For all that is said about Dallas McInerney – and a lot is said from both haters and boosters – nobody has ever called him an idiot. In his dual roles as Catholic Schools NSW chief executive and Liberal Party powerbroker, McInerney has proved a formidable, ruthless and highly intelligent tactician.

What the state’s corruption watchdog is wondering, though, is whether he has been too clever by half. At its simplest, the Independent Commission Against Corruption believes he has abused his position at Catholic Schools NSW and potentially broken donation laws by directing hundreds of thousands of dollars towards a conservative Christian branch-stacking operation. The schools body was also a cushy landing pad for political mates who needed jobs.

By mixing business with political pleasure he has found himself in the spotlight, rather than the shadows where he prefers to operate. McInerney’s appearance before the ICAC is a body blow for a man who has had more influence over the education of millions of Catholic school students than any other person for a decade.

McInerney will return to the witness box on Wednesday for a fresh set of questions. His two days of evidence last week featured plenty of embarrassing moments and curiously vague answers. But the ICAC is yet to produce a smoking gun that definitively proves he orchestrated or knew of the scheme. Based on what we know, prosecutors may be far from convinced that this is a slam-dunk case of electoral fraud.

McInerney’s detractors would have to admit he has been an equal match for, if not outgunned by, senior counsel assisting Juliet Curtin. “We have a very intelligent witness in the box,” Commissioner Fabian Gleeson, SC, noted at one point on Friday.

Even if he avoids an adverse finding in the ICAC’s final report, it’s unlikely McInerney will return to Catholic Schools NSW. He is now radioactive to his friend and supporter Archbishop Anthony Fisher, and the church would probably be looking for a Labor-aligned figure to take over, given the party seems entrenched at a state and federal level.

The former National Australia Bank executive’s uninterrupted run of power in politics and education came to an abrupt halt earlier this year when he was summonsed to attend a compulsory private examination at the ICAC’s Elizabeth Street headquarters on June 16. Operation Rosny was publicly announced two weeks later. The inquiry had been an open secret within Macquarie Street but many were surprised – if perhaps not shocked – to see McInerney as a key person of interest.

The ICAC alleges up to $265,000 in schools funding was diverted to two companies: Beckington and JPG Advisory. Beckington was run by Christian Ellis, a key figure behind a conservative Liberal Party sub-faction named the Reformers. The other partner in the business was lobbyist and former political staffer Jeremy Greenwood. The ICAC says Beckington and, later, JPG did little or no work for Catholic Schools NSW, and the monthly retainers and sign-on fees were instead used to prop up the work of the Reformers via kickbacks and direct payments.

The Reformers had big plans to recruit 5000 members to take over left-wing branches and influence preselections in favour of conservative candidates. McInerney was a strong supporter of the cause, and knew all of the Reformers personally, but now observes they were “spectacularly unsuccessful in their ambitions”. Their presence before the ICAC this month is a case in point.

The ICAC argues funding for the group between 2019 and 2023 ultimately benefited the Liberal Party and therefore constitutes a political donation. McInerney has repeatedly denied knowledge of such a scheme. But the ICAC has good grounds to be suspicious.

Ellis and Greenwood first approached McInerney in April 2019 about securing a contract with Catholic Schools NSW, even though at that point their company Beckington hadn’t been registered. In one email, as the pair refined their proposal, Greenwood wrote under the company biography subhead: “PLEASE BULLSHIT THE BIO.”

Over the following weeks McInerney repeatedly helped Ellis refine his pitch, including by noting that the firm’s pitch document should include an ABN and post office box. Curtin said McInerney “went out of his way” to help Ellis secure the contract because they were both aligned to the Liberal Party’s right faction. They were, in essence, pushing on an open door.

McInerney says he spent months on “due diligence” before locking in Beckington on a $600 monthly retainer and $10,000 sign-on fee. He called the then-treasurer Dominic Perrottet to make sure Ellis and Greenwood “would have the respect and entree into the government”.

But he did not call Ellis’ former employer, Liberal MP Damien Tudehope, who had recently sacked the operative from his office for branch stacking while working in a taxpayer-funded role. Curtin put it to McInerney that this would have been a “salient detail, would it not?” when determining whether Ellis was a proper person to do business with.

It also emerged that when McInerney asked Ellis to provide an ABN for his company, Ellis instead provided one registered to his sister, Dr Samantha Ellis. “Can I suggest to you that the due diligence that was conducted between April and August wasn’t particularly effective?” Curtin said.

