Foundation helped wash Lib donations: ICAC

A trustee for a foundation that was allegedly used to wash suspect payments for the NSW Liberal Party has told the state's corruption watchdog he never checked whether the money was flowing from prohibited donors.

The Independent Commission Against Corruption (ICAC) is investigating allegations of widespread donation rorts in NSW, including claims the Canberra-based Free Enterprise Foundation was used to re-channel donations so that the true source of the money could be concealed.

Documents obtained by the ICAC show the foundation donated some $700,000 to the NSW Liberal Party in the lead-up to the 2011 state election.

"Not all of that came from prohibited donors, but a substantial part of it did," counsel assisting Geoffrey Watson SC has told the inquiry.

Founding trustee Anthony Bandle on Wednesday denied the body was simply a fundraising organ for the Liberal Party.

He said he was not required to comply with requests from NSW Liberal fundraiser Paul Nicolaou to send on cheques received by the foundation - although he never turned down any such request.

"And you call that the exercise of discretion, do you?" Mr Watson asked.

"Yes," Mr Bandle replied.

Asked whether he had ever checked if any person donating to the foundation was a prohibited donor under any of the state schemes, Mr Bandle said: "I haven't."

Emails sent by then-NSW Liberal Party finance director Simon McInnes in December 2010 - three months out from the 2011 state election - thanked Mr Bandle for all the "fabulous donations" he had sent the party's way, and noted that "Paul (Nicolaou) has been inundating you of recent".

Mr Nicolaou was last month forced to stand down as executive chairman of the party's official fundraising arm, the Millennium Forum.