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The commission has also withheld $4.38m in electoral funding until the party discloses the identity of the FEF donors.
As far as breaches of electoral funding laws are concerned, NSW Liberal senator Bill Heffernan proposed another remedy.
"This inquiry will expose the systematic subversion of the electoral funding laws of NSW," Watson, told Icac as the Operation Spicer hearings began.
The AEC valued each first preference vote at $2.49 and paid out a total of $58.1m in electoral funding to 12 political parties and nine independents.
The Australian Electoral Commission has doled out a total of $62.8m in public electoral funding, including $50.7m to Labor and the Coalition.
The NSW premier, Mike Baird, said in March the party had done "the wrong thing" after the state's electoral commission ruled the donations had breached electoral funding laws.
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To reduce the size of secret electoral funds, it limited authorized expenditures during election periods.
They contribute on a stupendous scale to the electoral funds of US politicians.
To replace corporate donations, last fall Congress created a new electoral fund.
So far the BBC has discovered £37k in secret payments in to Mr Mackintosh's electoral fund from the company into which the bulk of the missing money disappeared.
The Hain investigation is particularly embarrassing because it will be the third high-profile police investigation into alleged Labour breaches of electoral and funding law.
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