The Olympics may soon be over but there’s more fun on the way. In three months time, the NSW Independent Commission Against Corruption will open public hearings into the granting of coal exploration licences in the Bylong valley, north east of Mudgee. And you can guarantee former Labor powerbroker Eddie Obeid -- who turns 70 before the off -- will be leading the field.
Way back in 2007, just before the Bylong valley was opened up for exploration, Lucky Eddie bought a property called Cherrydale Park for $3.65 million, from one of Kerry Packer’s former tax advisers. Gee, it’s a long way from Sydney, but we’re told it’s nice.
And it turned out to be a fabulous investment. As lawyers Clayton Utz told the NSW cabinet, property owners in areas affected by new mines can typically sell out to mining companies for two to three times the market value. And Eddie was one of the lucky ones, eventually selling an option over Cherrydale to mining company Cascade Coal for “a multiple” of what he had paid. Guesses as to what that figure might have been vary from $10 million to $60 million. But either way, Obeid and his family made a nice profit.
So the question, according to Clayton Utz, in their confidential report to cabinet in 2011 was this:
As a former Minister for Mineral Resources, and a member of the then NSW Government, is there any reason for believing that Eddie Obeid had knowledge that the Department intended to grant an exploration licence over the Mount Penny area prior to his family's purchase of Cherrydale Park?”
More to the point, perhaps, given that the Mines Department had been drilling in the valley since early 2007, did he also get wind that coal had already been discovered, so there was likely to be a mine there?
Clayton Utz did not find any evidence of wrongdoing by Obeid or by the then mining minister Ian McDonald (who as energy minister in 2009 spent a night with a prostitute named Tiffanie at the expense of Sydney businessman and alleged murderer Ron Medich).
But the law firm did venture that “Obeid's former Ministerial position and the circumstances surrounding Locaway's purchase of Cherrydale Park are circumstances that suggest that Eddie Obeid may have made use of inside information”. And it recommended an inquiry with coercive powers. Which is what ICAC will now deliver.
Lucky Eddie has been investigated by ICAC before, after allegations in the Sydney Morning Herald in 2002 that he demanded a $1 million payment to the ALP from the Canterbury Bulldogs rugby league club while planning minister, in exchange for solving their development problems. He was cleared on that occasion and successfully sued the Herald for damages.
Eddie was also involved in the famous Offset Alpine saga back in 1993, when a printing factory formerly owned by Kerry Packer went up in smoke on Christmas Eve, delivering a $53 million insurance bonanza to its shareholders. Obeid’s son Paul was a director of Offset at the time, and Eddie brokered the investment to Rene Rivkin (although he himself appears not to have benefitted from a potential 25% share because he didn’t have any money).
More recently, Obeid’s family has been revealed to be the secret owner of lucrative leases granted by the NSW state government on three waterfront cafes on Sydney’s Circular Quay. This state of affairs was referred to ICAC in May, the day after Kate McClymont’s revelations in the Sydney Morning Herald, with a comment from NSW Ports Minister Duncan Gay that there was: ''reasonable grounds on which to suspect the issues may concern corrupt conduct''.
The hearings at ICAC will begin in November and last at least until April. And they’ll be public. They could be fascinating.