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A 21st Century Rum Rebellion

Amid the 54 lawyers who jammed the benches on Monday when the NSW Independent Commission Against Corruption opened its long-heralded public inquiry into corruption allegations at the Labor Party’s top, a trim, silver-haired figure in a dark suit and black boots slid gently into the far back row.

Ian Temby has the timelessly good-looking face of a lawyer who has long enjoyed the top drawers of his profession; a quarter of a century ago he was the commonwealth’s first Director of Public Prosecutions. He left that job in 1989 to become the Independent Commission Against Corruption’s founding chief — picked for the job by the freshly elected NSW Liberal premier Nick Greiner, who believed that Temby was the man to confront, finally, the layers of corruption that had blighted NSW during the dozen years of the previous Labor governments.

<p>AAP/Dean Lewins</p>

AAP/Dean Lewins

Former NSW Labor MP Eddie Obeid leaves the Independent Commission Against Corruption in Sydney.

Temby did not, as Greiner and his ministers had wished, turn the commission’s newly-acquired draconian powers — to compel witnesses to speak and to bug their conversations — on the NSW Police’s corruption-bloated under-belly. Instead, in a most spectacularly lethal spectacle of blow-black, Greiner very soon found himself before the commission and Temby over his attempts to engineer a by-election to shore up his government’s numbers in Parliament.

Though Temby did not find Greiner had behaved corruptly, he damned him anyway, concluding that had a jury heard the facts it would have found Greiner fell short of expected standards of honesty and integrity. The findings — no matter that they would be later overturned in court — shattered Greiner, prematurely ended his political career, and deeply embittered the Liberal Party toward Temby and the commission.

Greiner’s fall would set the Labor Party up for another 15 years in power.

Hence, when yesterday the ruddy Geoffrey Watson, QC, counsel assisting the commission, appealed for the commission’s galleries to brace themselves as he began to lay out the scale of the corruption that may have flourished within the Labor Party’s latter years in office, Greiner might have allowed himself a small smile. What is to be revealed over the coming months will take the public deep inside the NSW Labor Cabinet room, Watson said, and is the result of the most complex and important investigation ever undertaken by the commission. The public inquiry phase of the investigation — now beginning — will decide if what occurred was indeed corruption.

Watson clearly sees the potential. Earlier he told the crowd: “If it is corruption, then it is corruption on a scale probably unexceeded since the days of the Rum Corps.”

Temby, in the back row, winced in apparent disbelief at the analogy. He has a client — a “minor player” is all he would say — in these proceedings.

Yet, as Watson’s outline of the inquiry continued, the scale of it was indeed breathtaking. Watson said that the former NSW Labor minister and factional warlord, Eddie Moses Obeid — and his family — may have reaped $100 million as a result of decisions taken or influenced by one Ian Michael Macdonald, also a former NSW Labor minister, whose working and personal relationship with Obeid will be a big focus of the public inquiry in the coming weeks.

Yet, said Watson, the importance of the inquiry will not be the vast sums of money involved; it will instead be the identity and rank of the public officials involved and the way they made decisions. “We will go inside the NSW cabinet room. It will examine political and personal allegiances inside and outside the cabinet. The critical decisions, which will come under consideration, were made by a minister and made at a ministerial level.”

“It was a very good deal for the Obeids. They outlaid $200,000 to recover $60 million.”

The critical decisions to be examined were made by Macdonald when he was the NSW minister for mineral resources between 2005 and 2010 — a period when he had oversight of NSW’s coal resources, and when the practical effect of his decision-making was, in Watson’s words, to confer massive cascading profits on Eddie Obeid and his family. Obeid and Macdonald will tell the inquiry, Watson said, that the profits came about by accident and were a product of coincidence.

At the core will be questions about how the Obeid family came to acquire ownership and interests in farming properties in rural NSW which would soon after see their values soar once they were declared by the government to be within new coal exploration areas. One farm owned by the Obeids in NSW’s Bylong Valley quickly quadrupled in value to $13 million after they bought it.

But beyond the farms, Watson revealed that the Obeid family had also secretly negotiated a substantial share in the mining company which eventually was awarded the mining exploration licence over their properties — a transaction the Obeids had tried to hide but which was unraveled by the commission.

“It was a very good deal for the Obeids,” Watson said. “They outlaid $200,000 to recover $60 million.”

In what might be read as a warning to the those under investigation about how much the commission already knows, Watson said the public inquiry was not starting with a blank page. Secret investigations have been running for months and already more than 100 witnesses have been interviewed, search warrants executed, computer hard drives seized and tens of thousands of documents acquired.

On Tuesday two star witnesses will give evidence in public. They will be two former NSW Labor premiers, Morris Iemma and Nathan Rees. They are accused of no wrong-doing and will have no allegations to answer. Instead, we can expect they will attest to the power, influence and reach of Eddie Obeid within the NSW Labor Party.

For this inquiry — as stunning as the sums of money and the characters may be — is not simply about Eddie Obeid and Ian Macdonald. It appears poised to examine in public how power within the NSW Labor Party has operated.

Watson said that among the revelations from former premier Iemma will be how Obeid lobbied to influence the make up of Labor’s Cabinets — in particular his lobbying for Ian Macdonald’s inclusion. Also will come the tale of how Obeid and his followers within the party were so enraged by Iemma’s Cabinet changes that they organised to bring down his premiership.

