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ICAC hearing into Eddie Obeid, Joe Tripodi told Liberals paid to lobby for water company suspected of corruption

Former Liberal MP turned lobbyist Michael Photios.

Former Liberal MP turned lobbyist Michael Photios. Photo: Simon Alekna

Liberal powerbroker Michael Photios and fund-raiser Paul Nicolaou were hired as lobbyists by a company under investigation by corruption authorities over a lucrative deal it was pursuing with state-owned Sydney Water Corporation.

The board of the company, Australian Water Holdings (AWH), was asked to consider paying Mr Photios a $1 million success fee if the deal went through, the Independent Commission Against Corruption has heard.

It is also alleged the ''true role'' of an AWH director, Arthur Sinodinos - then NSW Liberal Party treasurer and now federal senator - was to ''open lines of communication with the Liberal Party''.

Australian Hotels Association head and Liberal Party fund-raiser Paul Nicolaou.

Australian Hotels Association head and Liberal Party fund-raiser Paul Nicolaou. Photo: Andrew Quilty

The ICAC is holding an inquiry into allegations former Labor ministers Eddie Obeid, Tony Kelly and Joe Tripodi misused their positions in an attempt to benefit AWH, in which Mr Obeid and his family had a significant interest.

During his opening address on Monday, counsel assisting the commission, Geoffrey Watson, SC, said Mr Photios was engaged by AWH in January 2011, shortly before the O'Farrell Coalition government took power in March.

AWH had been trying to convince the then Labor government, without success, to enter into a public-private partnership with Sydney Water to provide water infrastructure in Sydney's north-west.

Mr Watson said Mr Obeid and his family stood to make $30 million to $60 million from the deal, while Senator Sinodinos would have had a ''$10 [million] or $20 million pay day''.

Mr Photios, who owns registered lobbying firm PremierState and was NSW Liberal vice-president, was engaged by AWH at $5000 a month.

A motion prepared for the AWH board by then chief executive Nick Di Girolamo proposed that, should the deal be approved by the government, Mr Photios would be paid a $1 million bonus.

''It seems that was not passed,'' Mr Watson said. ''But we will be asking one or two questions about it.''

The commission also heard AWH engaged Mr Nicolaou as a lobbyist in April 2007 on a monthly retainer of $5000.

At the time, Mr Nicolaou - currently NSW chief executive of the Australian Hotels Association - was chairman of the Millennium Forum, the NSW Liberal Party's main fund-raising body.

Liberal identity Tim Koelma, described by the commission as ''very closely associated'' with former resources and energy minister Chris Hartcher, was engaged by AWH on a monthly retainer of ''more than $7000''.

Mr Watson said that, at a time when AWH had only 10 employees, ''it also had five lobbyists'' despite having cash flow problems.

He said, at one point, former finance minister Greg Pearce, who, with Premier Barry O'Farrell is not accused of wrongdoing, complained he was being ''over-lobbied'' by the company.

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