A corruption inquiry has heard that the mayor of Sydney's Ryde Council tried to discredit a general manager by leaking a report about his laptop being used to access pornography.

The Independent Commission Against Corruption (ICAC) is investigating allegations of corrupt conduct involving six Ryde councillors including Mayor Ivan Petch and Councillor Jeff Salvestro-Martin.

Mr Salvestro-Martin has this afternoon been dropped by the Labor Party as a candidate for the federal seat of Bennelong as he waits to give evidence to the inquiry.

In his opening address, counsel-assisting Jason Downing said the inquiry would look at allegations Mr Petch failed to disclose his relationship with property developers who had proposals before the council.

He said the mayor also arranged in 2012 for a real estate agent to approach general manager John Neish to tell him that his job would be secure if he delayed a project with Lend Lease to redevelop the Ryde Civic Precinct.

The inquiry heard that when Mr Neish refused, Mr Petch lobbied to have him sacked and tried to discredit him.

"After Mr Neish rejected the offer, Councillor Petch took steps to have his employment terminated or to pressure him to resign," Mr Downing said.

The ICAC heard that, in an attempt to damage Mr Neish's reputation, the mayor then leaked a council IT report about a laptop issued to Mr Neish being used to access pornography.

There is no suggestion Mr Neish did anything wrong.

The ICAC heard that in January this year a council IT worker reported that the laptop was infected with a virus because someone had used it to access pornographic websites.

The inquiry heard that while the matter was subject to an internal investigation, Mr Petch hired a lawyer to save images from the laptop.

According to the council code of conduct the IT report was meant to be confidential.

Links to local newspaper owner examined

Mr Downing said Mr Petch also arranged a $250,000 loan for the owner of The Weekly Times newspaper, John Booth, who was in financial difficulty.

But the inquiry heard Mr Petch failed to disclose this to council when voting on spending money from the council's advertising budget with the paper.

Mr Salvestro-Martin, meanwhile, will be questioned about who placed and paid for advertisements in The Weekly Times prior to the 2012 local government elections.

The ICAC alleges the advertisements were undisclosed political donations.

Mr Petch is also accused of trying to undermine environment and planning manager Dominic Johnston.

Mr Neish, who was the first of 25 witnesses to give evidence and who has resigned from the council, described his relationship with the mayor as dysfunctional.

The inquiry continues.