Labor MP Noreen Hay has stood down as Opposition Whip but has not been suspended from the ALP pending an Australian Federal Police investigation into allegations of electoral fraud and branch stacking at her Wollongong office.
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NSW Opposition Leader Luke Foley released a statement on Friday afternoon, indicating Ms Hay, a longtime ally of Eddie Obeid and Joe Tripodi during their time in Parliament, would remain a member of the party until any specific evidence against her came to light.
"I have today discussed with Member for Wollongong Noreen Hay an investigation into her office by the Australian Federal Police. During our discussion, Ms Hay offered to stand aside as Opposition Whip pending the outcome of the investigation," he said.
"I agreed that is the most appropriate course of action. I maintain that Ms Hay is entitled to due process. I understand Ms Hay has offered the AFP every assistance with the investigation, and continues to do so."
Fairfax Media understands Mr Foley had decided on this course of action before discussing the AFP matter with Ms Hay on Friday.
The AFP raided Ms Hay's Wollongong office during the week, taking documents believed to relate to a number of residential address changes ahead of a preselection vote before the state election.
Party bosses at Labor's Sussex Street headquarters discussed Ms Hay's future on Friday but decided not to act while it is still unclear whether the Wollongong MP is personally implicated.
The AFP received a referral from the Australian Electoral Commission on December 8, two days after Ms Hay was re-endorsed in a bitter contest.
Days earlier, The Sydney Morning Herald had exclusively revealed evidence of branch-stackingand apparent inaccuracies in the electoral roll details of some of her supporters in Wollongong.
An investigation uncovered electoral records which showed three of Ms Hay's supporters had all changed their listed residential address with the AEC to the home of Judita Matic, the secretary of the ALP Wollongong branch.
Danica Vangelovski, Cveta Davidovic and Aleksander Retkovic all updated their residential details on the same day, November 6, declaring they had left addresses in the neighbouring seat of Keira.
But Fairfax Media visited their former listed addresses and found Ms Vangelovski still living in the house she claimed to have moved out of three weeks earlier.
Ms Davidovic's neighbour also confirmed she was still living at her former address in West Wollongong, also outside the electorate.
A subsequent Fairfax Media report cast even more doubt on the sanctity of the preselection process, with evidence of doctored minutes and dodgy attendance books at a branch that Ms Hay counted on for numbers to survive the challenge from local academic Paul Scully.
The minutes of the April 7 meeting of the Labor Party's Mount Keira branch recorded a discussion about the resignation of NSW premier Barry O'Farrell.
That was eight days before Mr O'Farrell quit on April 15.
An independent internal party investigation found "manifest and repeated inconsistencies" in the attendance books and minutes of the Mount Keira branch and it was later declared "defunct" as a result.
The AFP and AEC have declined to comment.
