Former NSW treasurer Eric Roozendaal knew about an attempt by mining baron Nathan Tinkler to bribe a Newcastle MP, the NSW corruption watchdog has heard.
Former Labor minister Jodi McKay told the Independent Commission Against Corruption (ICAC) on Thursday that when she warned Mr Tinkler that as a developer he could not chip in for her 2011 election fighting fund, he told her there were ways around the laws.
"His immediate reply was, 'I have hundreds of employees and I can get around the rules that way'," Ms McKay told the inquiry.
"It certainly felt like he wanted my support and he was prepared to buy it."
Mr Tinkler had a stake in local development group Buildev and was pushing hard for a coal loader facility, while Ms McKay favoured a container terminal.
Ms McKay said she had always refused to discuss the issue with Mr Tinkler because Buildev had made a $50,000 donation to her 2007 election campaign and she did not think it "appropriate".
But in the lead-up to the 2011 election she was increasingly convinced Eric Roozendaal was stonewalling her.
"Something was very wrong in the treasurer's office. He knew it and I knew it," she said.
A month out from the election she called Mr Roozendaal to express her "grave concerns" about the government's delays in announcing the container terminal decision.
"He went silent, and in a low voice he said, haven't you spoken to Tinkler?" Ms McKay said.
"He knew I had had a conversation with Nathan Tinkler and that made me very uneasy - because the last conversation I had with Nathan Tinkler was when he offered to donate to my campaign."
"And it was clear in your mind that the treasurer was aware of that?" counsel assisting Greg O'Mahoney asked.
"Yes," the witness replied.
Within hours of the conversation, a document undermining Ms McKay was leaked by the treasurer's office to her local newspaper.
She broke down in the ICAC witness box as she learned the watchdog's investigators had uncovered evidence that the Tinkler group and ex-MP Joe Tripodi were behind a secretive Newcastle flyer campaign, launched in the NSW Labor government's final days and apparently designed to shatter Ms McKay's re-election chances.
"I believed they were behind it," she said through sobs.
"But that's the first time I've been told that."
Ms McKay told reporters it was a vindication.
"It was cleansing. I've waited three years," she said.
"I can now move on - and never go back to politics."
The inquiry continues.
