Hotelier tells ICAC he made 'mistake' trusting Liberal figures

Hotelier Michael O'Hara told the ICAC key figures being investigated "obviously went off the track". (ABC News: Timothy Ailwood)

A hotelier who helped fund a conservative Liberal Party faction has told the NSW corruption watchdog he made a "mistake" trusting key figures at the centre of the bombshell investigation.

Part of the Independent Commission Against Corruption's (ICAC) probe is examining whether Michael O'Hara, a prohibited donor, made political donations "in amounts that were not declared and exceeded applicable donation caps".

It is alleged he used a company called Paslibdan Pty Ltd to make the donations, disguised as consultancy payments, to help stack the Liberal Party with conservative members.

Mr O'Hara, the first key witness in the Operation Rosny inquiry, said he was "absolutely astounded" and "disgusted" by allegations aired at the commission involving members of the right-wing faction known as NSW Reformers.

The Reformers is a Conservative Christian Liberal factional group associated with several key figures in the inquiry, including its founder and former Liberal powerbroker, Christian Ellis, and the brother of former NSW premier Dominic Perrottet, Jean-Claude Perrottet.

Dominic Perrottet, who referred the allegations to ICAC in 2022, is not accused of any wrongdoing.

Counsel Assisting the Commission Peggy Dwyer SC questioned Mr O'Hara on invoices and emails detailing his payments to companies linked to Mr Ellis and Mr Perrottet, which referred to "strategic wealth strategy investment advice".

Mr O'Hara maintained he believed the arrangement was intended to promote his conservative values within the Liberal Party.

"It's like running a hotel where I might sit at the top and know what's going on, but I never interfere in the day-to-day operation when you've got good people, good managers, they run it," Mr O'Hara said.

"I thought they were good people… I made a mistake in supporting them because they obviously went off the track."