Iemma’s successor as premier, Rees, will, likely on Tuesday, tell the inquiry that immediately upon becoming premier, he was lobbied by Obeid to put Macdonald in charge of the planning ministry. Rees did not do as they wished. He, too, was removed when Obeid organised the numbers against him, but not before Rees had time to famously declare that whoever replaced him would be a puppet of Obeid.

The inquiry will continue public hearings until mid-December and resume in late-January.

It will undoubtedly be ugly and sapping for the already-crippled Labor Party in NSW. And of course it will be deeply unhelpful to the Federal Labor Party next year — election year.

But it will be the best show in town.

12 comments on this story
by Tom Harper

I am hanging on every report that comes out of this. Has someone thought to relieve Obeid of his passport?

I don't think that it is the fault of the Labour party alone, I am sure that when you lift the carpet other political parties will be hiding under there

November 13, 2012 @ 10:21am
by Dylan

If this all proves to be true, I don't know what disgusts me more - the people involved, or the fact that our political system can be gamed so much and that someone that is so corrupt can gain so much power.

November 13, 2012 @ 10:52am
by Marilyn

I think this will go the same way as the Royal Commission into AWB, nowhere.

Anyone watch Devil's Dust? See the number of people jailed for the mass murder of people in all walks of life all over the country?

Note that yesterday the directors had their penalties reduced to a slap with a feather?

Allegations and claims are not facts.

Lloyd Rayney, Gordon Woods, the MIckelbergs and many others in this country accused of crimes have been found to be innocent.

It's like the over egged claims by FWA made against Craig Thomson, all of which were shown rapidly to be bogus, the claims that Williamson stole $17 million but charges have only been levelled over $1 million involving his family business.

Temby also wrote the report against Williamson who found that so-called $17 million, $16 million of which seems not to have ever existed.

The problem with NSW is real, but the level of Rum Corps?

I reckon making money from farm lands and mines, money that caused not one death or problem is small beer compared to a company that literally has slaughtered tens of thousands in the most horrific manner and another that stole $300 million from starving Iraqis and gave it to Saddam Hussein even while we were bombing the country to bits would be on the level of the corrupt Rum Corps.

I reckon Bond, Skase, WA Inc, and hundreds of financial shonks fit the bill a good deal better.

November 13, 2012 @ 2:28pm
by Neil

Like the latest royal commission, let it roll and let heads roll, the cleansing may be awesome.

November 13, 2012 @ 5:12pm
by Neil


We should have a genuine enquiry into the AWB but we all know the terms were limited to achieve the result they wanted, end of story. Need people who are retired and with no kids to support and mortgage to pay to come and tell their stories, expose truths and get to the bottom of these problems, too many people are inhibited by the fact they have commitments to family and friends and need to consider their financial positions.

November 13, 2012 @ 5:44pm
by Christopher

It is extremely sad that Labor can't get rid of factions and union dominance and NEVER allow preselection of any candidate to be influenced from outside that electorate. Bitar and Arbib showed no remorse in exposig their true colours soon after leaving their positions within the Party - money grubbers - but I will be surprised, like others, if the corruption is effectively exposed. It appears there is no reason in Australia not to indulge in corrupt acivity.

November 13, 2012 @ 7:55pm
by Gerard Toohey

It seems the norm to me that association can lead to personal benefit regardless of the sphere of operation. In this instance it is the scale that disgusts.

November 14, 2012 @ 8:45am
by Solid gold creativity (aka Narelle Hanratty)

Great, atmospheric story. Thank you. Particularly enjoyed the description of Temby as "a lawyer who has long enjoyed the top drawers of his profession".

November 14, 2012 @ 9:12am
by A. Cowie

This all makes wretched reading to life-long Labor voters. Come on down, Greens.

November 14, 2012 @ 10:06am
Show previous 9 comments
by jay buoy

corrupt activity is the new normal.. AWB.. Stern whu..the banknote saga.. Visy.. Fortescue and its bogus land claimants.. and surprise surprise no penalties ...

November 26, 2012 @ 9:57am
by LibsIsBizAsUsual

Nick Greiner, who was bought down by ICAC, though later cleared in another court, today is Chairman of a quasi-government agency - Infrastructure NSW, while also the Chairman of Lend Lease Infrastructure, a commercial entity that tenders for government infrastructure projects.

Barry O'Farrell thinks the best way to work out infrastructure priorities is to hand over the decision making process, not to the appropriate departments to assess and advise but to Nick Greiner who can at least be seen to have a vested interest in a particular outcome that could benefit him.

Let's not forget Nick was in the Federal Court in Victoria just last year:
smh: Greiner admits hiding company role in deal

So can the government tell us why they have put this fox in charge of the hen house ?

February 4, 2013 @ 1:37am
by Katherine Marchment

Unfortunately none of these "revelations" comes as the slightest surprise to me or to many living in country NSW at the time Minister MacDonald was making these outrageous decisions about our land and rubbing it in our faces from the continual stories in the press about Sir Lunchalot. Many country people in NSW have suffered and continue to suffer because of his dishonest (and dangerous to public health) decisions. Will corruption be proved by this commission? If corruption is proved by this commission can these arseholes be tried in court and sent to jail as they deserve? Do the contracts he signed as minister for mining become void - particularly the exploration licenses on prime agricultural land or over the great artiesan basin catchment? If the answer to these questions is not yes, then ICAC is just a very expensive form of theatre entertainment and yet another waste of money for NSW.

June 10, 2013 @ 7:55pm
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