Macdonald tells ICAC coal claims are ‘fantasy’

Former NSW resources minister Ian Macdonald has described claims that he rigged a 2008 coal tender to benefit the Obeid family as “fantasy”.

Macdonald yesterday completed his fourth day giving evidence at the Independent Commission Against Corruption inquiry into the circumstances surrounding tenements granted in the NSW Bylong Valley.

The ex-MP is alleged to have rorted a tender process for coal exploration licences to the benefit of former Labor colleague Eddie Obeid and his family who coincidently owned the land which the mining tenement covered ''like a blanket'', the inquiry has heard.

The deal was set to deliver the Obeid family a minimum $75 million windfall.

Late yesterday afternoon Macdonald said claims that he used his position to rig the tender process for the Obeids were "fantasy", the Australian reported.

"They (the Obeids) wanted to make a financial benefit and you would facilitate them in doing that, would you deny that?" Macdonald's counsel, Tim Hale SC, asked the witness.

"I've said it's fantasy," Macdonald replied.

Macdonald’s counsel yesterday mounted a defence to the $450,000 he received from business associate John Gerathy who is also connected to the suspect coal deal.

Macdonald received monthly payments of $15,000 or $25,000 from Gerathy.

Gerathy has given evidence to ICAC that he discussed the potential takeover of mining company Cascade Coal by White Energy for $500 million with Greg Jones, a Cascade investor and friend of Macdonald’s.

Cascade Coal won the mining exploration licence in question.

Jones allegedly told Gerathy that if the takeover of Cascade went according to plan he would "give Ian a hand".

Macdonald was to allegedly receive a $4 million kickback from the Whitehaven takeover, through Jones.

Gerathy's lawyer, Tim Robertson SC, said the $450,000 transaction was given as a loan to Macdonald, with the idea the two would set up a business in the future.

Macdonald claimed the business was centred on exporting Australian products to Chinese miners.

Counsel assisting the commission, Geoffrey Watson SC, claimed Robertson was feeding answers to Macdonald, in an attempt to legitimise the story.

Commissioner David Ipp subsequently told Macdonald to leave the hearing room while Robertson concluded his "positive case".

Robertson said there had been some "highly misleading questions based upon false factual assumptions" put by Watson in the previous day's questioning and that he should be allowed to correct the record.

The inquiry reconvenes briefly next month, before a final report is handed down by Commissioner Ipp in July.

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