Five reasons why Macdonald is a ‘crook’: Watson tells ICAC

Ian Macdonald’s stint in the ICAC’s witness box yesterday continued where he was told not to "shilly-shally" by the state's anti-corruption watchdog himself, David Ipp QC.

Macdonald didn’t deny providing confidential information about the 2008 coal tender to the family of Labor powerbroker Eddie Obeid, instead Macdonald said he did not recall a conversation with Obeid’s son Moses Obeid and attempted to contest the confidentiality of the material Moses Obeid told the inquiry he received.

The coal tender in question enabled the Obeid family to negotiate deals worth more than $75 million.

Macdonald’s numerous attempts to define ‘confidentiality’ fuelled Ipp’s "shilly-shally" reprimand.

"Do you accept it is very confidential?" Ipp asked of an internal department briefing for an impending campaign of coal resource tenders.

When Macdonald repeatedly tried to say that only "aspects" were confidential, Ipp did not hesitate to rebuke the disgraced minister.

ICAC is continuing to investigate the 2008 tender which sits under the Obeid family’s three Bylong Valley properties, and is alleging a “criminal conspiracy” occurred between Macdonald and Obeid.

Macdonald told the commission that his former chief of staff, Jamie Gibson, and a senior departmental officer, Brad Mullard, had both mistaken his instructions about the creation of a coal tenement, SMH reported.

Counsel assisting the inquiry, Geoffrey Watson SC, said several times that Macdonald personally instructed the creation of the Mt Penny tenement.

"Mullard and Gibson are totally wrong? Three of you in the room, two of them are wrong and you're right?" Watson asked.

"I think the points you have put to me are totally wrong," Macdonald replied.

Watson spent most of yesterday going through 39 coincidences which connect Macdonald with the Obeid family’s profits, and finished with saying “you’re a crook”.

''Look, Mr Macdonald, what I really want to put to you is that in fact you're a crook.''

Watson then put it to Macdonald that he ''agreed with Eddie Obeid and his family'' to create the Mount Penny tenement.

“That's an absolute lie … and just said for the benefit of the Fairfax press,'' retorted Macdonald.

Watson then backed up his accusations with five reasons.

''Can I just put another five reasons why I suggest you're a crook? They start with this, it's because the decisions which you made are so irresponsible, so bad for the people of NSW there was no proper basis ever for making them.''

Reason number one

The first reason Watson provided was that in 2008 Macdonald with an "inappropriate degree of urgency'' rushed through the 2008 coal tender currently being investigated by the ICAC.

The inquiry has heard that departmental staff warned against approving the Mount Penny tenement without further exploration.

NSW tax payers received ''nil, nothing, zero'' in the form of additional financial contributions for the Mount Penny tenement.

Macdonald claimed the Global Financial Crisis was to blame.

''I didn't do the GFC. The GFC killed everything,'' he said.

Reason number two

Macdonald had been ''irresponsible'' in only issuing invitation-only tenders to small mining companies, hence eliminating bigger companies from the process.

ICAC has been given evidence that many of these small firms did not have the financial resources to conduct coal mining operations, some were worth only $2 and others were connected to the Obeid family.

Constructing the tender process in this fashion allowed juniors to make a quick buck, on-selling to the larger companies who were previously shut out from the tender.

Macdonald justified the process, saying, ''All junior miners are junior at the beginning, they can grow like any other company''.

Reason number three

Watson told the commissioner that Macdonald has ordered a bigger tenement be redrawn and then subsequently downsized so it covered the Obeid’s properties ''like a blanket''.

'”The third mad aspect of the decision you made was the carve up of North Bylong,'' said Watson.

The Obeid’s had purchased the properties after receiving confidential information, allegedly from Macdonald about the upcoming coal tender.

Reason number four

Taxpayers were cheated out of considerable revenue because none of the companies involved in Macdonald's 2008 tender paid any ''additional financial contribution'' to the state.

Reason number five

''And the fifth reason … you're corrupt is your failure to reveal the involvement of the Obeid family,'' Watson said.

Macdonald had already admitted he failed to notify the government or the public of the Obeid’s involvement, he said he was unaware the Obeid’s land was affected by the Mount Penny tenement until he read it in the media.

Upon learning of the Obeid’s involvement in the government tender, Macdonald exclaimed that he was ''terribly upset'' and ''absolutely surprised'' over the Obeids' failure to tell him.

Macdonald and Obeid maintained their relationship after he resigned from politics in June 2010 following allegations that he made "errors" in his travel expenses.

Joining forces the Obeids and Macdonald have in the past pursued coal deals in Indonesia.

''After I left Parliament, we fell on some difficult times, in terms of trying to get some business going and some work,'' he said.

''We endeavoured to take a group of partners to do some work in Indonesia.''

It has been alleged that Macdonald stood to make a $4 million windfall from the sale of Cascade Coal, the winner of the Mount Penny tender.

The sale never eventuated.

ian-macdonald-420x0.jpgThe inquiry has also heard that in July 2008, immediately after Macdonald gave Moses Obeid a list of companies that would be invited to tender for the Bylong Valley coal licences, the Obeids gave Macdonald free accommodation at the family's $700-a-night ski lodge, The Stables, in Perisher, SMH reported.

Macdonald is also said to have left the Obeids with two food bills equating to more than $800, the commission heard.

The meals were paid using Obeid’s wife Judith Obeid’s loan account in Obeid Family Trust No. 1.

Macdonald said he did not know anything about the payment of the meals.

Gone are Macdonald’s days of expensive meals and free accommodation.

''These days I do cleaning and work associated with a shop,'' he said.

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