NSW Labor Inc.: The story so far...
The Daily Telegraph
January 24, 2013 12:00AM
It's alleged Ian Macdonald passed on inside information to the Obeid family, including his former political ally Eddie Obeid, who had bought land in the coal-rich area before the tender process was reopened.
The inquiry heard Mr Macdonald also made the decision to exclude large companies from bidding for the exploration licences, an "unprecedented" move which caused outrage in the industry.
This investigation is considered the public watchdog's most important case to date, with an explosive opening address revealing this may be the greatest-scale corruption by state-elected officials in more than 200 years.
Two former premiers, Morris Iemma and Nathan Rees, gave evidence at the inquiry.
Both said they knew their leadership was in trouble when they stood up to Mr Obeid, a Labor powerbroker.
A former family friend told ICAC that Eddie's son Moses had boasted of the $100 million wealth which would come to the family from the licences, adding "Ian's going to help dad out".
Another witness, family associate Arlo Selby, said in a statement tendered to ICAC that Moses described Mr Macdonald as being "in on the deal" and "that's how we can guarantee we will win any tender we go for."
The Obeids and their associates are alleged to have given the seven owners of successful bidder Cascade Coal secret information to win the coal exploration licence and re-sell it for a profit.
It's alleged Cascade Coal decided the Obeids needed to be paid out of the deal, with $30 million in "sanitation" money given to them for their 25 per cent stake.
The hearing is yet to hear from the main players. Mr Macdonald, Mr Obeid and his sons will be called in coming weeks.
At the end Commissioner David Ipp will prepare a report and decide if the case is to be referred to the DPP for possible criminal charges.
Very good fortunes of Obeids laid bare
AMY DALE COURT REPORTER
The Daily Telegraph
January 24, 2013 12:00AM
A SNAPSHOT into the Obeid family fortune was revealed yesterday as one member of the colourful clan admitted to the ICAC that a "brand spanking new Mercedes" was paid for with funds from their secret mining stake.
The Obeid family ledger and trust fund deed, tendered yesterday during a fiery day of evidence at the corruption watchdog, shows former Labor powerbroker Eddie used a payment from the sale of the family's share in a mining venture to splash out on the luxury $400,000 car.
His son-in-law, living in a million-dollar Sydney home while on a $55,000 salary, was also questioned about whether a deposit on a waterfront property made by Eddie Obeid's wife Judith came from their earnings in a mining tenement.
It emerged the family received $15 million into their accounts through the sale of their share in the Mount Penny tenement - the area at the centre of the current corruption hearing.
The ICAC is investigating allegations former resources minister Ian Macdonald rorted the tender process for the coal mining exploration licences in the Bylong Valley in 2008 and provided inside information to the Obeid family.
The detailed trust documents were tendered to yesterday's hearing despite an objection from the former Labor powerbroker's barrister Stuart Littlemore QC as evidence was heard of a complicated system of payouts between the Obeid family members.
Mr Obeid's son-in-law Hassam Achie spent a testy few hours in the witness box as he faced rapid-fire questioning from Geoffrey Watson SC, the counsel assisting the inquiry.
Mr Achie, who the ICAC heard makes $55,000 a year as a financial controller for the Obeids, said he was unsure of what the payments were about, even though he was the trustee of the company which received them.
"Do you know that Eddie Obeid Snr bought a brand spanking new Mercedes," Mr Watson asked.
"That was actually leased," Mr Achie said.
"Did you know that the money came out of the money from the sale of shares in Mt Penny," Mr Watson asked.
"Some money got put towards the car, yes," Mr Achie replied.
Loans were paid out to family members, including Eddie and Judith's nine children, through a complicated trust fund trail, the ICAC heard.
Mr Achie, married to Mr Obeid's daughter Fiona, said he wasn't familiar with who the beneficiaries of some trusts were, and he would move money around only on instruction from "the (Obeid) boys".
He denied Mr Watson's suggestion that he was "a front" for the family but agreed he had "no independent authority to make a decision" on finances.
