The very able Kate McClymont writes: The Obeid family will keep $30 million in proceeds of crime despite family patriarch Eddie Obeid and his son Moses being sentenced to jail terms for their role in a crooked coal deal. Sources have told the Herald that while the NSW Crime Commission could have proceeded against the family for confiscation of their ill-gotten gains, it was decided that the Tax Office would instead pursue them just for the tax that should have been paid on the money. Eddie Obeid was sensationally released on bail within minutes of being jailed for a minimum of three years and ten months on Thursday after his lawyers flagged concerns about the risk of him contracting COVID and dying should he be held overnight at the Surry Hills police station.
Source: Kate McClymont, Fairfax Media
Obeid family keeps tainted millions despite Eddie and Moses jail terms
Former Labor MP, aged 77, his son Moses, 52, and former ministerial colleague Ian Macdonald , 72, all received jail terms over their roles in a conspiracy that involved then-mining minister Macdonald committing acts of misconduct benefiting the Obeid family, who received $30 million.
However, Justice Elizabeth Fullerton reserved the harshest sentence for former mining minister Ian Macdonald, who was sentenced to nine and a half years, of which five years and three months will be non-parole.
In sentencing the trio, Justice Fullerton said that each of the offenders was “fully aware” of the obligations that Macdonald had as a minister of the Crown and that the “objective seriousness” of the offences was of the highest order.
The fact that there was no discernible motive for Macdonald did not mitigate his “extreme culpability” in acting for the financial benefit of the Obeids, said the judge.
Eddie Obeid received a higher sentence than his son due to his position as a member of Parliament at the time the offences occurred.
In July, the three men were found guilty of a conspiracy where it was agreed that mining minister Macdonald would commit acts of misconduct to commercially advantage the Obeids in relation to the tender for a coal exploration licence over the family’s rural property, Cherrydale Park, in the Bylong Valley.
In the lead-up to the winning bidders being announced in October 2009, Macdonald leaked confidential information about the tender to the Obeids which they used to negotiate a 25 per cent stake in the winning bidder, Cascade Coal. They later sold this stake for $60 million, of which they received half.
All three have filed a notice of intention to appeal with Moses Obeid and Ian Macdonald’s lawyers saying the verdict was unreasonable.
Judge Fullerton will hear further details on Obeid senior’s release application on Friday morning before going on extended leave.
In the final report into the sensational corruption inquiry which has now landed the Obeids in jail, Commissioner David Ipp recommended the ATO investigate the $30 million which flowed through a series of family trusts.
It would be “open to the Tax Office to infer from the manner in which the trusts were operated that they were a sham” and that if the payments were not loans, they would be taxable as trust distributions, the report said.
The black money – coal profits – was used by Eddie and Judy Obeid and their nine children to maintain affluent lifestyles that included buying luxury houses, fast cars and a seaside penthouse at Port Macquarie for family holidays.
The matter, which has been before the courts for seven years, has been deferred yet again. This week the family managed to have their fight with the ATO deferred until the determination of any appeal against conviction by Moses and Eddie Obeid.
For years, the Obeid family has proved to be most adept at avoiding payments. Eddie Obeid had until the end of June to repay the state government more than $360,000 in taxpayer-funded legal assistance he had received in relation to three investigations by the Independent Commission Against Corruption. He has not paid.
Nor has Obeid senior or sons Moses, Paul and Eddie junior coughed up legal costs of $5 million – plus hefty interest – as ordered by the NSW Supreme Court. This follows their failed lawsuit against the corruption watchdog, its late commissioner David Ipp, QC, former counsel assisting, Geoffrey Watson, SC, and two ICAC officers.
The Obeids’ failed lawsuit alleged all manner of wrongdoing against the commission and its officers over their controversial coal deal.
Justice David Hammerschlag, who presided over the Obeids’ battle against ICAC, blasted the Obeids and ordered them to pay the costs of every person they sued, as well as indemnity costs for Commissioner Ipp.
Mr Watson, who as counsel assisting the inquiry famously said the Obeids’ coal deal involved “corruption on a scale probably unexceeded since the days of the Rum Corps,” blasted the Obeids about their failure to meet their financial obligations.
Not only had they failed to pay “one cent towards the successful party costs,” they used their lawsuit in an attempt to persecute Commissioner Ipp “for exposing the corruption of Eddie and Moses Obeid,” the barrister told the Herald.
“He was a decent and honourable man … and that was appalling what they did to him,” he said of Commissioner Ipp, who died last year.
Mr Watson, a director of The Centre for Public Integrity, said that for the past five years the Obeids have “dodged their liability” and have successfully manipulated the legal system. Mr Watson said he’d been personally agitating for the government to bankrupt Obeid and his sons Paul, Moses and Eddie jnr, but to date his pleas have fallen on deaf ears.
A government spokesperson said that settlement talks were underway with the Obeids.
The government also failed to recoup almost $1 million in unpaid rent and other costs from the three cafe leases the Obeid family once owned at Circular Quay.
The City of Sydney was also left empty-handed. In 2012 Moses Obeid and his company Streetscape were ordered to pay more than $16 million in costs and interests to the council for secretly selling the council’s multi-function poles overseas in breach of licensing agreements. Moses Obeid successfully removed himself from any personal liability and by the time the council finally removed the Obeid-appointed liquidators from his company Streetscape, the cupboard was bare.
After the judgment against him, Moses Obeid appointed administrators from the firm Cor Cordis who voted with small creditors, mostly friends and relatives of the Obeids, to accept only a few cents in the dollar in full satisfaction of the company’s debts. This effectively wiped out the $16.6 million debt to the council.