Eddie Obeid.

Disgraced: Eddie Obeid. Photo: Peter Rae

Senior Labor and Liberal figures including Assistant Treasurer Arthur Sinodinos stood to make tens of millions of dollars from a company linked to the family of crooked former powerbroker Eddie Obeid, a corruption inquiry has heard.

Senator Sinodinos, then NSW treasurer of the Liberal Party, was installed on the board of the Obeid-linked Australian Water Holdings (AWH) in 2008 ''to open lines of communication with the Liberal Party'', the Independent Commission Against Corruption heard in Sydney on Monday.

''There will be evidence that he tried to do so,'' counsel assisting the inquiry, Geoffrey Watson, SC, said in his opening address.

Arthur Sinodinos.

Federal Assistant Treasurer Arthur Sinodinos. Photo: Luis Enrique Ascui

The former AWH chairman was earning $200,000 a year for ''a couple of week's work'' and would have ''enjoyed a $10 or $20 million payday'' if Australian Water had won a lucrative government contract.

Senator Sinodinos has since abandoned his rights to shares in the water infrastructure company and denies any wrongdoing. ''The senator will attend ICAC as a witness and is looking forward to assisting the inquiry,'' his office said.

Mr Watson alleged the inquiry would show corruption across political party lines. The company lobbied the Coalition government after the March 2011 state election.

ICAC is examining allegations that the Obeids were ''secret stakeholders'' in AWH and that Mr Obeid corruptly lobbied Labor colleagues on behalf of the company.

The inquiry heard the family stood to make up to $60 million if the government entered into a partnership with AWH.

Mr Obeid's political allies, Joe Tripodi and Tony Kelly, allegedly helped to doctor a cabinet minute in 2010 to benefit AWH, which was ''tantamount to fraud''.

Mr Watson said Mr Obeid had tried to ''eliminate'' two senior public servants who stood in his way. ''Of all Mr Obeid's machinations, the most foul is his involvement in an attempt to ruin the reputations of Dr Kerry Schott and Ron Quill of Sydney Water,'' he said.

Mr Obeid allegedly told then Labor minister Phil Costa that ''you need to sack that bitch'', in a reference to Dr Schott, and that Liberal MP Chris Hartcher would make a corruption complaint against her.

Mr Watson said that Mr Obeid was ''right on the money'' and an anonymous complaint was made to ICAC. ''The source of that complaint is very interesting. This is where the misconduct leaps across party lines,'' he said.

A second ICAC inquiry, starting on April 28, will examine allegations that AWH and other ''unscrupulous businessmen'' paid money to a slush fund linked to Mr Hartcher in exchange for favourable treatment.

ICAC heard that Senator Sinodinos' ''other involvements'' will come under scrutiny in this inquiry.

The inquiry heard that Nick Di Girolamo, a prominent Liberal Party fund-raiser and Obeid associate, transformed Australian Water from a not-for-profit venture into a commercial operation charging exorbitant ''administration costs'' to Sydney Water. This included $75,636 in donations made by AWH to the Liberal Party.

''It seems that Sydney Water has - unwillingly, unknowingly - been a principal Liberal Party donor,'' Mr Watson said.

The party said on Monday it would refund the money to Sydney Water.

The Obeids allegedly became ''secret stakeholders'' in AWH in 2010 when they agreed to pay $3 million for a 30 per cent stake in the company. But the family insists the money was a loan.

One of the terms of the ''loan'' agreement was that Mr Obeid's youngest son, Eddie jnr, would be employed by AWH on a salary of $350,000 a year.

The first witness in the inquiry will be called on Tuesday.