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ICAC's Geoffrey Watson gets his 'bookkeeper' Ray Carter

In Brian De Palma's 1987 film The Untouchables, the capture of gangster Al Capone's bookkeeper is a breakthrough moment for Eliot Ness and his crew of prohibition cops.

At the Independent Commission Against Corruption on Monday, counsel assisting Geoffrey Watson, SC, got his very own bookkeeper. His name is Ray Carter.

Since the beginning of the ICAC inquiry into allegedly illegal political donations being funnelled to the NSW Liberal Party via various slush funds, Mr Watson's accusations have mostly hit a brick wall of denial from those who have stepped in to the witness box.

Witness after witness has denied that payments to Eightbyfive - a business operated by Tim Koelma, once a policy adviser to former energy minister Chris Hartcher - were disguised political donations. Rather, they were a means of securing legitimate public relations, media and political advice. 

When Mr Carter entered the ICAC witness box it took him approximately three minutes to blow those stories to smithereens.

"I don’t know a great deal about Eightbyfive but I did collect money for that and give that to Eightbyfive for the purpose of coming back to the Liberal Party," he told the commission.


Asked if some of that money was from prohibited donors, such as property developers, Mr Carter responded with an emphatic: "Yes."

Mr Carter is no accountant, but he is one of Mr Hartcher's closest political aides, having worked for him for about 40 years. As the saying goes, he knows where the bodies are buried.

His job before the 2011 state election was to hit up potential donors for money to support the campaigns of central coast candidates, including Mr Hartcher, Chris Spence and Darren Webber.

Mr Carter explained that one of the ways he did this was by requesting that cheques - including from property developers who had been banned from donating in NSW elections since December 2009 - be written out to Eightbyfive instead of the NSW Liberal Party.

Another was to ask for donations to be paid to an entity called the Free Enterprise Foundation. Mr Carter happily confirmed it was established to wash illegal political donations through the federal division, where developers are still allowed to donate. The money would then be redonated by the FEF to the NSW Liberal Party.

Crucially, Mr Carter insists that "everyone knew" about the Free Enterprise Foundation and its purpose, including senior officials of the NSW Liberal Party.

After weeks of denials, Mr Carter's evidence is Mr Watson's breakthrough moment in support of his thesis that the party systematically rorted the political donations rules.