Former minister Chris Hartcher is under renewed scrutiny after his alleged bagman confessed to using slush funds to funnel banned political donations to NSW Liberals.


The Independent Commission Against Corruption (ICAC) has been probing EightByFive, a “sham” company allegedly set up by Hartcher staffer Tim Koelma to collect more than $400,000 for the benefit of several Liberal MPs.

Also in the corruption watchdog’s sights is the Canberra-based Free Enterprise Foundation (FEF), which was allegedly used to “wash” funds from prohibited donors that were then re-channelled to the NSW Liberal Party.

During a sensational afternoon of evidence on Monday, veteran electoral officer Ray Carter said he warned top Liberal fundraiser Paul Nicolaou that contributions from prohibited donors were being funnelled through the FEF.

“I asked Paul the legality of it and he said more or less, that’s what the Free Enterprise was for,” Mr Carter said.

He agreed he personally sent off $165,000 to the FEF, and said “everyone” – including Mr Hartcher – knew about the foundation’s existence.

“It was no secret,” Mr Carter said.

He also channelled funds via EightByFive, he said.

“Some of this money that you were raising, was it coming from prohibited donors?” counsel assisting Geoffrey Watson SC asked.

“Yes,” the witness replied.

Mr Carter said it was his idea to have EightByFive issue fake invoices to donors, though he knew nothing about alleged donations from Australian Water Holdings (AWH), Gazcorp or Nathan Tinkler’s development firm Buildev.

Property developers have been barred from making political donations in NSW since 2009.

Mr Carter left open the possibility that his boss did not know about the banned donations flowing through EightByFive, telling the inquiry Mr Hartcher had him on a long leash.

“I had my own free run,” he said.

“I did not necessarily go into a lot of detail with him … People were virtually throwing money at me.”

Despite Mr Carter’s apparent frankness, there were suggestions that he may not have told all he knew.

“You’ve worked for Mr Hartcher for many years, and you’re close to him – and you know Tim Koelma well, too,” Mr Watson said.

“Mr Carter, has anybody placed you under personal pressure about the evidence that you were going to give here today?”

“No, but I have been under a lot of pressure by myself,” Mr Carter replied.

Earlier, former AWH boss Nick Di Girolamo told the inquiry that his company paid EightByFive $183,000 in return for services including media relations and advice.

But junior counsel assisting Greg O’Mahoney said the firm was really buying access and support from Mr Hartcher.

“AWH was getting incredible bang for its corrupt buck,” Mr O’Mahoney said.

Mr Di Girolamo replied: “I find that comment to be completely outrageous, offensive and insulting.”

Twin ICAC probes have now claimed seven NSW Liberal MPs, with Newcastle member Tim Owen announcing that he wouldn’t contest the next election following damning evidence suggesting prohibited donors contributed to his 2011 campaign.

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