Ex-Labor minister Eddie Obeid hoped to make $60m on corrupt coal licence: trial
The family of former Labor powerbroker Eddie Obeid allegedly stood to make $60 million after former resources minister Ian Macdonald rorted a mining tender for their coal-rich NSW property, their trial heard.
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Former politician Eddie Obeid and his son were allegedly corruptly paid $30 million by a mining company that won a coal lease tender rorted by ex-NSW resources minister Ian Macdonald, their trial heard.
The ex-NSW Labor MPs and 50-year-old Moses Obeid faced the second day of their NSW Supreme Court trial on Thursday, charged with conspiracy to commit misconduct in public office.
The trio hatched a plot for Macdonald to grant a lucrative exploration licence on coal-rich Obeid family land at Mount Penny in the Bylong Valley between September 2007 and January 2009, the Crown alleges.
Once Cascade Coal won the rights to mine, $30 million was funnelled to the Obeid family through a complex web of front companies with a promise of a further $30 million which never eventuated, prosecutor Sophie Callan said.
The court heard former Lehman Brothers investment banker Gardner Brook helped the Obeids become silent partners in the coal venture while Macdonald leaked confidential information to them about the tender process.
Mr Brook is expected to testify that Mount Penny had an estimated coal yield of more than 100 million tonnes with the potential to expand into the wider area which could yield as much as 700 million tonnes.
The Obeids and their family friends bought properties Cherrydale Park, Coggan Creek and Danola hoping to reap tens of millions, Ms Callan said.
Cascade Coal agreed to pay $178,500 a year to mine at the Cherrydale Park, $165,900 annually for Coggan Creek and $36,000 per year for the Danola property under a land access agreement signed in November 2009.
The miner also bought the right to eventually buy all three farms - worth $33.4 million in total - but that didn’t ultimately proceed.
Based on Macdonald’s inside information, the Obeids negotiated a 25 per cent stake in Cascade Coal in return for guaranteeing that another frontrunning bidder wouldn't win the tender, and later sold their share back for $60 million.
Federal Opposition Leader Anthony Albanese will be among 53 Crown witnesses giving evidence during the marathon five-month trial, including Labor party figures, department of primary industries staffers, journalists and mining company officials.
Former NSW premier Morris Iemma will also testify about Macdonald’s long-running friendship with Obeid, with the Crown alleging he was motivated to repay the powerbroker’s past support and secure favourable treatment beyond his political retirement.
Macdonald, Obeid and his son Moses were charged following an explosive inquiry by the Independent Commission Against Corruption, and officers from the watchdog will also take to the witness box.
Obeid was released from jail in December having served a three-year sentence for failing to reveal his family’s financial interest in two Circular Quay cafes while lobbying a senior bureaucrat over lucrative leases.
