The president of Victoria's upper house has been accused of involvement in a branch-stacking operation in Melbourne's northern suburbs.
Banyule Mayor Rick Garotti told an Independent Broad-based Anti-corruption Commission inquiry on Monday that Legislative Council President Nazih Elasmar was paying memberships for others in Labor's Darebin branch.
While he conceded he did not have evidence, Mr Garotti "assumed (Mr Elasmar) had been covering costs of members in that branch".
Mr Elasmar is the second Labor MP to be accused in the IBAC hearings of paying for other people's memberships, which is a breach of Labor Party rules.
Luke Donnellan resigned from cabinet last week, admitting he breached party rules but "never misused public funds or resources in any way".
Both men are members of the moderate faction, which was led by upper house MP Adem Somyurek until a Nine Network investigation exposed the branch stacking operation.
The memberships helped the faction gain influence and to ensure their preferred candidates were preselected.
IBAC is investigating whether taxpayer funds and money intended for community associations was used for such work.
Mr Garotti left the Labor party in February after he was referred to its disputes tribunal for alleged branch-stacking activities following a major audit of the Victorian membership.
He told the IBAC inquiry he spent more than $25,000 over a five-to-six year period on running Labor's Heidelberg branch and paying for other people's memberships.
Mr Garotti said he spent $5000 a year, of which $2000 went to running the branch and hosting events, with the remaining $3000 spent on memberships.
He said Dr Hussein Haraco, the secretary of the Somali Australian Council of Victoria, had contributed a "couple of thousand dollars" annually towards memberships during the same period.
Mr Garotti said "a significant majority" of Heidelberg branch members were from the Somali community and invited by Dr Haraco.
He recommended Dr Haraco be employed as an electorate officer to Mr Somyurek as he was an important faction member and "needed to be looked after".
Counsel assisting the inquiry Chris Carr SC said it appeared "roles as elected officers were a form of currency to be deployed by MPs to reward those in the faction".
Mr Garotti agreed, saying there were several instances of factional allies being "looked after".
"Nazih Elasmar's daughter worked for (Koroit MP) Marlene (Kairouz), and his wife worked for the local federal member in Cooper," he said.
Dr Haraco is set to appear before the inquiry on Wednesday.
The inquiry has heard from two former staffers of Mr Somyurek who said they did factional work for the MP while employed in taxpayer-funded positions.
Mr Somyurek quit Labor before he was expelled but retained his upper house seat, while factional allies Robin Scott and Ms Kairouz resigned from cabinet.
All three deny stacking allegations.
Australian Associated Press