Trial of former NSW politicians Obeid, Macdonald delayed for 5 months
The corruption trial of former Labor ministers Eddie Obeid and Ian Macdonald has been adjourned for five months after being plagued by technical issues with establishing a digital court in response to the coronavirus pandemic.
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The mining licence conspiracy trial of former state Labor politicians Eddie Obeid and Ian Macdonald will be suspended for five months after struggling to go digital to protect the elderly men against coronavirus risks.
Ex-powerbroker Eddie Obeid and his 51-year-old son Moses allegedly had former resources minister Macdonald corruptly grant a lucrative exploration licence on coal-rich Obeid family land at Mount Penny between 2007 and 2009.
The trio have pleaded not guilty to conspiracy to commit misconduct in public office but on Monday Justice Elizabeth Fullerton adjourned their marathon NSW Supreme Court trial until August 31.
It had already been delayed for two weeks in early March in response to COVID-19 public health concerns, and after switching to a virtual courtroom a week ago the case has been plagued by technical difficulties.
Since first livestreaming proceedings via Youtube on March 27, the proceedings have been marred by connectivity issues and other approaches such as teleconference have also been abandoned.
Obeid, 76, and Macdonald, 71, and their lawyers had already been excused from coming to court as older people and those with chronic health conditions are particularly vulnerable to the deadly disease.
While grappling with multiple parties appearing simultaneously via video link, Justice Fullerton proposed muting the lawyers, who could then use signs with their hands when they wanted to make objections.
In acknowledging the challenges, Justice Fullerton has previously commended everyone involved for committing “to at least give it a red hot go.”
The case will return for mention on August 3 before the trial resumes part-heard later that month.
The pandemic also raises questions about key Crown witness Gardiner Brook, a former Lehman Brothers investment banker who allegedly helped the Obeids become silent partners in the coal venture while Macdonald leaked confidential information to them about the tender process.
Mr Brook was due to fly from Singapore to give evidence but foreign travellers have been banned from entering Australia under strict rules imposed by Prime Minister Scott Morrison to reduce the risk of spreading infections.
MARCH 16, 2020
The mining licence conspiracy trial of former state Labor ministers Eddie Obeid and Ian Macdonald will be suspended for two weeks to protect the elderly men against coronavirus risks.
Ex-powerbroker Eddie Obeid and his 51-year-old son Moses allegedly had Macdonald corruptly grant a lucrative exploration licence on coal-rich Obeid family land at Mount Penny between 2007 and 2009.
The trio have pleaded not guilty to conspiracy to commit misconduct in public office but on Monday Justice Elizabeth Fullerton adjourned their NSW Supreme Court trial until March 30.
“Those arrangements are responsive to the public health concerns with the COVID-19 virus in a currently managed but potentially unmanageable state going forward,” she said.
“I am reasonably confident that two weeks away from this exposure, for all of us, including the accused importantly, will prove beneficial in the long run.”
Obeid, 76, and Macdonald, 71, may be excused from coming to court at all when the case resumes.
Older people, and those with chronic health conditions and compromised immune systems are particularly vulnerable to the deadly disease.
The pandemic also raises questions about key Crown witness Gardiner Brook, a former Lehman Brothers investment banker who allegedly helped the Obeids become silent partners in the coal venture while Macdonald leaked confidential information to them about the tender process.
Mr Brook is based in Singapore and would need to self-isolate for 14 days before coming to court to give evidence under strict new rules imposed by Prime Minister Scott Morrison on Sunday.
It comes after the Supreme and District courts suspended all new jury trials across the state in an effort to combat the spread of COVID-19.
MARCH 12, 2020
Prosecutors have failed to supply important documents to Eddie Obeid and Ian Macdonald in the former state Labor ministers’ mining licence conspiracy trial.
In the fourth week of the marathon trial, Crown prosecutor Sophie Callan announced that material relating to the questioning of witnesses by Independent Commission Against Corruption investigators had not been included on USBs served to the defence.
“ICAC has been alerted to the urgency of a review of its holdings immediately,” she said on Tuesday.
