The Liberal Party's former federal treasurer, Michael Yabsley, has admitted he knew of illegal donations made through the notorious Free Enterprise Foundation during his tenure.
His admission that property developers had "in a couple of cases" donated to the NSW Liberal Party will put further pressure on the party's former treasurer in that state, Arthur Sinodinos, who denies he had any knowledge of such donations.
Mr Yabsley was asked by the ABC's Four Corners program whether he knew prohibited donors were being asked to give money to the FEF, which would then make its way to NSW.
"In a couple of cases, yes. We're talking about property developers, owners of certain licensed premises. I don't think it was a great secret about the fact that that was happening," he said.
"It struck me as being something that had been happening over a long period of time. There was no particular reason to suggest that it was unlawful in a way that was different with what had been done in the past."
Mr Yabsley, who served as the federal party honorary treasurer between 2008 and 2010, described himself as having grown "sanguine" about the funnelling of donations through the Free Enterprise Foundation. But he told the ABC he believes it is now "high time" the system was dismantled.
"I believe this is now crunch time," he said. "You have the damage that has been done to the reputations of many, many individuals, to the reputations of many companies and the reputations of the major political parties."
"It all points to the absolute case to do away with the system of political fundraising that we currently have."
Senator Sinodinos has consistently denied having any knowledge of the banned donations made through the FEF, which included $250,000 from property developer Brickworks and $150,000 from Westfield Corporation. The money was ultimately used for the NSW Liberal Party's successful 2011 election campaign.
The controversial fund was the focus of an Independent Commission Against Corruption inquiry in 2014. The ICAC has not yet handed down its findings from that inquiry, Operation Spicer. NSW Opposition Leader Luke Foley has called the FEF a "front", though its fundraising activities have now essentially stopped.
Senator Sinodinos repeatedly told the ICAC inquiry that he could not recall details of donations made during his time as NSW Liberal Party treasurer between 2009 and 2011.
Last month he declined to appear before a hastily-convened Senate inquiry into the controversial fund, arguing it was a "political stunt" by Labor. He also declined a formal interview with Four Corners but said he condemned any situation in which people had broken the law.
"I certainly never condoned or been involved in such activity," he said.
The Coalition's campaign spokesman, Finance Minister Mathias Cormann, brushed off questions about Mr Yabsley's admission on Monday, telling reporters: "All political parties ought to comply with all the rules."
Education Minister Simon Birmingham told ABC radio the Liberal Party followed a "very clear process" on donations. "I think this is a political distraction from the important issues the nation faces," he said.
The Four Corners program also probed the reasons behind the large political donations dished out by Australian corporations.
Luca Belgiorno-Nettis, whose Transfield Holdings previously donated to both sides, said it was "fairly plain" the money bought him the ability to "knock on the door and make the phone call and have the meeting with the political masters" who could affect decisions and opportunities.
"I think it's inevitable," he said. "You know the famous Latin saying 'do ut des' - you give in order to have given back."
Former NSW government whip Peter Phelps was asked about previous revelations by Fairfax Media that Dick Honan, the chairman of ethanol producer Manildra, donated more than $160,000 to the Coalition prior to the introduction of laws that benefited the company.
"I don't think he gave out of the goodness of his heart, that's for certain," he said. Mr Phelps crossed the floor and resigned as whip rather than support the bill, requiring small petrol retailers to sell ethanol-blend fuel, which he said was contrary to Liberal Party values.
