A SENIOR NSW bureaucrat warned Arthur Sinodinos about his new business bedfellows after the Liberal senator became chairman of a company with alleged links to the Obeid family.
The Independent Commission Against Corruption (ICAC) is probing claims infrastructure company Australian Water Holdings (AWH) charged state-owned Sydney Water for limousine rides and Liberal Party donations.
It has also been alleged the family of corrupt former Labor minister Eddie Obeid had a secret 30 per cent holding in AWH.
Shortly after Senator Sinodinos was made chairman of the company, the ICAC heard on Monday, he met with former Sydney Water managing director Kerry Schott and another public servant.
"We suggested to Mr Sinodinos he might be careful about the company he was keeping," Dr Schott said.
"We thought that they may be dishonest ... There was no reaction to that."
She says she also raised concerns with Mr Sinodinos about ballooning expenses at AWH.
Counsel assisting, Geoffrey Watson, has told the inquiry that Senator Sinodinos, who is due to give evidence to the ICAC next week, was paid $200,000 plus bonuses for "a couple of weeks' work" for serving as an AWH director.
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