The Department of Local Government has reopened an investigation into political donations allegedly taken by Sydney councillor Shayne Mallard after it overlooked $11,000 he received from a hotel group whose developments he voted on.

Cr Mallard has denied he collects donations himself despite signing documents submitted to the Electoral Funding Authority and available on its website showing he received more donations of more than $40,000 before the 2008 local government elections.

At the time he claimed he had not received the donations himself.

“I don’t collect donations. I don’t benefit directly from donations it goes to the party to spend,” he said.

The department’s investigation into Cr Mallard was conducted after Greens MLC Lee Rhiannon said last year in State Parliament that he had voted for two development applications brought before the council on June 1 last year by Argos Pty Ltd.

According to donation returns lodged with the NSW Electoral Funding Authority and signed by Cr Mallard, Argos Pty Ltd made two separate political donations to Cr Mallard’s election campaign, one for $10,000 on March 9, 2007 and another for $1000 on June 24, 2008.

Under the council code of conduct donations exceeding $1000 constitute a non-pecuniary interest and councillors must “have no involvement in the matter, by absenting yourself from and not taking part in any debate or voting on the issue”.

The minutes of the meeting stated: “Shayne Mallard declared a non-pecuniary interest ... in that the applicant is a donor to the Liberal Party. (He) took part in discussion and voting on these matters.”

But Cr Mallard did not disclose that he had received two donations directly from Argos Investments Pty Ltd. After media reports about the donations Cr Mallard told a council meeting on November 2, he had sought legal opinion that advised he was in breach of the code of conduct. He apologised to the council.

He also made a self-referral of the matter to council’s general manager Monica Barone, which was passed on to the department for investigation.

A spokesman for the Election Funding Authority Richard Carroll said the Argos donations were made directly to Cr Mallard.

“Any disclosures lodged by Mr Mallard as a local government councillor disclosing political donations received are donations made to Mr Mallard and not the Liberal Party,” Mr Carroll said.

In a letter to Ms Barone in January deputy director of the department, Ross Woodward, wrote that the it could find no evidence Cr Mallard had received donations from Argos Pty Ltd and that he had not committed a breach of the code of conduct.

But Mr Woodward’s letter made no reference to the two other Argos Pty Ltd donations made directly to Cr Mallards campaign and he would not comment on what evidence the department and examined in its investigation. However, in an emailed statement he said: “I can confirm that the division is re-examining the matter of the political donation issue relating to Cr Mallard ... in view of new information that has been provided to the Division.”