Eddie Obeid and his wife have "plainly" been funding their lifestyle with "millions and millions of dollars" from a controversial coal deal in the NSW Upper Hunter, the state's corruption watchdog has heard.
"They are able to do that through monies coming in from Mount Penny, millions and millions of dollars.
"The benefit of the monies is real to them."
The Obeids have received $30 million from a coal mining venture in the Bylong Valley, and are still owed another $30 million, the ICAC has previously been told.
It has also been told that money from Mount Penny has been put towards a Mercedes-Benz car for Eddie Obeid, and to buy property in Sydney for his wife Judith.
"You can't swear on your oath that the $166,000 came from Mount Penny money, can you?" Mr Williams put to the witness.
He went on to label the "whole process" of tracing money from Mount Penny to the Obeids as "illegitimate" and "conceptually inappropriate".
Mr Lockley was earlier this week forced to deny accusations of bias, noting that he's "only interested in the money trail".
ICAC also heard on Wednesday that "adverse findings" by the commission might be recommended against a business associate of Mr Macdonald, John Gerathy, relating to him trying to retrieve a legal file linked to the inquiry.
"I think there is a possibility I will be putting a submission that adverse findings be made against Mr Gerathy related to the Tianda file," counsel assisting the commissioner, Geoffrey Watson SC, said.
Mr Gerathy was this week excused from giving evidence to ICAC for a second time on the grounds that he's suffering from a mental illness.
The inquiry continues on Thursday.