They claim they didn’t know the rules. So why go to such absurd lengths to hide the cash?

In politics, where players often spend more time tearing down those on their own team than the opposing side, branch stacking is a time-honoured tradition. All parties do it. All factions engage in it. A hostile takeover of a branch, which allows the victors greater power to pursue their own agenda, can be an ugly and divisive business.

But it’s not necessarily illegal. During her opening address at the Independent Commission Against Corruption’s blockbuster Operation Rosny inquiry, counsel assisting Dr Peggy Dwyer, SC, pointed out that providing political donations for the purpose of branch stacking does not meet the definition of corrupt conduct.

But what the ICAC is interested in is the means used to pull off a stacking attempt. If funding used to capture branches has come from prohibited donors or been made without proper disclosures, that can absolutely constitute corruption. There is also evidence that some memberships were paid by others, which is a big no-no in internal party rules.

Amid a major rupture over the future direction of the NSW Liberal Party, a group of right-wing conservatives known as the Reformers in 2018 embarked on a five-year campaign to take over left-wing branches via thousands of new memberships.

They held events and talks across the state in which topics such as same-sex marriage, abortion rights and euthanasia laws were discussed. Guest speakers included the former prime minister Tony Abbott, broadcaster Alan Jones and News Corp columnist Miranda Devine. Attendees were encouraged to join up to make sure their voices were heard within the party. Neither the speakers nor the attendees are accused of any wrongdoing and are perfectly entitled to engage in political discourse.

What is problematic for the Reformers is evidence before the ICAC that core organisers received hundreds of thousands of dollars in support via millionaire hotelier Michael O’Hara, the former chief executive of Catholic Schools NSW Dallas McInerney, and fugitive Sydney property developer Jean Nassif.

A threshold question before the ICAC is whether these funds constituted a donation to a political party or associated entity. If so, O’Hara should never have given money because as a liquor and gambling baron he is a banned donor. Leaving aside whether McInerney should have used funding or resources from his Catholic schools organisation, he is alleged to have channelled so much money to the Reformers that it well and truly breached legislated donation caps.

The Reformers was not a formal wing of the Liberal Party. Indeed, many in the party had no idea it even existed. But the ICAC seems convinced the group’s purpose was to benefit the broader party, and therefore it is subject to the state’s donation laws.

Witnesses in the gun at the ICAC’s public hearings claim they had no idea that’s how the law worked. On Thursday, a founding member of the Reformers, Robert Assaf, told the commission he was aware of laws governing political fundraising but didn’t think his factional group was a political party, and therefore “didn’t think the law applied to us” and that “we didn’t see ourselves as a political party”.

“We just didn’t think the law applied to us … because it was an electoral law, we’re not campaigning in elections in that sense,” he said. “We’re internal Liberal Party machinations.”

On Monday and Tuesday, hotelier O’Hara expressed his astonishment at apparently only learning recently that his $165,000 contribution to the Reformers may have represented a donation.

Dwyer later in the week pointed out that “ignorance of the law is no excuse”. The Liberal Party also went through a damaging donations inquiry a decade ago, codenamed Operation Spicer, and should have learnt its lesson.

The difference between the ICAC’s view and that of the Reformers being hauled before the inquiry is one of the central questions being discussed in NSW politics right now. While the work of the Reformers is being unpicked at the ICAC, it is probably not the only group to have gathered funds to wield influence over branch numbers.

Senior political figures the Herald has spoken with over recent days – including some not aligned with the Liberal Party’s right faction and therefore with no real skin in the game – have said they could understand why there may be ambiguity around the issue. The Herald has been told many other witnesses will raise this issue when they have their turn in the witness box over the next seven weeks.

The big problem with the defences of Assaf, O’Hara and others is that the ICAC has heard evidence that the Reformers and its financial backers went to elaborate lengths to mask the money.

If the Reformers genuinely believed their fundraising was above board and outside the scope of electoral laws, why go to such elaborate, sometimes absurd, lengths to hide the trail?

It’s a question they have, funnily enough, struggled to answer in the witness box.

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