grugeon and Mr McCloy were due to give evidence at the commission today.
ICAC was told last week that Senator Sinodinos was present during a Liberal Party meeting that discussed how to deal with a New South Wales ban on political donations from property developers.
The party's finance committee considered the idea of funnelling donations through the Canberra-based Free Enterprise Foundation as a way around the ban.
Liberal Party fundraiser Paul Nicolaou told the ICAC hearing he put forward the idea but then left it with the committee members.
"I advised the [finance] committee of the Free Enterprise Foundation and what it does," he said.
"I assumed that the finance committee would have then taken legal advice to ensure that what we would do with the Free Enterprise Foundation was above board."
Mr Nicolaou said Senator Sinodinos was at that meeting as well as the then-Liberal Party state director in New South Wales, Mark Neeham.
Mr Neeham resigned from the role last year and said he was seeking "new challenges and a new role" after 10 years with the Liberal Party.
Senator Sinodinos appeared before ICAC in April to discuss his involvement in a company called Australian Water Holdings (AWH).
He was a director of AWH from October 2008 until November 2011, which included a 12-month stint as the company's chairman.
ICAC is looking into allegations that between 2004 and 2012, AWH falsely billed Sydney Water for expenses on an infrastructure project and used the money for executive salaries and political donations.
The company had links to disgraced former NSW Labor MP Eddie Obeid.
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