The Independent Commission Against Corruption left an unexploded political bomb on the doorstep of federal Opposition Leader Angus Taylor this week. He had the chance to defuse it, but curiously did not immediately take it.

The corruption watchdog’s examination of an attempted takeover of the NSW Liberal Party by right-wing powerbrokers was always going to pose a risk to those close to the key players.

While Dominic Perrottet has not been accused of any wrongdoing, the fact that two of his brothers are being investigated by the ICAC creates potential for the former premier to be inadvertently caught up in the fallout. The alleged behaviour of some others in the ICAC’s sights could also cause headaches for serving state Liberal MPs.

Taylor’s kryptonite is the former chief executive of Catholic Schools NSW Dallas McInerney. McInerney wielded huge influence as the leader of the right-wing faction of the NSW Liberals and was intimately involved in a plot by an ultra-conservative group known as the Reformers to take over branches across the state.

ICAC alleges the Reformers may have used illegal and undeclared donations to carry out the scheme over the course of five years. One focus of the ICAC’s investigation is whether McInerney used Catholic Schools NSW funds and resources to funnel money to the Reformers.

McInerney and Taylor are longtime friends and factional allies; McInerney has helped him run election campaigns and supported the Rhodes scholar’s elevation as opposition leader this year.

On Tuesday, the ICAC heard bombshell claims Taylor agreed to help bankroll the Reformers and their work with a $15,000 “injection” and regular $3000 donations.

The claims were contained in a text message a member of the Reformers, Dylan Whitelaw, sent to a group of allies in 2021. In that message, he claimed McInerney had received the commitment from Taylor.

In another message, McInerney himself said to a Reformers member he planned to “shake down” Taylor for $10,000 at a breakfast meeting.

Whitelaw claimed he did not recall Taylor making the donation and said he would be surprised if the opposition leader did. However, much of his evidence at ICAC this week has been contradictory or hazy, so the doubt he cast over Taylor’s involvement might be taken with a grain of salt.

The onus is on Taylor to clear up this mess. Asked about the claims on Tuesday, a spokesperson for Taylor hedged in a carefully worded statement in which they declared he would not provide a running commentary on ICAC’s inquiry and said donations were a matter for the party organisation.

The Liberal Party says it has no record of a donation from Taylor. Publicly available donation registers also shed no further light. That means either Taylor did not pay, and therefore has nothing to declare, or did provide some kind of financial assistance but did not declare it.

Any contribution to the Reformers is significant because the ICAC argues it may represent a donation or gift which must be disclosed, or which may exceed caps of $6100.

On Wednesday, Taylor finally told reporters at a press conference in Queensland that “no payment was made”. He used the term payment repeatedly. Asked if he disputed the text messages aired at the inquiry, he replied: “I’ve said that no payment was made.” He also noted he is not a party to proceedings.

But he did not answer whether he was aware of the Reformers, or knew they were aiming to stack Liberal branches. He also did not answer whether he had ever been asked to give money.

If Taylor had hoped his “no payments” denial would draw an end to the matter, he may be disappointed.

Only a couple of hours after he made that statement to reporters, ICAC counsel assisting Juliet Curtin asked Whitelaw whether there was any connection between the $3000 monthly payments Taylor supposedly offered to provide, and a “corresponding increase” of $3000 in the amount of money that Catholic Schools NSW was paying a firm named Beckington.

Beckington was a lobbying company owned and run by members of the Reformers, and was paid $131,000 by the schools body over two years.

Whitelaw replied: “No, I wouldn’t be able to talk to that.” It was a curious line of questioning which suggests the ICAC is not done exploring the matter.

Critics of the ICAC argue the watchdog’s public hearings allow people who have done nothing wrong to be unfairly dragged into the mess. There is occasional validity to that view. But Taylor is the federal Opposition Leader and must expect to be held to the highest of standards. His conduct – ven if it is only alleged at this point – is in the public interest.

Taylor and his allies have rightly demanded answers from Labor over Prime Minister Anthony Albanese’s controversial attendance at a shadowy invite-only event in Point Piper in Sydney last week.

But when asked questions about whether Taylor may have given financial support to a group being investigated by the NSW corruption watchdog, they seem less enthusiastic about full transparency.

The truth is all sides of politics push the boundaries on fundraising techniques and donations laws. The question before the ICAC is whether that line was crossed, and by whom.

McInerney will give evidence before the ICAC in coming weeks and he will almost certainly be asked about the Taylor matter. McInerney is still close to the opposition leader and would have no desire to harm him, even if he had the chance.

A lesson from previous inquiries is that there can often be collateral damage. Who knows what ICAC may yet uncover. The bomb is unexploded, but remains highly dangerous.

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