Macdonald 'was offered $4m for coal deal', ICAC hears

7 Feb 2013, 6:58 pm   -   Source: AAP

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Former NSW Labor minister Ian Macdonald was allegedly offered millions in kickbacks from coal deals linked to powerbroker Eddie Obeid and his family.

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Scribbled notes written by a friend of former NSW minister Ian Macdonald allegedly show he offered the minister bribes of $4 million in exchange for help with a coal deal in the Hunter region, a corruption inquiry has heard.

The NSW Independent Commission Against Corruption (ICAC) is investigating claims that Mr Macdonald rigged a 2008 tender process for coal exploration licences in the Bylong Valley and that Labor powerbroker Eddie Obeid and his family gained substantial financial benefit from it.

Giving evidence to the commission on Thursday, businessman Greg Jones began with a laugh as he confirmed his nickname for the Obeids - the Irish Catholics.

By midday he was denying offering his "old mate" Mr Macdonald, then the state's mining minister, a five per cent cut if he helped smooth the way for a coal mining tenement covering properties owned by the Obeids which formed part of the Mount Penny exploration area.

Counsel assisting the commissioner, Geoffrey Watson SC, said a note handwritten by Mr Jones suggested otherwise.

"Mt Penny - 5% - $4 million approx by June 2010", the note reads, under the heading Cascade Coal, a mining firm in which Mr Jones was an investor and the Obeids had an interest.

Mr Jones said he had "no idea" what the multimillion-dollar sum in his note referred to and denied that this was a fee to be paid to his friend.

Cascade Coal issued a statement on Thursday that "it had no knowledge of, or involvement in, any such financial arrangements, dealings or communications between Mr Jones and Mr Macdonald or interests associated with Mr Macdonald".

Mr Jones was also asked to explain figures that appeared on the note alongside matters with a connection to Mr Macdonald's ministerial responsibilities, including a $330,000 figure next to the words "forests" and "already taken $30,000 ... already taken $25,000" next to the word "V8's".

Mr Macdonald was minister for forests and for state development when his department made the controversial decision to spend $45 million moving V8 Supercar races to Sydney's west in 2008.

Documents tendered to the commission also showed Mr Jones loaned Mr Macdonald $195,000 through one of his companies but that the MP personally paid back only $50,000.

"Can you see why the passing member of the public might think there's a cloud over this?" Mr Watson asked.

Mr Jones conceded they might, but testified that he was simply helping out an "old mate" when he made the loan.

The commission heard the pair became estranged after Mr Macdonald left parliament because Mr Jones believed he still had "value" as a politician.

Two of Eddie Obeid's sons also gave evidence on Thursday.

Gerard Obeid - painted as the "gofer" who drove his brothers around - was unable to answer several questions relating to his family's accounts and businesses.

"I get the impression you really have no idea," Commissioner David Ipp QC said to him.

"Absolutely I don't," he responded.

Mr Watson put to Gerard Obeid that whatever his ignorance of the family balance sheets, he was aware that his family was "in cahoots" with Mr Macdonald.

Brother Damien Obeid said he had talked his family into buying land at Mount Penny and had been "shocked" to learn there was coal underneath and a mine could be operating nearby within years.

"It was actually an `oh my God moment'," he said.

"I think people who do live near coal mines will tell you that it's not a very nice experience ... I thought, `Oh, what have I done.'"

The inquiry resumes before Commissioner David Ipp on Monday, when Mr Macdonald is expected to take the stand.

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