With McInerney’s contract locked up in mid-2019, Beckington saw a business model worthy of expansion beyond state borders. Catholic schools were again identified by the apparatchiks as a potentially lucrative source.

At 5.07pm on July 1, 2019, Greenwood emailed Ellis a “Plan of Action”. The document included the following statement: “Our main goal would be targeting contacts the same way we did with Dallas, conservatives who are willing to dip into their government relations budgets to help with our cause.”

Greenwood then wrote of an idea to secure the National Catholic Education Commission – the national body for Catholic schools – as a client. “This is one that I think we have a reasonable chance of securing reasonably soon with the assistance of Dallas,” Greenwood said, noting it could put their business “in play at a federal level”.

“If we can pressure Dallas for a meeting we can definitely secure them.”

A spokeswoman for the National Catholic Education Commission told the Herald that Beckington had approached it in September 2019 but the organisation received no formal proposal.

Like the Reformers, McInerney had federal ambitions of his own via a deal to replace Jim Molan in the Senate when the retired major general stepped down mid-term. But Molan died in January 2023 following a battle with prostate cancer, and the plan fell apart in the resulting tussle to take the seat.

“I know I’ve been f---ed,” McInerney complained via text message to Greenwood in March 2023. “It’s f---ed. It’s f---ed. It’s f---ed.”

Greenwood suggested hatching a plan for McInerney to eventually replace Marise Payne, a leading moderate and former foreign affairs minister who would retire in September that year. That spot ultimately went to Dave Sharma, who lost his Sydney seat of Wentworth to teal independent Allegra Spender in 2022.

When Catholic Schools NSW wound up its contract with Beckington in 2021 it signed a new deal with JPG Advisory. This time Greenwood was the sole director of the new firm, as Ellis had moved to Deniliquin in an attempt to topple Liberal minister Sussan Ley in her federal seat of Farrer and was starting to get noses out of joint in the party. McInerney was happy to have some distance.

Much if not all of the Catholic Schools money that was then paid to JPG flowed to Reformers Rob Assaf and Jean-Claude Perrottet.

Jean-Claude, the younger brother of Dominic Perrottet, would later go to work for McInerney at Catholic Schools NSW after he was sacked from his job at Medallion Financial. The financial firm punted Jean-Claude Perrottet over his efforts to avoid being served a summons to appear before a parliamentary inquiry into branch stacking. He ended up hiding out in Fiji to avoid process servers. The ICAC says Jean-Claude Perrottet sent McInerney his CV while kicking back on the islands.

For most, all this would be a red flag. For McInerney, it didn’t seem to be any problem at all. The Catholic schools boss hired Jean-Claude Perrottet on a base salary of $165,000.

Jean-Claude Perrottet would be one of many Liberal Party figures to find work at Catholic Schools NSW. Of the four core members of the Reformers, three – Jean-Claude Perrottet, Rob Assaf and Dylan Whitelaw – worked for McInerney. Whitelaw, who was active in McInerney’s local Liberal Party branch, was hired straight out of school, no application or interview required.

James Tudehope, the son of Liberal MP and Reformers supporter Damien Tudehope, also worked there. McInerney bristled last week at questions over his suitability for the role. “He was a talent,” McInerney said.

He also suggested James Tudehope and others were aligned to the ideological positions of Catholic Schools NSW. “And in some respects that is just as important, could be more so than relying on credentialism, qualifications or degree,” he said. “In our type of enterprise, if you don’t have that mission alignment you could be a brilliant technician but you won’t succeed.”

But as the political spotlight intensified, the Reformers/Catholic schools axis began to dissolve. James Tudehope later left the organisation. He is currently in New Zealand and has refused to help the ICAC.

Jean-Claude Perrottet was made redundant just weeks before Operation Rosny’s public hearings began, despite being promoted a month earlier. McInerney said there was nothing to see here. The departure, he explained with a straight face, was simply down to a corporate restructure.

For a decade McInerney has thrived by out-thinking many in the Liberal Party and Catholic Church. He must now convince the ICAC that his entanglement in the biggest corruption inquiry for years is nothing more than an innocent case of bad luck.

Further reading

• How key ICAC witness Dallas McInerney turned from helpful to hot under the collar
• Jeremy Greenwood suffered amnesia to rival Alan Bond, writes Kate McClymont
• Jeremy Greenwood was asked not to discuss his preliminary ICAC examination. Then he met Jean-Claude Perrottet at a Double Bay pub
• How the NSW Reformers infiltrated the Liberal Party