The court had to be closed on Wednesday as officers from the anti-corruption body searched for about 100 pages of documents.
But by Thursday Ms Callan assured Justice Elizabeth Fullerton the issue had now been fixed and “both the DPP and ICAC are very cognisant of the duties of disclosure.”
It drove co-accused Moses Obeid’s barrister to call for the prosecution to produce all records of communication between ICAC officers and Crown witnesses.
The court heard the missing documents include 2014 statements from Crown witness and ex-department of primary industries official Brad Mullard, which were prepared by former ICAC chief investigator Timothy Fox.
Macdonald is accused of corruptly granting a lucrative exploration licence on coal-rich Obeid family land in the Bylong Valley between 2007 and 2009, and on Thursday Mr Mullard said he couldn’t recall any specific discussions with the minister about Mount Penny.
“I didn’t get the impression the minister was super interested in Mount Penny,” Mr Mullard said.
MARCH 4, 2020
Prosecutors want to cross examine one of their own key witnesses in the mining licence conspiracy trial against former Labor ministers Eddie Obeid and Ian Macdonald, accusing the former NSW government staffer of contradicting evidence he gave to an anti-corruption hearing and police.
Ex-department of primary industries official Brad Mullard has been giving “inconsistent” evidence in the NSW Supreme Court trial of the two former MPs and Obeid’s 50-year-old son Moses, the Crown says.
The trio deny conspiring for then resources minister Macdonald to grant a lucrative exploration licence on coal-rich Obeid family land in the Bylong Valley between 2007 and 2009.
On Tuesday Crown prosecutor Sophie Callan launched a hostile witness bid against the former DPI director of coal and petroleum development, after Mr Mullard testified that Macdonald never asked for Mount Penny to be included in the controversial tender.
This allegedly contradicts evidence Mr Mullard gave to an Independent Commission Against Corruption inquiry that Macdonald specifically directed the creation of a coal exploration area over Cherrydale Farm.
The Crown will seek to test Mr Mullard’s honesty or accuracy in four other areas that are also allegedly at odds with his ICAC testimony as well as two police statements sworn in 2014 and last June.
“This witness’s evidence is inconsistent with previous statements he’s made,” Ms Callan said on Monday.
Justice Elizabeth Fullerton noted former ICAC Commissioner David Ipp “had a different role and function to the function of me sitting as a judge in a criminal trial.”
Another contentious topic will be whether Macdonald asked Mr Mullard questions about the Mount Penny area before the expression of interest process was launched in September 2008, the court heard.
Mr Mullard allegedly told police Macdonald did not show the same level of interest in the other 10 coal allocation areas, but on Monday he said: “I don’t recall any specific request from the minister about Mount Penny.”
The Obeids expected to make $60 million by selling a 25 per cent stake in the mining company that won the coal lease after Macdonald leaked confidential information to them about the tender process, the Crown alleges.
Ms Callan also hopes to press Mr Mullard on whether in June 2008 Macdonald asked him for a list of companies to be invited to apply for the Mount Penny exploration licence, after he stated it was just an incidental inquiry from the minister’s chief of staff.
Mr Mullard allegedly told police he provided the minister with the list one month later, which is inconsistent with his current evidence, the court heard.
The application is expected to be opposed by the defence as the trial continues.
MARCH 2, 2020
A former NSW government coal executive had no idea where an area at the centre of Ian Macdonald’s mining licence conspiracy trial was when the then resources minister suggested putting it out to tender, a court heard.
Former Labor MP Eddie Obeid and his 50-year-old son Moses allegedly had Macdonald corruptly grant a lucrative exploration licence on Obeid family land at Mount Penny between 2007 and 2009.
The trio have pleaded not guilty to conspiracy to commit misconduct in public office and on Friday ex-department of primary industries official Brad Mullard gave evidence at their Supreme Court trial.
The ex-DPI director of coal and petroleum development said in May 2008 Macdonald’s chief of staff began asking the departmental about coal reserves in the Mount Penny area and whether its holdings could be put out to tender.
