ICAC scratches surface of ALP corruption

Former Labor ministers Eddie Obeid and Ian Macdonald have been found to be corrupt.

In recent years, there has been the emergence of a career path in the Labor Party that runs from the union movement to political office. Then, after office, to lobbyist and company director.

Of the 23 key lobbyists in the five mainland states in 2010, 17 had connections to the Labor Party. In a reflection of cross-party unity in NSW, 134 of the 272 officially registered individual lobbyists are former MPs or ministerial staffers.

The disproportionate numbers of Labor politicians accused and convicted of impropriety and fraud include former Queensland Labor government minister Gordon Nuttall, who is serving a 14-year sentence for perjury and 36 counts of corruptly taking secret commissions from businesses. This is no new phenomena.

In 2006, there were allegations against 15 Labor state politicians in Queensland, NSW, Victoria, Tasmania, Western Australia and the Northern Territory. They keep coming. The Independent Commission Against Corruption (ICAC) is set to bring down another finding relating to a curious case of capital accumulation in the coal industry in the next few weeks.

But counsel assisting NSW ICAC in the Mount Penny inquiry, Geoffrey Watson, said the corruption he unveiled was “unexceeded since the days of the Rum Corps”, which began carving up the colony of NSW among themselves in 1792.

In the largest graft inquiry in NSW history, one that followed three years of secret investigation and almost six months of public hearings, ICAC commissioner David Ipp has referred the former resources minister Ian Macdonald, ex-Labor faction leader and premier-maker Eddie Obeid and his son Moses to the Director of Public Prosecutions for “conspiracy to defraud.” A number of prominent businessmen have also been referred to the DPP under Crimes and Corporation Acts.

“He who must be obeyed” ‘and “Sir Lunchalot” are the pet names for Obeid and Macdonald given to them by their playful mates in NSW Labor. Oddly enough, none seemed to have noticed that the state was in effect run from Obeid’s office at room 1122 in the state’s parliament.

The corrupt coal deal that was carried out under their noses has netted the Obeid family $30 million so far and there is a bit more in the pipeline. Cascade Coal, the company that stumped up the money, has a licence to explore, not to mine. If a mining lease was granted over Mount Penny, the Obeids stand to make up to $100 million from a mine estimated to be worth $1 billion.

This unjust enrichment may now be in doubt after Ipp’s recommendation that the NSW Crime Commission investigate whether the $30 million received so far can be forfeited under the Crime Assets Recovery Act.

Prime Minister Kevin Rudd’s Labor reform plan is unlikely to convince many voters in NSW that the rorting days are a thing of the past. Corrupt conduct would seem to come as naturally to some in the NSW Labor Party as branch stacking.

It’s been going on for a while too. Back in 1984, NSW Minister for Correctional Services Rex “Buckets” Jackson received a 10-year prison sentence for selling early releases to prisoners to pay his gambling debts.

The party reforms resemble an attempt to hide naked self-interest with a fig leaf. Reform of ICAC would be more relevant. Much of the evidence presented to ICAC is inadmissible in court. The day after the ICAC report was released, former NSW Labor minister Tony Kelly, who was earlier found by ICAC to be corrupt, heard that he will not face prosecution on the advice of the DPP.

Both Obeid and Macdonald maintain their innocence. Obeid says he “never did the wrong thing by anyone.” He’ll hold his fire until he’s actually charged with an offence.

With Fairfax reporting that ICAC is again investigating Tony Kelly, together with two more former Labor ministers, Joe Tripodi and Michael Costa, Rudd has little option other than to call an early election before public hearings do further damage to Labor’s already tainted brand.