Cassandra Lawry, the former chief of staff for Liberal MP Eleni Petinos, faced a hearing by the NSW Independent Commission Against Corruption on Thursday.
ICAC is probing alleged illicit political donations and branch-stacking spearheaded by the Reformers - a conservative Christian faction among state Liberals.
Ms Lawry suspects herself and Ms Petinos were used to remove then building commissioner David Chandler, who was leading a widely publicised campaign against rogue players in the industry.
At the time, Ms Petinos was fair trading minister, which oversaw the Office of the Building Commissioner.
In 2022, Ms Lawry said she became aware of rumours Mr Chandler was taking money in brown paper bags and acting favourably towards certain builders or developers.
None of the rumours have been substantiated, the commission was told.
Ms Lawry said she was shown covert video of Mr Chandler on a worksite by another chief of staff Chris Spence.
Mr Spence became chief of staff to then-planning minister Anthony Roberts after resigning as a Liberal MP following a 2014 ICAC investigation.
Showing Ms Lawry the video, Mr Spence said words along the lines of "If you want to get rid of him this might help," Ms Lawry told the Commission.
Mr Spence also showed her text messages which he suggested were bank account details for Mr Chandler to receive kickbacks.
"When he's showing you these messages, he's alleging something pretty outrageous in terms of the building commissioner taking money," counsel assisting Peggy Dwyer said.
Ms Lawry said she was not initially concerned about what she was being shown, because she did not know if it was true.
On June 20, 2022, records showed a flurry of phone calls from Mr Spence trying to get hold of Ms Lawry and Ms Petinos.
The next day, Ms Lawry referred the video to ICAC.
"It's pretty clear, then, isn't it ... he was insistent to get hold of you to press you do something about Chandler?," Ms Dwyer asked.
Ms Lawry denied Mr Spence told her to refer the video to ICAC and said she did not consult with Ms Petinos before doing so.
However, Ms Lawry admitted afterwards she began to wonder whether Mr Spence had a motive for showing her the video and the text messages.
"Did you feel like you were being set up?" Ms Dwyer asked.
"I did," Ms Lawry said.
The video was subsequently leaked to a journalist at the Australian newspaper, which published the story, leading to the allegations against Mr Chandler becoming public.
"Did you start to think at that stage that this was part of a ploy to get rid of Mr Chandler that might but not be legitimate," Ms Dwyer asked.
"It was certainly a ploy to get rid of him," Ms Lawry replied.
Mr Chandler resigned in July 2022 after being cleared of the allegations of misconduct.
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