Suspended NSW Labor boss Kaila Murnain has broken down in tears as she gave evidence to the Independent Commission Against Corruption on a day on which she was told her career with the party was over.
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Meanwhile, former senator Sam Dastyari has called for the state branch to seriously look at a "proper, full statewide ban on private donations" following his testimony before the anti-corruption inquiry.
"We've been through this rubbish enough and as someone who's seen the end of my own political career as a result of it, I think it's something that is well overdue," Mr Dastyari told reporters.
The ICAC inquiry is examining whether Chinese billionaire Huang Xiangmo, who is now banned from Australia, was the true source of $100,000 said to be donated by 12 people from a 2015 Chinese Friends of Labor dinner.
An emotional Ms Murnain, who took the top job in 2016, said she was scared for the ALP after hearing Mr Huang - a prohibited donor - had donated to the party during a conversation with upper house MP Ernest Wong in September 2016.
"We'd been through a lot that year, there were multiple court cases ongoing, there were by-elections current, I was scared for the office and the reputation of the party," she told the inquiry in Sydney.
She said she was doing her best to make sure she followed legal advice and "I obviously recognise now that's something I shouldn't have done and I should have made different decisions".
NSW Labor's general secretary was suspended from the top job after her first day of evidence on Wednesday and leader Jodi McKay on Thursday said she would never stand as a Labor candidate or return to her role.
Ms Murnain had previously told the inquiry Mr Wong was "distressed and agitated" when he told her in September 2016 that a person who said they had donated money to the ALP had not, and the money had come from Mr Huang.
She said she couldn't remember the donation amount but connected it to the money raised at the 2015 CFL dinner at the centre of the ICAC inquiry.
As a property developer, Mr Huang was prohibited by law from making donations to NSW political parties.
After getting advice from Mr Dastyari, then a Labor senator, Ms Murnain said she saw the party's lawyer Ian Robertson.
She told the inquiry she was advised to "forget the conversation happened" after she informed the lawyer that she believed Mr Wong.
When counsel assisting asked on Thursday why she only told ICAC about her conversation with Mr Wong during a compulsory examination, she replied "I wanted to do the right thing".
Ms Murnain said she had followed Mr Robertson's advice strictly until she'd had a bit of time off.
"For the first time probably in a decade I've had time off in the last few weeks and been forced to recall events that happened in 2016 and 2015," she said.
Mr Dastyari - whose 2016 discussion with Ms Murnain came soon after he stood down from the frontbench over Chinese donations - told the inquiry she was "quite distressed" when she got into his car in Sydney's CBD that evening.
He said she left him with the impression that the accounts for CFL weren't accurate, and she singled out Mr Huang as someone about whom she was concerned.
"I very strongly, forcefully gave the advice that you need to see the lawyers," he said.
Mr Dastyari previously told an ICAC examination his advice to Ms Murnain would have been "cover your arse, like protect your arse and make sure you tell everything to Ian Robertson and make sure you get the lawyers in".
He said he didn't remember speaking with Ms Murnain about the matter again.
The inquiry continues.
Australian Associated Press
