Liberal Senator Arthur Sinodinos has come under fire at a corruption inquiry after he admitted he did nothing to investigate why a company he chaired, the Obeid-linked Australian Water Holdings, was charging exorbitant expenses to the state utility Sydney Water.
In a torrid day at the Independent Commission Against Corruption, Senator Sinodinos agreed his $200,000 salary at Australian Water required him to have a "close knowledge of the financial condition" of the company.
But he claimed he was unaware the company donated $72,000 to the NSW Liberal Party, of which he was honorary treasurer.
"You deny knowing the company of which you were [then] deputy chairman was donating to the party of which you were treasurer?" counsel assisting the commission, Geoffrey Watson, SC, said.
"Yes," Senator Sinodinos replied.
The inquiry has heard Senator Sinodinos, who did about 50 hours' work a year as a director of AWH, stood to make up to $20 million if the state Liberal government entered into a public-private partnership with the company.
The commission is investigating allegations the Obeid family were "secret stakeholders" in the company and stood to make up to $60 million.
Asked why he didn't reveal he had "skin in the game" when he was lobbying Premier Barry O'Farrell and then finance minister Greg Pearce over the partnership, Senator Sinodinos said: "I think they would have understood officers of the company would have benefited."
In testimony frequently punctuated by “I don't recall”, Senator Sinodinos also claimed to have no knowledge that for three years his friend and Liberal fundraiser Paul Nicolaou was on a monthly retainer of $5000 to lobby on behalf of AWH.
The former Liberal Party president agreed he had a "great deal of contact" with Mr Nicolaou, now the NSW chief executive of the Australian Hotels Association, but "to the best of [his] recollection" the subject of his retainer was never discussed.
The evidence presented to the inquiry suggests that three Liberal-aligned lobbying companies were raking in $17,000 a month from AWH while Senator Sinodinos was on the board.
This was at the same time as the company was struggling to meet its statutory obligations to pay tax and superannuation.
Senator Sinodinos, who has stood aside as federal assistant treasurer pending the ICAC inquiry, said he was aware that Liberal powerbroker Michael Photios was on a $5000-a-month retainer.
But he said he believed it was a "short term" arrangement, and a proposal to pay him a $1 million bonus "on financial close of the PPP [public-private partnership]" was abandoned.
The senator also denied knowing that the company was is such bad shape it had to go to the family of crooked Labor powerbroker Eddie Obeid to obtain $400,000 to pay its taxes.
"When was that?" he said.
"In September 2011, when you were chairman of the company, Senator Sinodinos," Mr Watson said.
Senator Sinodinos said he knew Mr Obeid's youngest son, Eddie junior, was working for AWH in Queensland but he did not know the family had a financial involvement with the company.
He claimed he never had any rights to shares in AWH because the deal "never proceeded".
"You stake your credibility on that?" Mr Watson asked.
"Yes," Senator Sinodinos replied.
He was then shown a February 2013 letter in which his lawyers wrote that he was relinquishing his "right" to shares in the company.
Asked about the evidence of a key witness, AWH investor Rod De Aboitiz, Senator Sinodinos said he couldn't recall him mentioning that AWH owed money to the Liberal Party and that a range of costs had to be cut.
He denied his judgment was "blurred" because he hoped to secure "a substantial personal financial benefit out of the work of Australian Water Holdings".
But he agreed with Mr Watson that he "did nothing" to find out why the costs charged to Sydney Water - which were covered under a contract to provide water and sewerage infrastructure - were "ballooning" while the company's workload was decreasing.
The commission has heard that former Sydney Water boss Kerry Schott warned Senator Sinodinos in 2010 that costs at AWH were out of control and that he may be keeping "dishonest" company.
"I don't remember her using the word dishonest, that's a pretty heavy word to use about people," he said.
The story Arthur Sinodinos under fire at ICAC over AWH charges, donations first appeared on The Sydney Morning Herald.