Former billionaire Nathan Tinkler offered to support the 2011 reelection campaign of then Newcastle Labor MP Jodi McKay, telling her he could get around laws banning developers from making political donations by using his employees as fronts, the Independent Commission Against Corruption has heard.
The offer was put to Ms McKay amid discussions about Mr Tinkler's interest in the Newcastle Knights and as Mr Tinkler was pressing Ms McKay to support his proposed $2.3 billion coal loader at Mayfield, the ICAC's new inquiry into allegations of payments for political favours was told this morning.
But Ms McKay refused to discuss the proposal because Buildev, a company Mr Tinkler controlled, had previously donated $50,000 via Labor's head office to her 2007 election campaign, before election funding laws were tightened in 2009.
Counsel assisting the ICAC Geoffrey Watson SC told the inquiry that Ms McKay informed Mr Tinkler during their meeting that he was banned from making political donations because of his involvement with Buildev.
"His response was quite startling," Mr Watson said.
Mr Tinkler told Ms McKay "well that's OK".
"He had hundreds of employees and he can get around the rules by making those employees front as the donors," Mr Watson said.
But Ms McKay "could not be bought" and reported the offer to the ICAC.
Mr Watson then referred to "ongoing investigations" into donations Mr Tinkler was also making at the time to Ms McKay's "opponent's campaign".
It is not clear to which other candidate Mr Watson was referring, with him telling the ICAC he was not prepared to say anything more at this time.
The inquiry, called Operation Spicer, also heard extraordinary allegations this morning in relation to a slush fund operated by an ex staff member of former Liberal resources minister Chris Hartcher.
Tim Koelma is alleged to have run his company Eightbyfive as a "sham business" to solicit payments from prohibited political donors in return for favours from Mr Hartcher.
It garnered more than $400,000 in total, including $66,000 from the Buildev Group, which paid for "fake services", although Mr Tinkler's Patinack Farm was technically Mr Koelma's client.
Mr Watson said Patinack's involvement was "designed to sever any connection" between Buildev and Eightbyfive.
The money funnelled through Eightbyfive was used in part to support Liberals Chris Spence and Darren Webber during their ultimately successful campaigns for Central Coast seats in the 2011 election.
In April 2013, ICAC contacted Patinack Farm about the dealings, causing a flurry of text messages between Mr Tinkler's business associates.
"Have u got Eightbyfive under control. We can't have patinack involved in an ICAC hearing," Tinkler Group chief executive Troy Palmer texted to Buildev's Darren Williams, according to records shown at the inquiry.
Mr Tinkler was told via email that ICAC was investigating and replied "Who is ICAC?".
Told by Mr Williams it was the "NSW Gov" Mr Tinkler responded "Oh mate u r f---ing kidding me...what have I ever had to do with this business, can't trust anyone.
"...Another one of sharpey's lobbyist mates I am no doubt going to have to wear the headlines before and I don't even no [sic] their names nor have ever met..."
Mr Tinkler, Ms McKay, Mr Palmer, and Buildev founders Darren Williams and David Sharpe are due to give evidence later this week.
The inquiry is continuing this afternoon.