From a Hog's Breath Cafe worker to a side of high-ranking
Liberal party officials and property developers - the Independent
Commission Against Corruption (ICAC) this week again served up evidence
of casual corruption in NSW politics.

Liberal MP Andrew Cornwell's political career is cooked - his
handling of a brown paper bag stuffed with $100 bills and a sham
$10,000 painting sale to a property developer is hard to ignore.

And the stench from the inquiry into allegations Liberal
party members figures tried to circumvent NSW fundraising bans ahead of
the 2011 state election has wafted from the Charlestown office of the
previously low-profile Dr Cornwell to the upper echelons in Canberra.

Federal Liberal Party director Brian Loughnane - husband of
the prime minister's chief of staff Peta Credlin - was dragged into the
inquiry when the ICAC was shown an email written by federal Liberal
executive Colin Gracie to then-NSW Liberal party finance director Simon
McInnes said.

The July 2010 exchange suggested Mr Loughnane allowed banned
NSW political donations from developers to be funnelled through federal
party channels.

The NSW Liberal Party rejects this, saying the email relate
to a "potential donor", who was not a property developer, and any funds
were intended for an election campaign in the federal seat of Banks in

However, much of the ICAC's attention this week has been on the relaxed nature of shady dealings at a local level in Newcastle.

Joshua Hodges, a former campaign staffer for departing
Newcastle MP Tim Owen, told the ICAC he was well aware his $10,000 fee
for three months of work for the 2011 state poll was being paid for by
illegal means.

He said he was paid by property developer Nathan Tinkler's
Buildev company and building suppliers Saddingtons, as part of a scheme
to subvert electoral fundraising laws.

The money granted the developer access to Mr Owen, the part-time Hog's Breath Cafe employee told the inquiry.

But it did not grant them approval for projects, he said.

Mr Hodges said campaign manager Hugh Thomson told him to bill local business Saddingtons for his work.

"To cover part of my costs," Mr Hodges said.

"That was the donor that was going to be paying."

Developers have been banned from making political donations
in NSW since 2009 but they can legally contribute to federal campaigns.

Tinkler has been lobbying for a coal terminal to be built in the Newcastle area.

The inquiry was also shown text messages and emails showing Buildev was slow to pay up, forcing Mr Owen to chase the money.

The latest round of corruption hearings had an immediate impact.

Shortly after counsel assisting Geoffrey Watson finished his
opening address on Wednesday, Mr Owen and former NSW government whip
Andrew Cornwell stood aside from the Liberal Party.

Dr Cornwell, a veterinarian, told the inquiry he accepted
$10,120 from property developer Hilton Grugeon in a sham deal for a
cheap, re-gifted painting and used the money to pay his tax.

Another $10,000, kept in a brown paper bag and allegedly
handed to Dr Cornwell by property developer and now Newcastle mayor Jeff
McCloy in the back of a Bentley in 2010, was eventually funnelled back
to the Liberal party.

On Friday, Dr Cornwell released a statement stating that he
would not be contesting next year's election and was taking leave from
his parliamentary duties.

Mr Owen is due to give evidence on Monday.