The man who admitted to printing damaging leaflets targeting the former Labor member for Newcastle has told a corruption inquiry that party power-broker Joe Tripodi was involved throughout the process.

Vincenzo "Vince" Fedele has told the Independent Commission Against Corruption (ICAC) he was a friend of Mr Tripodi and designed and printed his political materials at his business Mesh Media.

He printed the leaflets used in the anonymous Stop Jodi's Trucks campaign, which badly damaged Labor MP Jodi McKay's bid to hold onto the seat of Newcastle in 2011.

Mr Fedele said Mr Tripodi's associate Ann Wills first approached him about the pamphlets, but "Joe was pretty much involved in the whole process".

"I've never denied that," he said.

He said Mr Tripodi had even come to his office to suggest layout and colours for the leaflets.

Mr Fedele told the hearing either Ms Wills or Mr Tripodi told him to "bill Darren" more than $8,000 for the leaflets.

He said he did not know who Darren was, but ICAC has previously heard that Darren Williams from Nathan Tinkler's development firm Buildev was involved in paying for the leaflets.

Buildev wanted to build a coal loader at Mayfield, but Ms McKay supported a rival proposal for a container terminal.

Mr Fedele told the meeting he had a conversation with Mr Tripodi in a coffee shop after a newspaper called asking him who was behind the pamphlets.

"He said 'keep me out of it'," he said, but clarified that was in relation to the newspaper inquiries - not ICAC.

Newcastle businessman claims he was confused

Earlier, a Newcastle businessman said he gave incorrect evidence to ICAC about the funding of another anti-Labor ad-campaign because he was confused.

The owner of Churchill's Carpet Court, Paul Murphy, headed up the Newcastle Alliance business lobby which registered as a third-party campaigner before the 2011 election.

ICAC heard that in his private evidence Mr Murphy had admitted the Newcastle Alliance had funded FedUp, using money from Mr Tripodi's associate Ann Wills - who also did work for Mr Tinkler's development firm Buildev.

But in the witness box he said that evidence was wrong.

"I did not get involved with FedUp," he said as he denied that he and two other men in the Newcastle Alliance had secretly organised to fund the organisation without the knowledge of other board members.

He conceded the alliance had received $50,000 from banned donor Nathan Tinkler but said that money was used for the group's "general advocacy" and "fighting fund" in the Newcastle area - not for the FedUp campaign.

When asked why he had changed his evidence, Mr Murphy replied, "I was confused".

He said he had since gone back and "checked" his notes.

But when pushed by the counsel assisting Geoffrey Watson SC about where those notes were now, he eventually replied, "in my mind".

He admitted he had spoken to fellow alliance member Rolly De With since giving his evidence in private, but insisted it was "about a carpet matter".

Throughout his evidence, Mr Watson repeatedly accused Mr Murphy of making up his evidence.

"Now you're really lying," Mr Watson said.

"You're telling a very intricate lie, aren't you?"

But Mr Murphy denied this was the case.

"No I am not," Mr Murphy replied.

ICAC commissioner Megan Latham warned Mr Murphy that the evidence he was giving "stretches credulity".