Eddie Obeid likely to return to jail after guilty verdict on rigged tender
Former Labor ministers Eddie Obeid and Ian Macdonald are likely to be jailed after a Supreme Court judge found the pair guilty over their roles in a rigged coal exploration tender which resulted in the Obeid family receiving a $30 million windfall with the promise of another $30 million.
Obeid’s middle son, Moses, 52, was also found guilty.
Moses Obeid (left), Ian Macdonald and Eddie Obeid (right). Credit:
As mining minister, Macdonald, 72, was found to have committed numerous acts of misconduct which financially benefited his parliamentary colleague Eddie Obeid, also a former resources minister.
In her 700-page judgment, Justice Elizabeth Fullerton said that it was “fundamental to our system of government” that ministers of the Crown always act “conscientiously and honestly in the public interest”.
Macdonald failed to do this, she said. Instead of making a decision for the benefit of the people of NSW, he conspired with Eddie, 77, and Moses Obeid to make a series of decisions for the sole benefit of the Obeid family.
In May 2008 Obeid asked Macdonald for information about coal reserves at Mt Penny. The conspiracy between the three men started the following day when Macdonald directed his department to provide him with the information.
The judge held that when Macdonald later asked his department to re-draw the boundaries of a potential mining area in the Bylong Valley, he knew that the Obeid family had a farm, Cherrydale Park, in that exact location.
Justice Elizabeth Fullerton presided over the criminal trial of two former Labor ministers, Ian Macdonald and Eddie Obeid, and Obeid’s son Moses.
Justice Fullerton said that Macdonald’s motives were not clear. Perhaps it was to gain some “political leverage” or “in the hope or expectation of a financial benefit” if the Obeids’ deal came to fruition, she said. Regardless of his motives, the judge said Macdonald had “knowingly breached” his ministerial obligations “for the improper purpose” of advancing the financial interests of the Obeids.
Once the exploration area was drawn up, Macdonald orchestrated an invitation-only tender, the participants of which were leaked to Moses Obeid. The handwritten list of potential mining companies was given to his associate Gardner Brook, a vice-president of the now-defunct investment bank Lehman Brothers.
Mr Brook, the Crown’s star witness, said that on Moses Obeid’s instructions he set about forging a deal with prospective coal mining companies.
Gardner Brook, the Crown’s star witness in the trial of the Obeids and Ian Macdonald.Credit:Rob Homer
Mr Brook gave evidence that he was under “strict instructions” from Moses Obeid that his family’s identity in any transaction was to be completely anonymous at all times. The Crown maintained this was to hide the fact that the Obeids were receiving “inside information” on the government tender from the mining minister himself.
The Obeids leveraged the inside information to gain a 25 per cent stake in the winning bidder Cascade Coal. There was also evidence given that the Obeids knew in advance that there was going to be a tender process for an exploration licence in their area. Using friends and associates, the Obeids quickly set about snapping up the neighbouring properties before any public announcement was made.
They later used their combined landholding strength to strike a deal with the winning bidder Cascade Coal that their farms would be purchased for four times their value when mining commenced.
However, the property sales and the second tranche of their $60 million payout from Cascade never eventuated due to the matter being exposed by the Independent Commission Against Corruption.
Justice Fullerton found that Moses Obeid told deliberate lies to journalists in an attempt to divert attention from the Obeids’ role in the conspiracy.
During the course of the ICAC’s public inquiry into the Mt Penny licence in 2012, Moses Obeid and his father told a number of lies and “half-truths” in several interviews with two journalists from The Australian.
Father and son fought unsuccessfully to keep out of evidence these and other interviews with journalists.
Justice Fullerton found that in one audio-recorded interview with The Australian in December 2012, Moses Obeid had constructed a “deliberately false narrative” concerning his family’s involvement with the winning bidder.
These lies were “an inference of guilt,” Justice Fullerton said. If he had told the truth, Moses Obeid would have been at risk of “implicating himself as a co-conspirator,” she found.
Mr Brook told the Herald from his Indonesian home that the verdict was a “beautiful outcome” for those tasked with “holding the corrupt and the powerful to account.” He said he hoped “this verdict of guilt should send a message to others that the ICAC and other integrity bodies will find out the truth”.
There will be a hearing in the Supreme Court on Thursday to determine whether the three should be in jail while awaiting a sentence hearing in September.
In 2016 Eddie Obeid, was sentenced to a three-year jail term after a jury convicted him of misconduct in public office for concealing his family’s secret interest in cafe leases at Circular Quay.
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