The younger brother of a former Liberal premier has told an anti-corruption watchdog that a group of young conservative power brokers, now under investigation for soliciting illegal donations, recruited members to “dodgy” branches controlled by rival factions, and admitted he personally paid for memberships.

Jean-Claude Perrottet, the younger brother of the ex-New South Wales premier Dominic Perrottet, appeared before the Independent Commission Against Corruption on Wednesday.

Icac is investigating whether members of the so-called Reformers, including Jean-Claude Perrottet, solicited or accepted illegal donations for the recruitment or renewal of members to the Liberal party. That practice, known as branch stacking, is not illegal.

The inquiry has heard that Jean-Claude Perrottet, 29, was among the Reformers who avoided summons to appear at a parliamentary inquiry which preceded Icac’s Operation Rosny.

The NSW shadow attorney general, Damien Tudehope, claimed on Tuesday that he had discussed with Dominic Perrottet that Jean-Claude Perrottet was in Fiji during the 2023 inquiry.

The state Liberal leader, Kellie Sloane, on Wednesday said she would reserve any decision about Tudehope’s future until the end of Icac’s inquiry after he admitted to leaking a confidential draft report from the parliamentary inquiry to another Reformer, Jeremy Greenwood, in February 2023.

“Damien cooperated with the inquiry,” Sloane told reporters.

“He was thanked by the inquiry and he was released from his summons. The leaking of a report is never good. It’s a standard that I don’t accept.

“I spoke to Damien about that … but the status remains that Damien is not in my shadow cabinet for the remainder of these hearings – and that’s appropriate.”

Sloane said she would “make a consideration once Icac proceedings have finalised”.

The Liberal leader in the upper house, Tudehope, who is not named in the Icac allegations, has stepped aside from his shadow cabinet roles during the inquiry.

Tudehope, who employed Jean-Claude Perrottet as a staffer in his electoral and ministerial offices in 2018 and 2019, told Icac on Tuesday that Jean-Claude had a “talent” for recruiting and renewing members to the party, which he said was essential for any Liberal member looking to keep hold of their seat at preselection.

Under questioning from the counsel assisting, Juliet Curtin, Jean-Claude Perrottet admitted to doing factional work during his office hours while employed in Tudehope’s electoral office.

He was read text messages to fellow Reformer Christian Ellis in which he wrote “these cunts have gone soft” and that MPs were “getting scared about Icac”, followed by a message in which he wrote “Scott and Damien are afraid”, a reference to Scott Gumley, the former head of Tudehope’s electoral office and to Tudehope.

Jean-Claude Perrottet said he could not recall sending the messages.

On Tuesday, Tudehope said he did not recall raising concerns or being aware that Jean-Claude Perrottet may have been using his hours as an electorate officer to recruit Liberal members, although it may have “potentially arisen”.

On Wednesday afternoon, Jean-Claude Perrottet admitted to personally paying for memberships, which the inquiry has heard is against Liberal party rules, at times when he was “pressured to deliver”, but said this was “an infrequent occurrence”.

He laughed when he was read one message in which Greenwood wrote to Ellis: “Mate, Claude either needs a Valium or a break from the faction work to rest.”

Curtin asked: “Are you laughing because it’s true – you did need a break or a Valium at this point from faction work – or just at the expression that Mr Greenwood uses?”

“I don’t know whether in that moment I needed a break … it’s just the turn of phrase, I guess,” he replied.

Jean-Claude Perrottet joined the Liberal party in 2015 and in 2018 became a member of the conservative right faction group the Reformers, founded by Ellis and Robert Assaf.

The Reformers wanted more conservative policies on same-sex marriage, abortion and euthanasia. Jean-Claude Perrottet admitted the group wanted to recruit “like-minded people” to the party, partly to influence preselections.

Asked about a message in which Ellis wrote “Two people happy to go into dodgy Branch”, he admitted the group signed up members with a view to putting them in branches not controlled by the right faction.

“I think that [Ellis] is suggesting to put someone into a branch that’s not the rightwing branch,” Jean-Claude Perrottet said on Wednesday.

Icac heard evidence from the businessman Frits Maré on Tuesday about a 2020 meeting in which Jean-Claude Perrottet and Ellis asked him to contribute $50,000 to an operation to unseat the federal MP for Mitchell, Alex Hawke, who is in the centre-right faction.

The inquiry heard messages between the Reformers about members they were signing up. In one message, Jean-Claude Perrottet wrote: “Some are Asian, Korean, and rest Wog.”

Curtin asked: “So … you’re describing the people who signed up, yes?”

“Yep,” Jean-Claude Perrottet replied.

In another message, Assaf wrote that another member signed up by the group was not renewing their membership. “She is a nun,” Assaf wrote. “Only problem Reformers sign up would ever have.”

The inquiry heard evidence from text messages in May 2020 that Greenwood talked to Jean-Claude Perrottet about paying a recently graduated year 12 pupil at Redfield college, the independent Catholic school attended by the Perrottets and Assaf, $2,000 to sign up 50 new members.

Greenwood wrote to Ellis that “If he [the pupil] gets that done, we’d get him a day a week in an office, or we’d pay him a day a week”, but Jean-Claude Perrottet said he could not recall receiving instructions from Greenwood.

Like Assaf, and the Reformers associate Dylan Whitelaw, Jean-Claude Perrottet had been employed by Catholic Schools NSW. Icac is investigating donations allegedly arranged and approved by the Catholic Schools NSW chief executive, Dallas McInerney, to the Reformers.

The inquiry heard on Wednesday that although Jean-Claude Perrottet was promoted to head of communications in May this year, he was made redundant by Catholic Schools NSW in June, weeks before the Icac hearings started.

He said McInerney, who has stepped aside from his role during the inquiry, told him the decision was because of office changes. When Curtin put to Jean-Claude Perrottet that he had been made redundant because of the inquiry, he replied: “Obviously, I’ve thought about the timing of it.”

Dominic Perrottet is not accused of wrongdoing, while Jean-Claude Perrottet has denied wrongdoing.