“There was certainly some confusion at the time because there was uncertainty about exactly where Mount Penny was,” Mr Mullard said.
“Had you heard of Mount Penny?” Crown prosecutor Sophie Callan asked.
“No,” the department’s former chief coal geologist said.
Mr Mullard said Mount Penny wasn’t a suitable allocation area at that time “because we didn’t have enough information" about it as there was no drilling program in 2008.
Despite this, in late May Macdonald directed that Mount Penny would became one of 11 coal release areas targeted under an expression of interest process, and leaked confidential information to the Obeids which they used in negotiations for a joint venture with miners, the Crown alleges.
Macdonald says he pushed the release of new mining tenements because he urgently needed to raise revenue, and instead of cutting public service jobs he opened the tender to smaller coal companies to avoid land banking by corporate mining giants.
While sitting in the witness box, Mr Mullard held two maps on Mount Penny allegedly given by Macdonald to the Obeids in June, and denied providing them to anyone outside the department “because they were about a potential release areas.”
This week, farmer John Cherry testified that he didn’t know there were rich coal reserves on his land at Mount Penny when Obeid and “the boyz” came to buy it in 2007.
The Labor kingmaker said he wanted to run goats and have a milking cow at Cherrydale, and Mr Cherry remembers watching Obeid driving around his paddock in a ute to inspect the farm with his five sons or “what Eddie called the Boyz.”
“That’s b-o-y-z,” Mr Cherry told the judge-alone trial on Tuesday.
“There was just a great big crowd of Obeids … (they were) rather annoying.”
Mr Cherry, who was a key tax adviser to the late media mogul Kerry Packer, said he was furious when he found out Obeid had spoken to government bureaucrats about the property’s valuable water licences before the sale was finalised.
“I told him it was the most stupid thing he’d ever done,” the retired accountant said.
“I’d told him many times not to do it.”
Obeid effectively borrowed from Mr Cherry to buy his $3.65 million farm in November 2007, with Mr Cherry holding on to the unrestricted water licences as security until the loan was repaid.
“I had no idea there was coal underneath Cherrydale,” Mr Cherry said.
The Obeids expected to make $60 million by selling a 25 per cent stake in the mining company that won the coal lease, the Crown alleges.
Mr Cherry said in September 2007 an officer from the department of water and energy called him about establishing volumetric controls on the licences at Cherrydale.
“I said “who is your boss?” He equivocated and finally I got out of him Obeid’s name,” Mr Cherry said.
“With a degree of courtesy – I hope – I hung up.”
The octogenarian said he then angrily called Obeid, who was adamant that as the buyer he had a right to know if he could irrigate the property’s entire 200 acres and whether the unlimited licence would continue.
But Mr Cherry – who the court heard used to get his mate to hover above the property in a helicopter to blow the leaves off his $10 million garden – feared the department could impose a low extraction limit, thus reducing the value of the licences.
In October 2007 the pair arranged a meeting and Obeid came to Mr Cherry’s farm – again with an entourage.
“There was always someone with him. They were hanging around the sheds and I pulled him to one side and told him in no uncertain terms what I thought of his efforts,” Mr Cherry said.
Mr Cherry testified that Obeid told him he’d sought advice on Cherrydale from Steve Dunn, who was previously in charge of water licensing in the ports ministry.
In 2014 the Independent Commission Against Corruption found that former maritime authority boss knew about Obeid’s secret interest in two Circular Quay cafes his department gave a favourable lease to.
Obeid was released from jail in December having served a three-year sentence for failing to reveal his family’s financial interest in the cafes while lobbying a senior government official over the lucrative leases.
In February 2009 the Mount Penny tender application process closed, and Mr Cherry said at the time Obeid wanted to change the buyer's name on the Cherrydale sale papers, claiming it was "to protect their privacy.”
“They wanted to hide the fact that they were involved in coal,” Mr Cherry said.
Under cross examination Mr Cherry agreed his 2014 police statement claims Obeid said: “I don’t want me or my family to be connected to coal mining. We are really against coal mining in the Bylong Valley.”
The trial before Justice Elizabeth Fullerton continues.