Eddie Obeid trial: Ian Macdonald said Cherrydale farm ‘away from Mount Penny’, court hears
“Eddie’s property is over the ridge and away from Mount Penny” is allegedly what former resources minister Ian Macdonald told his staffer after the NSW government granted a lucrative mining exploration licence in the area, a court heard.
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When rumors began to swirl that the NSW government had granted a lucrative mining exploration licence on ex-Labor kingpin Eddie Obeid’s coal-rich land, then resources minister Ian Macdonald moved to reassure his staffer, a court heard.
Macdonald’s former deputy chief of staff Jamie Gibson says the first time he spoke to his boss about the Obeid family owning the rural property in the Bylong Valley was in late 2009.
“I was walking with Mr Macdonald towards question time in the Legislative Council and I said to him, “there’s rumours that Eddie Obeid has a property near Mount Penny”,” Mr Gibson told the NSW Supreme Court.
“Mr Macdonald responded to me that “Eddie’s property is over the ridge and away from Mount Penny”.”
Mr Gibson said he wasn’t aware Mount Penny even existed before May 9, 2008, when Macdonald directed him to ask for departmental information about coal reserves in the area and whether its holdings could be put out to tender.
Macdonald didn’t say why he wanted to know the details, but stressed he needed them “as soon as possible,” his coal licence conspiracy trial heard.
“Had you heard of Mount Penny before this date?” Crown prosecutor Sophie Callan SC asked on Tuesday.
“No,” Mr Gibson said.
Neither had the department of primary industries staffer who received the urgent request, but a map of existing exploration licences in the Bylong Valley region was soon provided, showing significant coal deposits.
Later that month Macdonald ordered that Mount Penny be targeted under an expression of interest process, and then requested that the size of the area be reduced, the Crown alleges.
Former Labor MP Obeid and his 51-year-old son Moses allegedly had Macdonald corruptly grant the lucrative licence on the Obeid family’s Cherrydale property between 2007 and 2009.
The trio have pleaded not guilty to conspiracy to commit misconduct in public office, and the Crown alleges Macdonald gave the Obeids confidential intel which they used in negotiations for a joint venture with miners.
Following a June meeting with Macdonald, Gibson emailed then DPI director of coal Brad Mullard asking “could we please have all the maps that you showed Ian today blown up as big as you can and sent up tomorrow?”
Macdonald also requested a change to the shape of the North Bylong boundary tenement “because it would be more reflective of the resources in that area,” Mr Gibson said.
Mr Gibson denied providing the emails or maps to anyone outside the department “because they are commercially sensitive and not for public consumption… and should be protected as such.”
The court has heard Mount Penny became one of 11 coal release areas opened to tender, despite Mr Mullard telling Macdonald it wasn’t a suitable allocation area “because we didn’t have enough information“ about it in 2008.
But Moses Obeid’s barrister Maurice Neil QC has argued the information in the maps would have been publicly available to anyone with geological experience at the time.
A retired DPI senior executive has testified that in October 2008 Mr Gibson told him the minister wanted to reopen the expression of interest process to more applicants after it had officially closed.
“I indicated that I didn’t think that was a good idea in fairly strong terms… mainly because of potential probity issues,” former DPI deputy director general of mineral resources Alan Coutts said.
“But the minister’s office was insisting… I did press Jaimie in our penultimate conversation on the matter, about what was driving this.”
Mr Gibson said a number of miners had contacted the government complaining “they felt aggrieved that they weren’t invited to apply when the process opened and that they would like an opportunity to do so.”
The Crown alleges that several of the new companies that joined in when the tender was ultimately reopened in early 2009 “were connected.”
The Obeid family expected to make $60 million by selling a 25 per cent stake in Cascade Coal, a new bidder that eventually won the coal lease, Ms Callan said.
The Obeids initially planned to partner with Chinese mining entrepreneur Alan Fang, who owned the Tianda Group and had a strong professional relationship with Macdonald, the Crown alleges.
Mr Gibson said he saw Mr Fang at Macdonald’s September 2007 wedding, but said there were no Obeids present.
The trial continues.
Eddie Obeid and family to pay $5m legal bill after failed ICAC lawsuit
Former Labor kingpin Eddie Obeid and his sons have been ordered to pay the NSW government $5 million in legal costs stemming from the family’s failed lawsuit against the state corruption watchdog.
On Tuesday the Supreme Court ruled Obeid and three of his five sons — Moses, Paul and Eddie junior — must cover the defence legal bills of the Independent Commission Against Corruption and others.
The staggering sum includes over $1.6 million for ex-commissioner David Ipp QC, as well as funds for former counsel assisting Geoffrey Watson SC and two ICAC investigators, Grant Lockley and Paul Grainger.
