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Alan Haselden, former deputy mayor of the Hills shire council, was stunned when developer Jean Nassif, owner of Toplace, showed him plans for “colossal structures” at Castle Hill back in 2018 or 2019.

“He was pretty bullish about the whole thing … I sat there like the proverbial stunned mullet,” Haselden told a New South Wales parliamentary inquiry in 2023.

Development, and the lengths people will go to get approval, is at the heart of two separate corruption investigations now under way in NSW.

Until now, both major parties were more concerned about the rise of One Nation in NSW polls ahead of next March’s state election.

But thanks to not one but two hearings involving serious allegations of corrupt conduct involving Liberal political operatives, the NSW Liberals now face an existential crisis.

Just ask Labor, which took a decade to win back the trust of voters after Labor power broker Eddie Obeid and former resources minister Ian Macdonald were found to have conspired to grant the Obeid family a coalmine worth an estimated $60m. Both MPs were jailed.

Two weeks ago the NSW Independent Commission against Corruption (Icac) announced it was about to begin its hearings into events in the Hills shire in Sydney’s north-west in 2022.

It’s unclear why it has taken four years to reach a hearing.

From what we know so far, Icac will allege that in the quest to install their factional allies, a group of young, well connected Christian men, known as the Reformers, installed their own slate of councillors on Hills shire council during the 2022 local government elections, with the assistance of illegal donations.

They are also alleged to have played a role in ending the career of sitting state minister David Elliott in 2023 and attempting to interfere with duties of the building commissioner, David Chandler.

The inquiry will also explore the Reformers’ alleged links to Nassif, now a fugitive in Lebanon, and how these might have affected the approval of the Skyview development at Castle Hill.

The second matter is the criminal trial of former Liberal government minister and member for Drummoyne John Sidoti. This week Sidoti was charged with misconduct while in public office and faces trial in coming months.

The charges flow from Icac findings in 2022 that Sidoti engaged in serious corrupt conduct by lobbying councillors on City of Canada Bay council to relax planning controls relating to properties his family owned. Sidoti has said he would fight the charge and clear his name.

The cases are separate and unrelated but raise some common issues, including how councillors, who are at the forefront of approving development in their area, are vulnerable to pressure from powerful figures within their own party.

It will raise questions about the internal governance of the Liberal party and more broadly about integrity within the major parties.

In the Sidoti case, Icac heard evidence from councillors about how they felt they were being subjected to undue pressure by their state MP – and that they were not aware of his personal interests. Sidoti maintains he was making representations on behalf of constituents.

The Hills allegations are more complex and will explore how alleged branchstacking and illegal donations may have poisoned decision-making and cost careers.

Factional wars

Councillors are at the bottom of the political hierarchy but are often ambitious and dependent on party power brokers to advance their careers.

The council elections in NSW were delayed during Covid lockdowns, and did not take place until late 2021.

Beginning in 2018, the Hills had been alive with factional fighting, not between the usual foes – the moderates and the conservatives – but between the right and the centre right.

The right drew their support from within the conservative Catholic community and counted among their number the elder statesman Damien Tudehope, until recently NSW shadow attorney general; the former NSW premier Dominic Perrottet and his brothers, Jean-Claude and Charlie, who were active party operatives.

It is the activities of Jean-Claude and Charlie that are under investigation by Icac, along with other factional warriors Jeremy Greenwood, Robert Assaf and Christian Ellis.

There is no suggestion that Dominic Perrottet is under investigation.

The centre right is loosely aligned with evangelical Christians. Prominent members include the federal Liberal MP Alex Hawke, former state transport minister David Elliott, former prime minister Scott Morrison and former federal opposition leader Sussan Ley.

One centre right figure told the Guardian he became aware of branch-stacking allegations around 2018, when the whole family of a developer joined a local Liberal branch.

“It was happening at branches in Castle Hill and in Parramatta, he claimed. “Whole families – eight or 10 members.”

Icac is investigating whether Ellis, Greenwood, Assaf and Jean-Claude and Charles Perrottet solicited or accepted political donations, including from prohibited donors, in amounts that were not declared and exceeded caps on donations.

Donations from property developers were banned in NSW following previous scandals, where developers were found to have sought and received rezonings in exchange for generous donations.

The focus in the Hills inquiry will be on whether they accepted donations from Nassif, and whether there was a quid pro quo expected or delivered.

As the council elections approached, tensions between the factions erupted.

The popularly elected mayor Michelle Byrne and six sitting Liberal councillors, (including Haselden) were replaced by the Liberals’ state executive (the governing arm of the party).

Baulkham Hills MP Ray Williams told state parliament, in a late night adjournment address in 2022, this was done “without the usual preselection processes normally afforded to such positions”.

Charles Perrottet was chair of the local government committee on the Liberal party’s state executive at the time. Ellis was on state executive. The councillors were replaced by candidates with links to the Reformers, including Ellis’s mother.

A minister loses out

The Icac inquiry will also look at how branch stacking and the activities of factional power brokers may have affected the career of David Elliott. The former NSW transport minister retired after his seat was abolished and he was unable to convince local branches in Castle Hill to make him the candidate.

By this stage the Right had an iron grip on the Castle Hill branches.

“Contemporary politics is transactional and I accept that. You can’t come into this game and be so thin skinned that you spit the dummy just because a deal is done or [a faction] plays out against you,” Elliott said at the time.

He is expected to give explosive evidence at the inquiry, including allegations about how he was pressured over Nassif’s developments and subjected to surveillance.

Getting rid of the building commissioner

Corruption can make the jobs of some of our public watchdogs difficult, if not unbearable.

David Chandler was NSW’s first building commissioner. He was appointed to investigate shoddy developments

In 2022, Chandler was discussing an order on Nassif’s Toplace that would have prohibited it selling apartments in the Skyview project at Castle Hill, when Chandler says Toplace executives falsely accused him of requesting a $5m bribe.

Chandler told a NSW parliamentary inquiry that Toplace executives had said they had evidence of a “shakedown” and they had read from an email which in substance said: $5m would make the building commissioner go away.

Chandler told the inquiry he immediately offered to go to the police station to deal with it, but the company declined. The allegations were shopped to journalists, including the Guardian, but proof was never forthcoming and articles did not appear.

Icac has said it is investigating Ellis, Greenwood and Charles Perrottet in relation to alleged attempts to remove Chandler and prevent him doing his duty.

One-off bad guys?

Geoffery Watson, a director of the Centre for Public Integrity, and counsel assisting Icac in its investigation of Obeid and the coal licence, says there will always be “one-off bad guys” and that some of them will gravitate into politics.

He suggests that there needs to be harsh penalties not just for politicians found to be corrupt but also for those who make illegal donations.

The Hills inquiry may also demonstrate that branch stacking is not simply an internal fight in the sandpit, but a far more insidious activity that corrodes support for mainstream parties.

One of the more intriguing aspects of the Hills inquiry will be: who knew what and when. Did senior figures in the Liberal party turn a blind eye to the activities of their party operatives? Where exactly did the donations go?

The consequences of looking the other way, if that’s what happened, will be felt by the Liberal party for years.