The head of a labour hire firm that paid for a research officer for Bill Shorten's election campaign says the wage bill wasn't recorded as a donation to the Labor Party because of "sloppy accounting".
Edward Lockyer, who ran labour hire firm Unibilt, employed Lance Wilson as a $50,000-a-year research officer in February, 2007.
Mr Wilson, however, worked as a campaign officer on Mr Shorten's successful 2007 bid to enter federal parliament, when he was the national secretary of the Australian Workers' Union.
The commission has heard Mr Wilson subsequently shifted to the AWU and Unibilt paid the cost of his wages to the union until November 2007.
Mr Lockyer said he regarded the payments as a donation to the Labor Party.
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Asked by counsel assisting the commission, Jeremy Stoljar SC, why he set up "this extraordinary paper trail" rather than make a donation to the Labor Party, Mr Lockyer responded: "In hindsight I probably should have done that."
The court heard Unibilt's records for 2007-2008 show the cost of Mr Wilson wasn't recorded as a donation.
"Well they should have been. It was sloppy accounting," Mr Lockyer said.
Mr Shorten answered questions about Mr Wilson's position when he faced the commission in July.
It was revealed the funding was not reported to the Australian Electoral Commission until days before his appearance.
