Angus Taylor has inadvertently taken centre stage in an Icac hearing – and the fallout could be profound

Independent Commission against Corruption inquiries have an uncanny tendency to sprawl in unexpected directions.Just ask former New South Wales premier, Gladys Berejiklian, who was caught on tape with her secret boyfriend, former NSW MP Daryl Maguire, during an investigation into his dealings with developers. Or former premier Barry O’Farrell, who was tripped up over a bottle of Penfolds Grange during an inquiry into state water contracts.In the Icac hearing on Tuesday into allegations of corruption against people associated with the NSW Liberal party, the federal opposition leader, Angus Taylor, took centre stage – even though he was hundreds of kilometres away in Rockhampton. He is not accused of wrongdoing.The bombshell came in a group chat of young Liberal power brokers known as “Reformers” who are at the centre of Icac’s Operation Rosny, an investigation into alleged breaches of the NSW Electoral Funding Act.The secretive Reformers group were a sub-faction of the right of the NSW Liberals who were intent on restoring conservative values to the party. The Icac is looking at alleged undisclosed donations made by the fugitive developer Jean Nassif and others that were used to fund the Reformers’ efforts to recruit members and take over branches.Sign up for the Breaking News Australia emailTaylor surfaced in a message from Dallas McInerney, head of the Catholic Schools Association NSW and supporter of the Reformers, which was shared with the group in March 2021. In the message McInerney allegedly said he planned to “to shake down Angus for $10,000” while at a meeting in Canberra.On Tuesday, a former NSW Liberal parliamentary staffer and associate of the Reformers, Dylan Whitelaw, who is not named in Icac’s allegations, gave evidence. He was shown a message sent to the group in which he allegedly wrote “Dallas has told me he got the commitment from Angus the 15k injection plus a 3k monthly donation!” Whitelaw said he did not recall sending the message, nor did he recall Taylor making a financial contribution to the Reformers.We don’t know whether Taylor actually made the payments – and even if he did, there’s a question over whether they were covered by NSW’s political donations laws. A statement issued after Taylor was named at Icac did not deny the payments or address them directly.“The Leader is not a party to the matters before the commission, nor has he been approached,” a spokesperson for Taylor said in a statement. “Donations and fundraising activities are declared in accordance with the rules and are a matter for the Party.”The implications, if these payments were made, though, could be profound.For a start, there is a question as to whether these are undeclared political donations or in breach of the donation caps in NSW’s Electoral Funding Act.This would be serious for the leader of a major political party.But there is also the internal political fallout. The Reformers were set up to demolish the Centre Right faction and wrest control of the NSW party from the Moderates.If it was proven that their leader was funding one side of a vicious factional war, it would be hard for many in the party to stomach.Taylor does not appear as a donor on the NSW donation disclosure register in 2020-2021, 2021-22 or 2022-23. He is listed on the federal donations register as having made only one $1,500 donation in 2010 – to Malcolm Turnbull’s campaign.Icac is also investigating other alleged donors to the Reformers, including Nassif, former hotelier Michael O’Hara, and Catholic Schools NSW. McInerney has stood down as Catholic Schools NSW CEO and is expected to give evidence later in the inquiry.Nassif allegedly paid a total of $2m to Reformers members Christian Ellis, Charles Perrottet and Jeremy Greenwood. O’Hara paid $165,000 and Catholic Schools NSW donated over $250,000.Some of these funds were allegedly paid under sham arrangements to public relations firms controlled by Ellis and Greenwood.Most of Tuesday was spent hearing evidence from Whitelaw, who joined the Liberals when he left school and who was vice-president of the Mittagong branch of the Liberal party. He soon fell into the orbit of the conservative Reformers.In 2019 he went to work for Catholic Schools NSW and later for Ellis’s public relations firm, Beckington, again on Reformer work.His evidence revealed how Catholic Schools NSW, a registered charity, was used to employ young men in the Reformers.The organisation is responsible for funding Catholic schools in NSW and administers nearly $4bn in state and federal grants for the sector.The allegations will now turn attention to whether there are breaches of charities laws and politicisation of a major education funding body.Whitelaw was employed by Catholic Schools NSW as a data processor, a junior role, but told the commission he spent much of his time on Reformers work, which included organising events and recruiting like-minded conservative members in the Wollondilly area.Robert Assaf, a key member of the Reformers, was also employed at Catholic Schools. Cecile Piat, Ellis’ wife, was employed as a secretary.“Rob did very little Catholic Schools work,” Whitelaw said. “It was a running joke between me and Rob,” he said, adding that his “guess” was Assaf spent 60% of his time on Reformer work and 40% on “his real job.”There is a live issue, still to be addressed by Icac, as to whether the contributions to the Reformers were caught by the NSW political donations laws.The group was doing political work – it was recruiting conservatives to branches, trying to take control of the Liberal party administrative structure and attempting to influence policy, but it had no formal status within the Liberal party.O’Hara, the hotelier and former business partner of right power broker and MP Damien Tudehope, took issue with whether the payments he made to the Reformers were political donations.The Reformers were not registered as a political party, or a third-party entity, raising questions about how far the Electoral Funding Act reaches to require disclosure of donations to entities outside the formal party structure.Counsel assisting the inquiry, Peggy Dwyer SC spent considerable time seeking to establish that O’Hara knew the Reformers were recruiting conservatives to branches, and that the objective was to take over branches from the Moderates.But O’Hara became disillusioned by 2022 and pulled his funding. In his last conversation with the Reformers, he told Jean Claude Perrottet he would only pay the most recent invoices, adding: “I may as well support the Greens or Teals, as Dominic [Perrottet] was rolled on so many issues instead of prosecuting the principles I believed he stood for.”