In 2015 the Obeids sued the group for damages, claiming they were unfairly targeted by ICAC during an inquiry that uncovered an alleged $30 million mining deal stemming from a government tender rorted by former resources minister Ian Macdonald.
The probe led to criminal charges against Macdonald, Obeid senior and his 51-year-old son Moses, who have all pleaded not guilty to conspiracy to commit misconduct in public office in a long-running trial currently underway.
The trio hatched a plot for Macdonald to grant a lucrative mining exploration licence on coal-rich Obeid family land at Mount Penny in the Bylong Valley between 2007 and 2009, the Crown alleges.
In 2016 Justice David Hammerschlag dismissed the Obeid’s civil case against ICAC, describing parts of their case as “without substance”, “manifestly untenable” and “fanciful.”
The judge said the Obeids’ case against former commissioner Ipp was “without merit” and “borders on the eccentric.”
In an earlier 2017 judgment on costs, Justice Hammerschlag ordered the Obeids to pay higher indemnity costs plus interest to Mr Ipp, in recognition of the “unreasonable, inappropriate or otherwise unjustifiable behaviour of significance” committed during their legal battle.
“The plaintiffs made allegations against the Commissioner, in his capacity as the holder of significant public office, of misconduct of the gravest kind,” said Justice Hammerschlag.
“These allegations were abandoned without explanation. They were unmaintainable and irresponsibly made.”
In late 2018 the Obeids were hit with further costs when their final appeal bid was refused by the High Court.
On Tuesday Justice Hammerschlag noted that both parties agreed he should fix the final costs amount, adding a “broad brush approach can be taken provided it is logical, fair, and reasonable.”
The full $5,071,475 figure does not include interest, which is still yet to be calculated.
In the Mount Penny trial before Justice Elizabeth Fullerton, the Crown alleges Obeid and his sons become silent partners in a coal venture with Monaro Mining while Macdonald leaked confidential information to them about the rigged tender.
A former Obeid family lawyer has already testified that Moses and his brothers Paul and Gerard Obeid knew the state government would call an expression of interest process from at least June 23, 2008 — nearly three months before it was officially announced in early September.
But this week former department of primary industries staffer Julie Moloney said she told Monaro that the Bylong Valley would potentially be put out to tender during a meeting on May 19, 2008.
The trial continues.
Ex-Labor staffer denies seeking water licence details for Obeid
A senior staffer for former resources minister Ian Macdonald asked for details about water licences for a NSW farm being bought by ex-Labor powerbroker Eddie Obeid, their coal licence conspiracy trial heard.
Adam Badenoch requested “any information” on the licences in an email sent to the water department shortly before the Obeid family bought the Cherrydale property in the Bylong Valley in 2007.
But the witness, who was Macdonald’s chief of staff from March that year until January 2009, told the court he couldn’t recall why he sent the email, and denied seeking the information at Obeid’s request.
Obeid and his 51-year-old son Moses allegedly had Macdonald corruptly grant a lucrative exploration licence on their coal-rich land at Mount Penny between 2007 and 2009.
The men have pleaded not guilty to conspiracy to commit misconduct in public office and on Tuesday Mr Badenoch gave evidence at their Supreme Court trial.
In an email sent on September 26, 2007, Mr Badenouch asked water licensing director Brian Gardoll to “chase up” licences attached to the farm - shortly before the Obeids bought it for $3.65 million.
Mr Badenoch said it was “possible” he sent the email on Macdonald’s orders, but said his memory was too hazy to know whether he acted on his own initiative or not.
“I am oblivious as to the existence of the email,” he said.
“In my personal capacity I have never had any interest of any description of any rural land or water licence.”
Mr Badenoch also insisted his relationship with Obeid “was largely restricted to salutations as we passed one another” at work.
Farmer John Cherry has previously testified he didn’t know there were vast coal reserves on his land at Mount Penny when Obeid came to buy it in September 2007.
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 in November.
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Obeid effectively borrowed from Mr Cherry to buy his multimillion-dollar farm, with Mr Cherry holding on to the unrestricted water licences as security until the loan was repaid.
In May 2008 Macdonald directed that Mount Penny would become 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.
A former Obeid family lawyer has testified that the minister’s sons said they wanted to keep their identity secret to any miner looking to buy their farm because “it would affect the price.”
Monaro Mining’s former chairman has also said he was never told who the mystery Mount Penny landowners were, and if he’d been aware an email containing expression of interest participants had been forwarded onto Moses Obeid, it would have rung alarm bells.
“Look, if I’d seen that and I’d seen it sent to Moses Obeid, the warning lights would have started going off to me,” Warwick Grigor said.
The trial before Justice Elizabeth Fullerton continues.