A second Turnbull government frontbencher has been caught up in the political donations row dogging the NSW Liberals over a finding that senior party officials used a controversial body to channel prohibited donations into its 2011 state election campaign.

Liberal rising star and Assistant Minister for Cities Angus Taylor discussed use of the controversial Free Enterprise Foundation with a former key Liberal fundraiser, Paul Nicolaou, and solicited a donation from a mining company to the organisation.

Assistant Minister for Cities Angus Taylor discussed use of the controversial Free Enterprise Foundation with a former key Liberal fundraiser. Credit:Roma Dickins

The revelation comes after cabinet secretary Senator Arthur Sinodinos was last week named in a damning report by the NSW Electoral Commission over the party's use of the federally registered FEF to "disguise" donations, including from banned donors such as property developers, to the NSW division of the party.

​The discussion with Mr Taylor was revealed by Mr Nicolaou in his evidence to the Independent Commission Against Corruption in 2014 during Operation Spicer, its investigation of Liberal Party fundraising.