The NSW Independent Commission Against Corruption is investigating alleged illicit political donations and branch-stacking, spearheaded by the Reformers, a conservative Christian faction among state Liberals.
Retired businessman Frits Mare told the commission on Tuesday he met with two Reformers members, Christian Ellis and John-Claude Perrottet, the latter the brother of former NSW premier Dominic Perrottet.
During the May 2020 meeting, the men said they needed $50,000 to set up a call centre to recruit "like-minded" people to the party.
Mr Ellis said the aim was to get enough support to vote out then-federal Mitchell MP Alex Hawke in a process called branch-stacking, according to Mr Mare.
"Ellis said they wanted to get enough people to challenge Alex Hawke in his seat and then vote him out," Mr Mare said.
The former businessman said he found the prospect strange as he believed Mr Hawke was doing a good job.
"They asked would I be interested in funding it. I said no," he said.
Mr Mare, who is not accused of any wrongdoing, aired the same claims during a 2023 parliamentary inquiry into alleged branch-stacking.
Senior state Liberal MP Damien Tudehope is due to give evidence to the inquiry later on Tuesday.
Prior to the latest round of hearings, Mr Tudehope stood aside from his roles as shadow attorney-general and opposition youth justice spokesman.
While he has not been accused of any wrongdoing, the former frontbencher said in an earlier statement he feared his involvement in the inquiry would constitute a distraction in the lead-up to March's state election.
The commission is investigating allegations the Reformers solicited or accepted money from prohibited donors using sham contracts to assist their factional mission.
A focus of the operation is alleged links between fugitive property developer Jean Nassif, who is wanted over fraud allegations, and Liberal Party members..
On Monday, Reformers co-founder Robert Assaf said colleagues aligned their messaging before facing the anti-corruption body, admitting he and another subject discussed potential vulnerabilities.
Mr Assaf also said former allies branded him a "rat" after he expressed a willingness to co-operate with an earlier parliamentary inquiry.
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