Shane de Kauwe tells corruption inquiry he was instructed by Toplace laywer Sharangan Maheswaran to investigate minister David Elliott

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A private investigator says he was asked to surveil a Liberal minister and provided secret recording devices to a fugitive property developer, the New South Wales anti-corruption watchdog has heard.

Shane De Kauwe told the Independent Commission Against Corruption (Icac) on Tuesday he had installed a static camera on a building to record a person connected with the former NSW Liberal MP David Elliott.

On Tuesday afternoon, De Kauwe told the commission he and others made covert recordings of a Sydney mayor after hearing what he claimed was a “corrupt conversation” in a cafe, but he later worried the recordings were illegal.

Icac is investigating the allegation that Liberal figures Christian Ellis, Jeremy Greenwood and Charles Perrottet took $2m in illegal donations from property developer Jean Nassif or his company Toplace in exchange for political outcomes.

Greenwood and Perrottet have denied payments were for political outcomes, while Ellis has moved overseas and is not expected to give evidence. Nassif, in an explosive appearance from his Beirut bedroom, insisted he was “not corrupt”.

The alleged outcomes include damage to the political career of Elliott, who had opposed Toplace developments, and the removal of the former building commissioner, David Chandler, who was scrutinising defects in Toplace apartments.

On Tuesday, De Kauwe said he took instructions to surveil Elliott from the Toplace lawyer and executive Sharangan Maheswaran, who he understood to be negatively disposed to the MP.

“He didn’t like him,” said De Kauwe.

He said he was asked to investigate the unsubstantiated allegation that Elliott had previously breached Covid restrictions in 2020, including the identity of a woman he was alleged to have met with, which Maheswaran wanted to give to a journalist.

He said he surveilled Elliott, at that time the veterans minister, during his attendance at an Anzac Day parade, but “didn’t find anything”. “He went to the Anzac parade, appeared to me to be doing his job, and we lost him,” said De Kauwe.

In a fiery appearance at the commission, Elliott, who is not accused of any wrongdoing, described De Kauwe as the “Maxwell Smart of the NSW private investigator industry”.

De Kauwe admitted that he used a ladder to install a static camera in 2022 on a apartment building opposite a car park with a view to capturing the woman’s car, invoicing Toplace $15,000 . The presiding commissioner, Fabian Gleeson, asked: “You acknowledge you had no authority to install a static camera on the building where you did install it?”

“Correct, yes,” said De Kauwe.

De Kauwe detailed continued requests by Nassif to surveil Elliott, Chandler and the 2GB radio host Ray Hadley, even after the developer fled Australia for Lebanon in 2022. “He hated him [Chandler],” he said.

On Tuesday morning, De Kauwe said he had provided covert recording devices to Maheswaran, Nassif and Greenwood. He said the “two or three devices” provided to Maheswaran may have included voice recorder pens and a recording device he described as a “little square” which “looks like a tag you would drop on your keys” and was widely available online.

He said he had given Nassif a second recording device “because he couldn’t work the first one”, saying Nassif wanted to record a conversation with two men who were allegedly asking for $5m on Chandler’s behalf to provide occupancy certificates for Toplace’s developments.

De Kauwe, who said he thought the men were attempting to defraud Nassif rather than acting on Chandler’s behalf, told the commission he reported the allegations to a contact at NSW police.

The commission has heard they are unsubstantiated, and Chandler is not accused of any wrongdoing. On Monday afternoon, De Kauwe gave evidence that he did not hear about the April 2021 meeting until 2024, when he reported it to the police.

De Kauwe accepted he had invoiced Maheswaran for $13,400 to surveil Chandler over six days in 2021.

Icac is investigating whether Strathfield Labor councillors Maheswaran and Karen Pensabene engaged in conduct towards fellow councillor Matthew Blackmore including blackmail and possible breaches of the Surveillance Devices Act.

The commmission has heard that Blackmore had gone back on a deal with Maheswaran and Pensabene that he would resign as mayor to allow a Labor councillor to finish the term.

De Kauwe, a former Australian federal police officer, described Maheswaran as “one of my best friends”, saying the two became close after meeting in 2019.

He said that he was “fairly familiar” with the law governing the use of listening devices, but would often receive legal advice. Under questioning, the commission heard this included advice from Maheswaran in instances where Maheswaran was also the client.

Counsel assisting Juliet Curtin asked: “Do you not see that there’s a potential conflict there?”

“At the time, or even now, I trust him implicitly. I wouldn’t consider it a conflict.”

De Kauwe said Maheswaran had first asked him to surveil Blackmore in 2021. The private investigator, who is slightly deaf, alleged that while surveilling Blackmore and another councillor at a cafe in late 2022, his hearing aids picked up “a corrupt conversation around the hiding of payments”.

He did not record the conversation, but following legal advice obtained by Maheswaran that he could record a conversation he reasonably suspected was illegal, he and subcontracted “operatives” recorded several subsequent conversations between Blackmore and others, Icac heard.

Curtin read transcripts from the recordings, including one which referenced “eggs on toast” and “regular soy cap”, but which De Kauwe accepted was “largely inaudible”. Curtin suggested there was “nothing on here that would suggest corrupt conduct”.

De Kauwe contended that the “totality of the conversation” in which the other councillor referenced “shareholder”, “director” and “trust company” arrangements, “show[ed] a trend” which informed a report he was writing to provide to law enforcement.

“It was to give them enough evidence to see why they would put resources into this investigate into an investigation,” he said.

Blackmore, who is not named as a person of interest in Icac’s allegations and is not accused of any wrongdoing, resigned as Strathfield mayor in early 2023. Maheswaran wrote a message to De Kauwe saying the resignation had come after he told Blackmore he was being surveilled.

Asked if that message “raised red flags for you about Mr Maheswaran engaging in [alleged] blackmail or extortion,” De Kauwe said he “didn’t think about it at the time”.

“My brief was always to provide [the report] to police,” he said. The commission heard he reported allegations to the police in January 2023.

Icac heard he invoiced Toplace $134,000 for surveillance of Blackmore between November 2022 and January 2023. De Kauwe said he later worried that the recordings made of Blackmore were illegal.

“I think the law, even though we had that advice, I was getting advice that it might be a problem from another solicitor,” he said. “This was on my mind a lot.”

Maheswaran, who has denied any wrongdoing, is expected to continue giving evidence to the commission later this week. He is currently the final scheduled witness across nine weeks of public hearings.

Pensabene has been released from her summons to appear before the commission for medical reasons. The inquiry continues.