Senior bureaucrats warned mining minister: ICAC

The NSW Independent Commission Against Corruption has heard former mining minister Ian Macdonald ignored official advice not to rush through a coal exploration licence in the Hunter Valley.

A former NSW Primary Industries [DPI] official yesterday told the ICAC that he can’t remember his exact words he used when he learned Macdonald had ignored the department’s advice, but it was along the lines of: "We've been stuffed".

Alan Coutts told the corruption inquiry he may have said something like that after Macdonald blindsided him with an invitation for former union boss John Maitland to apply for the licence in question, Ninemsn.com.au reported.

The ICAC this week launched its hearing into the granting of an exploration licence in December 2008, covering the Doyles Creek coal tenement, to a group of entrepreneurs which included Maitland.

Documents previously tendered to the corruption watchdog suggest the men invested just over $1 million in a training mine site but stood to make up to $60 million within three years, including nearly $15 million for Maitland.

Two senior bureaucrats have testified that they thought Maitland's proposal for a training mine at the Hunter Valley site was the wrong way to go.

Both bureaucrats said the department advised Macdonald that a competitive tender for a licence at Doyles Creek was preferable to a direct allocation, and would earn more for NSW tax payers.

Coutts, the then DPI deputy director general, said he first learned that the former Labor MP had ignored his advice after a colleague forwarded him an article from a Hunter Valley newspaper.

"I was very, very surprised when this happened and in my experience, I have never seen it happen before," he said.

Maitland’s idea for a training mine was first raised in early 2007, Coutts said he had viewed it as a "stalking horse" to get access to a coal tenement that would earn him and his associates a multi-million dollar windfall.

It has been alleged that Coutts was removed from the DPI after he challenged Macdonald over coal exploration licence allocations.

The DPI’s director general at the time, Barry Buffier, told Wednesday's hearing he considered the training mine proposal to be a "thought bubble" that was light on detail.

Buffier was involved in the preparation of a briefing for the minister back in February 2007 that outlined concerns about the integrity of Maitland's proposal.

"I thought that we had been successful in terms of our briefing note in putting the issue to bed or bursting the thought bubble, and I thought that was the end of it," he said.

Maitland, a former national president of the Construction, Forestry, Mining and Energy Union, was considered an influential figure in NSW Labor circles who was "known to be close" to Macdonald, the inquiry was told.

"When (union officials) were having difficulty getting access to ministers, they would call on John to help them in that regard," Coutts said.

Yesterday’s proceedings were cut short after Macdonald’s counsel raised questions over the widening of the scope of the inquiry two days earlier to include whether the ex-MP had acted recklessly or negligently.

The inquiry will continue today.

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