Nicole Campbell, 31, said she did secretarial work for Russell MacKinnon at his Sydney River constituency office from January 2005 until June 2006.
In October 2005, MacKinnon offered her a financial incentive to buy his car, a mid-1990s Dodge Intrepid, she said.
"He called and said he could get me a $3,000 bonus if I agreed to purchase his car," she told the Nova Scotia Supreme Court in Halifax.
She agreed and took possession of the car. But she said she never saw any of the money MacKinnon offered.
"I never had the money in my hands," she said. "Russell dealt with it."
MacKinnon, who has pleaded not guilty to fraud, breach of trust and uttering forged documents, also asked her that fall to sign off on three blank receipts that were later submitted to the Speaker's Office, Campbell said.
Crown lawyer Mark Hareema said MacKinnon was later reimbursed by the Speaker's Office for secretarial services and expenses in three instalments totalling $3,400 from September to December.
Campbell said she never received any of that money and did not incur any expenses.
Hareema also asked her about a receipt the Speaker's Office received for $1,500 in vacation pay for the period of August 2005 to September 2006.
Campbell said she chose to claim her vacation in time, not pay, and pointed out that she was no longer employed by MacKinnon as of early June 2006.
She said she wasn't aware of the vacation pay expense submitted to the Speaker's Office until 2010, when she received an income tax form saying she owed $2,000 for income she did not claim.
"I didn't know what it was," she said. "It was after I received it that I got a call from the RCMP saying they wanted to interview me. I still didn't clue in to what it was."
Campbell said police asked her during the interview in June 2010 about the $1,500 in vacation pay as well as the $3,400 in claims submitted to the Speaker's Office.
Campbell said following her interview with the RCMP, MacKinnon called her asking whether she had received a $1,500 bonus that was attached to a thank-you letter.
When she said she didn't, he told her he had found a cheque attached to a letter that had been lost in his files, Campbell told the court.
Campbell said MacKinnon came to her apartment on July 24, 2010, gave her $2,400 in cash and had her fill out receipts.
She told Supreme Court Judge Felix Cacchione that she didn't know what the money was for and thought it may have been a gift to thank her for her work.
Under cross-examination by defence lawyer Joel Pink, Campbell began crying when he called into question her recollection of events.
Pink told the court she didn't tell the RCMP that she never received money, and instead told the Mounties that she didn't remember what the charges on the receipts were for.
During the proceedings, MacKinnon sat beside Pink, occasionally taking notes as his wife, NDP legislature member Michele Raymond, watched from the back of the courtroom.
Hughie Hayes, a 78-year-old carpenter from Sydney Forks, later testified. He was asked about a $500 expense that the Crown said MacKinnon filed on his behalf for work updating a constituency mailing list in April 2006.
"I never did that," Hayes said. "Never had a computer. Wouldn't know how to use one."
When asked later whether he was ever paid by MacKinnon for work he had done, he replied, "He could've, buddy. I don't know. I have no idea."
He later told the court he had trouble with his memory.
MacKinnon, 59, was one of four politicians charged in February 2011 following an investigation by the province's auditor general into constituency allowance spending. He is the first to contest the charges.
His judge-only trial is scheduled to last until Monday. Pink has said he won't decide what witnesses to call, if any, until the Crown completes its case.
Two of the three other politicians charged in the spending scandal have been sentenced.
Former Liberal Dave Wilson was sentenced last April after admitting to defrauding the public purse of nearly $61,000. He was released from custody in August after serving four months of a nine-month sentence.
Richard Hurlburt, a former Progressive Conservative cabinet minister, was sentenced last July to a year of house arrest after pleading guilty to charges of fraud and breach of trust.
Independent member Trevor Zinck is charged with theft over $5,000, fraud over $5,000 and breach of trust. His trial is scheduled to begin in June.
MacKinnon was first elected to the provincial legislature in 1988 and later became labour minister before quitting politics in 2006.
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