Christmas came early for political voyeurs yesterday when the NSW Independent Commission Against Corruption opened an inquiry into whether a former Labor minister had accepted s-xual services in return for introducing millionaire property developer Ron Medich to the heads of state-owned energy companies.

As counsel assisting the inquiry, Geoffrey Watson SC, delivered the opening address, a packed gallery heard details about a dinner in July 2009 attended by Ian McDonald, the former minister for energy, two executives from Country Energy, and Medich. During the dinner, the developer and an associate mounted a sales pitch to the two bureaucrats on behalf of Medich’s electrical supply group, Rivercorp.

Medich is one of five men charged with the murder of Sydney businessman Michael McGurk.

After dinner McDonald selected a woman from a group of young Asian women and older Caucasian men sitting at another table. “Tiffanie” was then driven to the luxurious Four Seasons Hotel in the city to a room paid for by Medich. The businessman then drove the minister to the hotel and gave him the key.

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According to Watson: “There will be direct evidence about what went on in the room and it is pretty squalid stuff. There was some kissing and fondling, but no s-xual int-rcourse.”

McDonald’s evidence will be that the meeting with Tiffanie (sans breakfast) was entirely innocent, Watson said.

“He says that during the evening at the Tuscany restaurant he had noticed some neck tightness, and simply attended a remedial massage organised by Medich … The evidence will show that (Medich associate Lucky) Gattellari paid $400 for the hotel room and more again for the services of the ‘masseuse’ — and that McDonald did not repay that money,” he said.

The overwhelming feeling in the public gallery yesterday was schadenfreude. McDonald, 62, has been a ticking time-bomb for the NSW ALP for years; his snouts-in-the-trough attitude emblematic of the sort of behaviour that delivered a massive thrashing to Labor at the last state election.

“Sir Lunchalot” first came to the adverse attention of the public in July 2009 when it was revealed that as minister for primary industries, he had spent nearly $150,000 on lunches, dinners and accommodation for a wine advisory group he created, and $15,000 on a charter flight.

In 2010 he was shown to have received about $30,000 in airline upgrades on Emirates for himself, his wife and two friends after he had made decisions benefiting the airline’s owner and other members of the horse-breeding industry. He subsequently resigned from parliament, but has retained generous superannuation entitlements.

Yesterday, Country Energy’s Craig Murray and Bill Frewen gave evidence about the night. Neither is accused of any wrong-doing and are both witnesses only to the behaviour of McDonald.

Frewen said that when Medich had approached the table, McDonald had said words to the effect of “there’s someone I would like you to meet, he’s a good guy”. Following Medich’s sales pitch, the two executives felt that they had been placed in an “uncomfortable” situation and that the minister’s behaviour had been “inappropriate”, he said.

When the bill arrived, Frewen had been shocked to see that it was $811, largely because McDonald had ordered four $130 bottles of Tasmanian pinot noir from the Freycinet Peninsula. He said that McDonald had indicated that Medich would pay it but the two executives insisted on picking up the bill because of government guidelines about probity.

In the end, it was all a waste of everyone’s time. Rivercorp never did tender for any work and has since collapsed with debts of $28 million.

Murray said that the next day he had rung the chairman of Country Energy and told him that he thought the minister’s behaviour had been “inappropriate”.

After dinner, Frewen and Murray had shared a taxi home. In it, they “discussed the need to make sure that this organisation, Rivercorp, only do business with Country Energy through the usual and  proper processes”, Frewen said.

“It’s silly for somebody to have promoted Rivercorp in this sort of way because it’s counter-productive, it’s because of meeting those people from Rivercorp their business would be subjected to closer than usual scrutiny,” he said.

Earlier, there was evidence that Medich, indicating the table of young women, had quipped, “if you are nice to them, they will be nice to you”. And isn’t that the basis of every government scandal down the ages? And exactly how nice was Tiffanie to the minister? (Who does, incidentally, have a very thick neck.) We may soon find out.