List of expenses: Nick di Girolamo. Photo: Nick Moir
The fraud squad may be drawn into the alleged fraudulent dealings at an Obeid-linked water company currently at the centre of a corruption inquiry.
"I was going to drop the F-word, fraud,'' said Geoffrey Watson, SC, counsel assisting the Independent Commission Against Corruption, on Monday.
The inquiry has heard that Australian Water Holdings' chief executive Nick Di Girolamo was billing government-owned utility Sydney Water for expenses which had nothing to do with the provision of water services in Sydney's north-west growth centre.
The inquiry heard yesterday that he submitted bills to Sydney Water for a $15,000 Balmain Tigers dinner, $885 for limousine services for himself and his friend Eddie Obeid jnr, $2200 for the Italian Chamber of Commerce's gala ball, as well as thousands of dollars for a trip to a resort on the reef at Cairns for himself and Eddie Obeid jnr.
AWH was also billing Sydney Water for their legal letters complaining about Sydney Water's conduct.
Financial records tendered at the ICAC suggest Mr Di Girolamo was incurring hefty gambling debts, with at least $120,000 going from his bank to pay internet betting site TopSport between 2008 and 2009.
Andrew Kostopoulos, who is representing disgruntled AWH investors, stated that due to the ''very serious nature'' of the billings the matter ''may have to be referred elsewhere''.
Counsel for Sydney Water, Bruce Oslington, QC, also indicated that the question of overcharging and alleged fraudulent billings, including on political donations, would be pursued elsewhere.
''We fully accept that the purpose of this inquiry is not to provide a debt recovery action for Sydney Water,'' he said. However, the utility was willing to provide a forensic accountant so it could ''know the full scope of overcharging by Australian Water Holdings against Sydney Water,'' Mr Oslington told the inquiry.
AWH's former chief financial officer Bruce Chadban said he had suggested to Mr Di Girolamo that some of the travel and other costs raised in the inquiry should not be remitted to Sydney Water, but ''Nick said, 'Leave them in'.''
Mr Chadban also recounted reimbursing Mr Di Girolamo for up to $30,000 in one week with no documentation of how these expenses were incurred.
Mr Chadban said that on his first day of work he was informed that AWH was running out of cash but that Mr Di Girolamo had later assured him that AWH wouldn't go broke as it could always obtain funds from Sydney Water.
Meanwhile, a group of disgruntled AWH investors, who are suing current and former AWH directors including Liberal senator Arthur Sinodinos, foreshadowed adding potentially ''more serious'' allegations to their case in the Federal Court.
The investors include financier Rod De Aboitiz, Danny Koutsogiannis, who is Mr Di Girolamo's brother-in-law, and the Navarra family, who run reception centres including Le Montage and Conca D'Oro. They are suing AWH and nine of its current and former directors including former state treasurer Michael Costa and Mr Di Girolamo for misleading and deceptive conduct.
They are hoping to recover their $2.5 million investment.
Senior counsel for the shareholders, Daniel Feller, told the Federal Court on Monday that his clients were considering adding new allegations to their case based on evidence before ICAC.
The new claims were ''perhaps even more serious than the ones we allege now'', Mr Feller said.
But he said the new allegations would not necessarily involve all the directors, and made no reference to Senator Sinodinos.
Mr Feller said ICAC's inquiry into AWH, which is now in its third week, had ''made public a large volume of documents to which we have not previously had access''.
The shareholders had launched their court case in late January, about three weeks before ICAC announced its inquiry on February 18.
Mr Feller said the documents had ''cast a lot of light'' on the running of AWH.
Mr Costa and Senator Sinodinos have previously told the Herald they reject the claims of the minority shareholders and intend to defend the matter.