A NSW Department of Local Government investigation has cleared Sydney Liberal councillor Shayne Mallard of allegations that he breached the council’s code of conduct.

The allegations were made by Greens MLC Lee Rhiannon and the director of the Greens Democracy4sale project, Norman Thompson, late last year.

The Greens alleged that donations made by the hotel company Argos Pty Ltd to Cr Mallard’s campaign, worth at least $11,000, meant he breached the council’s code of conduct last year, when he voted in favour of two development applications by hotels associated with the owner of Argos, George Thomas.

Legal advice obtained by Cr Mallard also confirmed the breach had occurred, prompting him to apologise at a council meeting where he asked the general manager Monica Barone to refer it to the NSW Department of Local Government for investigation.

The investigation found that Cr Mallard did not receive any donations himself, they were made to the NSW Liberal party, and there was no evidence of a close relationship, meaning the alleged breach did not occur.

Cr Mallard said he had been the victim of character assassination and demanded an apology from Ms Rhiannon and Democracy4sale.

“The Greens have been caught out misusing their position in Parliament and their bogus watchdog Democracy4sale has been exposed as a political sham,” he said. “Now that I have been totally cleared the question for the Greens and their agents is will they apologise and desist from the politics of mud-throwing that only damages the standing of all people elected to serve in public office.”

Mr Thompson defended his actions and that of Democracy4sale, saying it “appeared” only some information had been provided to the department.

Another complaint was sent to Ms Barone by UNSW legal student Mathew Drake-Brockman. However Ms Barone said she had informed the department that the complaint had been made, but did not pass on the documentation.

“It appears Ms Barone only sent the Department of Local Government Shayne Mallard’s self referral,” Mr Thompson said. “Since we haven’t seen his referral, we do not know if it showed the $11,000 in donations Cr Mallard received from the Thomas Hotels prior to 1 July 2008.”

Ms Rhiannon also voiced concerns about the nature of the referral of information by Cr Mallard and Ms Barone to Sydney Council, arguing a more detailed complaint with important evidence had been withheld from the department.

“I was disappointed and surprised to learn that general manager Monica Barone had failed to pass on material about Cr Mallard to the Department of Local Government,” Ms Rhiannon said. It is understood that Ms Barone has agreed to pass on the material if requested.

Cr Mallard said the findings should make political enemies think twice.

“Those with a vendetta against me as the sole Liberal elected to the City of Sydney should think twice before embarking on another attempted character assassination.”