Chinese billionaire Huang Xiangmo gave a wine box full of $35,000 cash to then New South Wales Labor boss Jamie Clements to help him cover legal bills to fight allegations of sexual harassment, an inquiry has heard.

The explosive revelations were made during Clements’ evidence to the independent commission against corruption, which is investigating whether Huang, a banned donor, gave $100,000 cash to the Labor party.

In 2015, Clements was facing allegations he tried to kiss a 27-year-old Labor staffer in a parliament house office.

The inquiry heard that Huang, then chairman of a group linked to the Chinese Communist Party, invited Clements to his home in Mosman in August 2015. He took him upstairs to a room he had not previously been in.

He then gave Clements $35,000 in cash to help pay his legal bills for an apprehended violence order sought by the complainant in the sexual harassment matter, the inquiry heard.

The cash was in a wine box, stacked full of $100 notes.

“He had a wine box and he opened it, there was cash in it and he had a piece of paper hand written in English that said ‘for your legal fees’,” he said.

“He closed the box, screwed the piece of paper up and we walked down and had a cup of tea.”

Asked whether he was surprised at being given the money, Clements responded:

“Well he paid Sam [Dastyari’s] legal fees, so I suppose I wasn’t.”

Dastyari’s acceptance of money from Huang prompted a significant scandal, and his interactions with Huang eventually led to his political downfall.

Icac has now spent almost seven weeks investigating whether Huang gave Labor $100,000 cash in an Aldi shopping bag in 2015.

It has been alleged Huang’s donation was masked using a series of straw donors who falsely claimed to have given money during a 2015 state election fundraising dinner attended by then federal Labor leader, Bill Shorten, and his NSW counterpart, Luke Foley.

Clements told Icac that the first he heard about the $100,000 donation was in 2017. He said Ernest Wong, a Labor upper house member who helped organise the dinner, contacted him via WhatsApp in July 2017, arranging to meet at a Starbucks in Sydney.

“He said ‘there’s an electoral commission investigation going on into a Chinese Friends of Labor dinner from 2015’ and I remember thinking ‘oh yeah, so?’” Clements recalled. “I must have shrugged my shoulders.”

The inquiry heard that Wong informed Clements that his name had come up in the investigation, telling him Labor official Kenrick Cheah had alleged that Clements had received a bag full of cash from Huang and asked him to count it. Clements recalled his response upon hearing the news was: “Why the fuck would Kenrick say that?”

“I was just blown away. I’m sitting there thinking could this have happened and I’ve forgotten about it?”

Earlier, Clements told the commission he had delegated much of the responsibility for state campaign fundraising to his then assistant general secretary, Kaila Murnain.

The inquiry heard the pair had an acrimonious relationship.

“She hates my guts, I don’t know if I hate her,” Clements said.

Despite that, Clements said, Murnain was “highly capable” and he trusted her to handle fundraising without him micromanaging her or interfering unless a specific problem arose.

“I had the faith in her to get it done,” he said.

That prompted allegations from counsel assisting the inquiry, Scott Robertson, that Clements was minimising his role in fundraising because he knew it was the subject of the Icac investigation.

“You are deliberately seeking to distance yourself from fundraising matters because you know they are of interest to this commission,” Robertson said.

Clements replied: “No, I am answering questions honestly.”

On Tuesday, the commission heard evidence that Clements had worked for Huang after resigning from the NSW Labor party in 2016.

A former employee of Huang, Tim Xu, said Clements had been paid a retainer of about $200,000 to “offer him advice on building relationship with government or politicians”. The retainer was paid in roughly $10,000 monthly instalments, Xu said.

“To my memory Mr Clements expressed his needs and Mr Huang agreed to, to help him out financially and, and take his service.”

At the hearing on Wednesday, Clements put the amount at $4,000 a week.

He said he helped Huang with tasks as they arose. Clements said he helped Huang settle a strike at a Gold Coast property development, for example. He said he also helped him strategise to deal with bad press.

Clements told the inquiry that the arrangement eventually ceased when Huang had his permanent residency denied in 2019.

“He was worried that Asio or whoever it was that was cracking down, were going to target Yuhu,” Clements said.

The commission heard that Clements used a suite belonging to Huang to run the consultancy, and paid no rent to Huang.

The office was also on the same floor as the Australian Council for the Promotion of the Peaceful Reunification of China, which Icac heard was a front organisation for the Chinese Communist party.

Huang has denied making the $100,00 donation but has refused to appear at Icac, despite repeated invitations.

Huang, one of Australia’s biggest political donors, was blocked from re-entering Australia earlier this year. He was previously a chairman of the reunification council.

The inquiry has already claimed the scalp of Murnain, who succeeded Clements as general secretary in 2016. Murnain resigned in August after conceding she had become aware of Huang’s donation in 2016, but repeatedly failed to act.

Murnain said she had sought advice from the party’s lawyer, who allegedly told her to keep quiet about the donation.

The inquiry continues before chief commissioner Peter Hall. At the cessation of Wednesday’s hearing, Clements handed over a series of text messages, including an exchange between him and a senior member of Shorten’s staff.