Former NSW premier Mike Baird has told the state's corruption watchdog he was "incredulous" when he learned disgraced former MP Daryl Maguire and his successor Gladys Berejiklian were in a relationship.
The Independent Commission Against Corruption is investigating whether Ms Berejiklian breached public trust by not disclosing the relationship and whether she "was liable to allow or encourage" Mr Maguire's conduct in securing grant funding.
"I think it should have been disclosed," Mr Baird said of the secret relationship.
He said he thought the "potential conflict of interest" could have been managed had he known about it.
Some $5.5 million was set aside for the Australian Clay Target Association in Wagga Wagga in Mr Maguire's electorate after a meeting of cabinet's Expenditure Review Committee, which Ms Berejiklian chaired, in December 2016.
Mr Baird said he supported the project but that he thought a stronger business case needed to be developed to support the proposal.
"I put my concerns and what I thought was needed and that was endorsed by the [expenditure review] committee," Mr Baird said.
He said Mr Maguire was someone would "relentlessly pursue his own agenda".
Nigel Blunden, the former director of strategy to Mr Baird, was asked by ICAC earlier on Wednesday about emails in which he was derisive about the project.
In a memo Mr Blunden described it as the ""Maguire international shooting centre of excellence" and wrote: "As Joel Goodson [Tom Cruise's character in the film Risky Business] would say, sometimes you gotta say WTF."
Mr Blunden agreed on Wednesday that he said it in jest.
Disgraced former NSW MP Daryl Maguire. Source: AAP
The memo said "Gladys and Ayres want it", referring to Ms Berejiklian and then-sports minister Stuart Ayres.
It details that it was suggested they should "go away, test the assumptions, verify the business case and then come back when it's solid". It then notes the proposal was taken off the agenda, "but Daryl fired up and Gladys put it back on".
Mr Blunden told the ICAC Mr Maguire "had every right to advocate" for funding, but his own "overwhelming concern" was about the urgency while there was not a rigorous business case.
"It was just a case of is this really the most appropriate expenditure of $5.5 million of taxpayers' money?" Mr Blunden told the commission.
Counsel assisting the ICAC, Scott Robertson responded: "To summarise, WTF."
When asked why in his emails he said Ms Berejiklian "wants it", Mr Blunden said he was referring to the fact the then-treasurer wanted it back on the agenda.
Former NSW premier Gladys Berejiklian. Source: AAP
The inquiry prompted Ms Berejiklian's resignation earlier this month, and she has denied any wrongdoing.
Two senior public servants who worked at the Office of Sport testified earlier this week that there were concerns or questions raised by Mr Baird's office in 2016 about the grant.
Paul Doorn, a former executive director in the state's Office of Sport said there was "a lot of push" from Mr Maguire to get funding, and if he'd known the then treasurer was in a close personal relationship with him it would have been a "red flag".
The next witness ICAC will call on is Chris Hanger, a deputy secretary in the Department of Regional NSW.
