No vaguely conscious NSW citizen believes that every corner on that state’s politics always smelled of roses. For many years, however, there was a sense of futility among honest police about the chances of achieving much action. In 1980, for example, a NSW crime intelligence report said a Labor ministerial employee was considered a leading figure in the Calabrian mafia.
The report said the “feeling is that it is unusual that [this person] should be employed in an official capacity by the state government". But police did not see any point in pushing to end the appointment. The employee did not leave for several years despite the Fraser government advising the NSW minister in 1979 against the relationship.
There is an entirely different dimension to the inquiry the NSW Independent Commission Against Corruption is now conducting. The investigation is damaging the Labor Party, which allegedly let a factional boss use his effective control of a government to enrich himself and his family massively. This is not the first corruption allegation in NSW, but the scale and seeming audacity of the alleged behaviour is attracting an unprecedented level of protracted public attention.
Following the death of a former Liberal premier Robert Askin in 1981, Fairfax Media revealed he had received pay-offs from an SP bookie. But the election of Neville Wran’s Labor in 1976 diminished the political impact. Although Wran’s prisons minister Rex Jackson was jailed for taking bribes to release prisoners, Labor largely succeeded in portraying him as an aberration.
The ICAC is testing its allegations that
One of Obeid’s sons, Moses, told the ICAC that information Macdonald had given him, and other government decisions, meant his family stood to make at least $75 million. But he denied knowing the information was confidential.
Labor’s modern deal-making ethos allowed Macdonald to ignore tender processes and encouraged the directors of his favoured company to enter into an arrangement (now in jeopardy) to on-sell the licences for almost $500 million without engaging in any productive activity. The ICAC has shown that Eddie Obeid and his family held a silent stake in this company. It also obtained phone records showing 299 calls between Obeid and Macdonald in one year.
While the ICAC’s focus has been on the mining leases Macdonald issued, it is not scheduled to investigate licences Obeid issued while mines minister for four years from April 1999.
But its hearings have referred to the family’s valuable property portfolio, including cafe licences at Circular Quay granted by a state government authority. The ICAC has shown large sums of money passing through family companies and trusts. Yet Obeid’s pecuniary interest statements during his 20 years in Parliament showed his MP’s salary as his only income.
Following revelations by The Sydney Morning Herald, the ICAC obtained documents showing that an Obeid family trust secretly invested $3.4 million in Australian Water Holdings, a company with hundreds of millions of dollars in contracts from the state-owned Sydney Water in the city’s north-west. The company’s head, Nick Di Girolamo, had previously denied this investment existed. So did Moses Obeid until agreeing at the ICAC that his signature was on a relevant document.
The SMH reported that Eddie Obeid had lobbied the former Labor government on the company’s behalf. A former Labor treasurer,
Eddie Obeid does not fit the standard picture of a Labor faction leader. He was not a union boss before entering Parliament in 1991. Born a Maronite Catholic in Lebanon, he came to Australia at age six and later became a taxi driver and property developer.
Before he retired from Parliament some months after Labor’s slaughter at the 2011 election, Obeid showed little interest in most policy issues, compared with some decisions with a government-business interface. He worked assiduously to entice Labor members to back his right-wing faction and ensure preselection of new candidates until he dominated the parliamentary party.
Obeid’s influence became so pervasive that he was instrumental in making
Apart from the electoral fallout from the ICAC hearings, federal Labor will now find it hard to keep resisting calls to set up an anti-corruption watchdog like the states have. But it is likely to put up stiff resistance to belated calls from Labor’s parliamentary rump in NSW for ministers to publish their diaries online and disclose all meetings, phone conversations and interactions with lobbyists or private companies.
The Australian Financial Review