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ICAC hears of grant 'conflict of interest'

Gina Rushton and Tiffanie TurnbullAAP
Senior NSW public servant Michael Toohey says he couldn't understand why the grant was rushed.
Camera IconSenior NSW public servant Michael Toohey says he couldn't understand why the grant was rushed. Credit: AAP

A senior NSW public servant concerned about a regional grant would have raised issues about a conflict of interest had he known of the relationship between then-treasurer Gladys Berejiklian and the electorate's MP, an inquiry has been told.

The Independent Commission Against Corruption has begun hearings into potential breaches of public trust which prompted the former NSW premier's resignation on October 1.

ICAC is investigating whether Ms Berejiklian "exercised public functions" in a position of conflict given her secret five-year personal relationship with disgraced former MP Daryl Maguire, which she admitted during hearings into his conduct in October last year.

It will probe whether she broke the law by failing to disclose her relationship and whether she "was liable to allow or encourage" his conduct.

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Ms Berejiklian will not appear as a witness this week, but on Monday the commission played part of a compulsory interview with her less than two weeks before she announced her resignation.

In the footage, counsel assisting the commission Scott Robertson asks if she suspected Mr Maguire had been engaged in corrupt conduct when she sacked him in July 2018 from his role as parliamentary secretary.

Mr Maguire is accused of abusing his public office and improperly gaining a benefit for himself while serving as the Wagga Wagga MP between 2012 and 2018.

"I couldn't make any assumption at that stage. He was professing his innocence and saying it was a misunderstanding," Ms Berejiklian said.

"I was in shock. I didn't know what to think."

Mr Robertson said he wasn't asking whether she knew Mr Maguire had engaged in corrupt conduct, but whether she suspected.

"I can't remember what I thought at that time."

The commission is investigating Ms Berejiklian's role in millions of dollars worth of grant funding awarded to two projects in Mr Maguire's electorate in 2018.

NSW Office of Sport director Michael Toohey told the hearing he was asked in 2016 to draft an urgent submission to the government's expenditure review committee for a grant for the Australian Clay Target Association in Wagga Wagga.

Mr Toohey said it was "extremely unusual" he would be asked to put together a submission at such short notice, describing the way the grant's benefit-to-cost ratio was calculated as "inadequate".

He said he didn't understand the rush.

"I didn't know why it was urgent," Mr Toohey told the inquiry on Monday.

"The request was to get it done."

Mr Toohey said he was "extremely surprised" when Mr Maguire publicly announced $5.5 million in funding for the association in January 2017, without making clear the money was "a long way off being guaranteed".

He said he thought the announcement was an attempt to "wedge" administrators before there was a strong business case.

"It makes it very difficult for people to say no," he said.

Mr Toohey had no knowledge of the personal relationship between the then-treasurer and Mr Maguire until it was revealed in ICAC hearings.

If he had known, he said he would have raised his concerns about funds being allocated to a local member "based on such scant and inadequate information".

"I can't see how that is anything but a conflict of interest," he said.

The hearing is expected to run for about 10 days, overseen by ICAC Assistant Commissioner Ruth McColl SC.

Former bureaucrat turned NSW Rugby boss Paul Doorn will take to the witness box on Tuesday, having worked in similar roles during the period under scrutiny.

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