Former Victorian government minister Adem Somyurek has denied misappropriating public funds, telling an anti-corruption inquiry his use of taxpayer-funded staff for political purposes fell into a "grey area".
Mr Somyurek quit the Labor Party last year before he was expelled following a Nine Network investigation, which revealed he had enlisted the help of electoral and ministerial staff to run a branch-stacking operation.
Branch stacking involves recruiting, and usually paying for, new members to a political party and it is done to boost a faction's influence and ensure its preferred candidates are preselected.
It is not illegal but it is against Labor Party rules to pay for others' memberships.
An Independent Broad-based Anti-corruption Commission inquiry, led by Commissioner Robert Redlich, is investigating whether taxpayer funds were used for such work.
Asked by Mr Redlich on Friday if he had misappropriated public funds by enlisting the help of taxpayer-funded staff, Mr Somyurek said there were "grey areas".
"You consider that members of parliament have some latitude in being able to engage their electoral staff or ministerial staff in party political factional work?" Mr Redlich asked.
"Yes," Mr Somyurek replied, later adding his view was commonly held among politicians.
A phone conversation between Mr Somyurek and Tarneit MP Sarah Connolly was then played to the inquiry, during which she told him not to worry about the Nine expose if it was focused on branch stacking.
"Like the party just shrugged its shoulders at that," Ms Connolly said in the call.
In another taped conversation, Preston MP Robin Scott describes the expose as "pretty lame" and Mr Somyurek is heard laughing in response.
"If you are going to say there are good guys and bad guys in the Labor Party based on this stuff there are no good guys in the Labor Party," Mr Somyurek told the inquiry.
Mr Redlich suggested legislative reforms would be required to ban factional activity during work hours.
After the red shirts scandal, which involved the misuse of parliamentary allowances to pay Labor's political campaign staff before the 2014 election, the government banned electorate officers engaging in campaigning during work hours.
But the new rules didn't ban factional work outside of elections.
Mr Redlich said several of Mr Somyurek's former staffers have told IBAC they were doing a significant amount of factional work during working hours and there was "very little in the way of electoral duties being performed".
Mr Somyurek denied this.
He also confirmed he would not be recontesting his upper house seat at the next election.
It is his fourth and final day giving evidence to the inquiry, dubbed Operation Watts, which is jointly being run by the Victorian Ombudsman.
Earlier this week, Mr Somyurek said branch stacking is "so deeply embedded in the culture that it would be hard for people outside of the system to understand how embedded it is".
He also accused Victorian Premier Daniel Andrews of dismissing concerns over Labor's red shirts scandal.