He said he couldn't be sure if a deposit made on a multi-million-dollar home in Woolwich for Judith Obeid, his mother-in-law, came from the Mount Penny profit.
"All I knew was ... they had done some particular deal regarding a particular tenement," he said.
He said when he was told by Eddie's sons Paul and Damien Obeid that almost $15 million was to be paid into the account for Calvin Holdings, the company of which he was trustee, that the funds were "for the sale of some shares".
"Did Calvin Holdings pay tax on that $15 million," Mr Watson asked.
"No it didn't ... when the distributions are made the individuals pay the tax," Mr Achie replied.
"Who ... received that money," Mr Watson asked.
"It was the (Obeid) boys and some of the wives," Mr Achie replied.
Fiona Obeid doesn't work but together the couple has a home in Hunters Hill valued at close to $1.5 million with a $1 million renovation planned, the inquiry was told.
The ICAC also heard yesterday that no evidence potentially clearing Mr Macdonald of corruption allegations about his reopening of mining exploration licences emerged during secret hearings.
It was revealed that former premier Kristina Keneally- who reinstated Mr Macdonald to Cabinet after he was sacked by her predecessor Nathan Rees- would not be called to give evidence at the inquiry, which is expected to run for several more weeks.
The decision -made because her evidence wasn't considered relevant to the allegations- led to Mr Macdonald's barrister Tim Hale SC asking for a copy of her compulsory examination , a request the commission refused.
Mr Hale said Mr Rees's evidence at the ICAC last year suggested Ms Keneally's successful challenge for the premiership was "due to the influence of Mr Obeid and (Joe) Tripodi" and meant Mr Macdonald was "beholden" to the pair.
"(We want) the transcript of compulsory examination which may be exculpatory of Mr Macdonald and inconsistent with the allegations made against him," Mr Hale said.
"I cannot recall one instance of any evidence exculpatory of Mr Macdonald," ICAC Commissioner David Ipp said.
"But I accept that somewhere in there, there may be something that does exist ... I personally cannot recall any such evidence.
"There was a great deal of evidence from other witnesses dealing with other matters demonstrating the degree of influence of Mr Obeid and his support of Mr Macdonald."
The inquiry continues.
Cunning accounts in which they trust
The Daily Telegraph
January 24, 2013 12:00AM
AS a lesson in accounting it was a stark reminder to all of us about where we're going wrong.
For a start, we are not members of the tight-knit Obeid clan.
We don't have a network of family companies and family trusts to lend us money on which we don't need to pay tax - because it is a loan.
A big loan for a house, a smaller loan for household expenses, another loan to pay off a credit card or for pool maintenance bills. Company cars.
The loans are offset against any disbursements from profits the trusts may make at the end of the year but, as son-in-law and family financial controller Sam Achie explained yesterday, disbursements only come after he, the Obeid brothers and family accountant Sid Sassine sit down and work out the "best tax-effective position".
That has meant no substantial sums have been distributed to the Obeids from the trusts over the past 10 years.
Lugubrious Commissioner David Ipp wondered out loud about how Achie, on $55,000 a year, and his wife Fiona, who doesn't work, could shoulder the burden of a $1,145,000 Hunters Hill townhouse for which the council has approved a $1 million renovation.
It was all a loan from the trust, said Achie, before he proved that listening to accountants is not all that boring as he burst out in seeming anger and frustration at the commission: "I don't understand what I'm here for, it's just crazy."
Most of us work for a wage, not for a lucky handout, but the rest of the city's millionaires' club no doubt have similar accounting practices.
The Obeids' income and tax arrangements are now out there for all to see, despite the best interests of their lawyers to have the previously private details and personal spending habits suppressed yesterday.
In fact, the family is so obsessed with privacy it has front men hiding that they are involved in some deals. Privacy was the reason a couple of their front men gave to the commission yesterday. Nothing sinister.
With the greatest of respect to my own accountant, I'm going to join the queue forming outside the office of Mr Sassine come the end of this financial year.