Michael Yabsley, the Liberal Party's former treasurer and corporate fundraiser, has admitted his knowledge of prohibited donations made to the party through the Free Enterprise Foundation (FEF).
The FEF, a Liberal Party fundraising body, was used by members of the NSW Liberal Party to re-channel donations made by forbidden donors.
This included those made by developers, which are banned from making political donations in NSW.
ABC's Four Corners program asked Yabsley if he knew prohibited donors were asked to give money to the Free Enterprise Foundation while he was in office.
I believe this is now crunch time
"In a couple of cases, yes. We're talking about property developers, owners of certain licensed premises," Yabsley said.
"I don't think it was a great secret about the fact that that was happening."
From 1999 to 2003, Yabsley was the Liberal Party's corporate fundraiser in NSW and was the party's chief fundraiser from 2008 to 2010.
He is now calling for the system to be overhauled and for political donations to be abolished unless the donor is on the electoral roll and the donation is less than $500.
"I believe this is now crunch time," Yabsley told Four Corners in an exclusive interview.
"You have the damage that has been done to the reputations of many, many individuals, to the reputations of many companies and the reputations of the major political parties."
Greens senator Lee Rhiannon has begun research into discrepancies in political donations.
According to his research, roughly $8 million has been given by donors that hasn't been declared as donations by the Liberal, National and Labor parties since 2011.
The Greens are launching their political donations reform initiative on Tuesday.
ICAC is expected to release its report on the issue as early as next month.