He was paying leases on two cars, a Jaguar and a Mercedes, he had two children to put through private school and a socially ambitious wife, Elisabeth.

In late 2013 Mrs Sinodinos, 39, already a director of Young Greek Matrons Association, became a director of Betteroff Australia Ltd, which gives prominent law firm Clayton Utz as its business address.

Former state Liberal minister Ron Phillips joined the company on the same day.

Even with his superior financial skills, Mr Sinodinos was only too painfully aware that the figures didn't add up.

When a third child, Alexander, arrived in 2012, the senator was even more financially stretched.

Senior Liberals figures urged him to move back to his home town of Newcastle where the cost of living was considerably cheaper.

Instead, Mr Sinodinos kept the gun-barrel views of the harbour, albeit in rented rooms at the Watsons Bay Hotel. The hotel is part-owned by the family of federal Liberal MP Craig Laundy. Hotel staff have previously insisted that Mr Sinodinos paid full rent during his stay at the hotel. He is now understood to be living with his in-laws.

Those who know Mr Sinodinos say that once he decided to become a senator he had a limited amount of time to make money and that's why the $200,000 per year on offer from Australian Water Holdings was too good to pass up. Although he was alarmed to find Eddie Obeid's son at the company, Mr Sinodinos has told others he was assured there was no other Obeid involvement.

As it turns out the Obeids purchased 30 per cent of the company in 2010 while Mr Sinodinos was a director. The $3 million the Obeids used to buy in came from the tainted proceeds of a coal deal, which has already been deemed to be corrupt by the Independent Commission Against Corruption.

Senior public servants also claim to have warned Mr Sinodinos about the extraordinary expenses AWH was charging back to Sydney Water.

In May 2010 one of the investors in AWH was so concerned that he organised a meeting with Mr Sinodinos.

Rod De Aboitiz told the ICAC that he confronted Mr Sinodinos, about the extraordinarily high salaries the directors were paying themselves when was the company was in financial distress. ''Arthur, you know that solvency is a big issue for a director,'' Mr De Aboitiz warned.

But the prospect of a $20 million pay day down the track was too good for Mr Sinodinos to pass up.

As TV's Arthur Daley opined: ''Your modern entrepreneur is constantly gazing into the crystal ball of opportunity.''

Correction: The original version of this story said Craig Laundy was a state Liberal MP.