NSW Labor leader Luke Foley has asked for the resignation of controversial MP Noreen Hay after a senior staff member in her Wollongong electorate office was charged by Australian Federal Police in relation to allegations of electoral fraud.
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Fairfax Media can reveal Ms Hay is resisting the directive to quit her position as Opposition Whip and the matter is likely to have to be put to a vote of the NSW caucus on Wednesday.
Ms Hay, a former close ally of NSW Right powerbrokers Eddie Obeid and Joe Tripodi, was only reinstated as Whip less than a fortnight ago after assuring Mr Foley the AFP raid at her office in July last year would not lead to any charges against her.
Mr Foley is understood to be furious after the MP found herself again embroiled in scandal anyway after the AFP on Friday charged her staffer of nine years, Susan Greenhalgh.
In a statement, the AFP would say only that "a person is to appear before the Wollongong Local Court on 14 July, 2016" in relation to allegations of electoral fraud referred to it by the Australian Electoral Commission.
Ms Hay confirmed that person is Ms Greenhalgh and that the staff member has taken immediate leave from her office.
The AEC began investigating Ms Hay's office after Fairfax Media revealed in December 2014 that a number of Ms Hay's local ALP supporters had updated their addresses on the electoral roll days before a crunch pre-selection vote in Wollongong.
According to the roll, three people had moved into the home of Judita Matic, an ally of Ms Hay and secretary of the ALP Wollongong branch.
But Fairfax Media found them living at their previous addresses outside the Wollongong electorate and therefore ineligible to support Ms Hay in the pre-selection vote.
Mr Foley is understood to have given Ms Hay a number of chances to resign as Whip for the good of the Labor Party but the veteran MP refused.
"Labor Leader Luke Foley has sought the resignation of the Member for Wollongong from her position as Opposition Whip," his office said in a statement.
"While Ms Hay has given personal assurances she has no involvement in the alleged misconduct and stands by legal advice that she is not a person of interest in the Australian Federal Police investigation, her resignation from an office holder position of the parliament is appropriate and in the best interests of the NSW Labor Party.
"A meeting of the Labor Caucus will be scheduled as soon as possible to elect a new Whip before the next sitting day of the parliament."
Ms Hay told Fairfax Media: "As it stands today there is no allegations or charges against me by the AFP. I know I haven't done anything wrong."
ALP sources in Wollongong said Ms Hay believed offering her resignation would be tantamount to an admission of guilt in the alleged fraud.
Ms Greenhalgh said she had been advised by her lawyer not to comment.
Labor head office investigated a number of controversies around the Wollongong preselection, including allegations of branch stacking and doctored records.
Fairfax Media revealed that the minutes of the Mount Keira branch's April meeting noted that the branch had welcomed the resignation of Liberal premier Barry O'Farrell - eight days before Mr O'Farrell actually quit.
