Australia graft probe urges charges for Labor officials

Corruption allegations against two high-profile former ministers tarnish image of ruling party


Criminal charges were recommended Wednesday against two former high-profile Australian Labor Party ministers over corruption allegations following an explosive inquiry that gripped Sydney for months.

The Independent Commission Against Corruption found that Eddie Obeid, formerly a powerful kingpin in the New South Wales state Labor Party, and ex-state Resources Minister Ian Macdonald both acted corruptly in a coal-mining deal.

They were referred to the Director of Public Prosecutions, who will consider whether to lay criminal charges over a scam that the inquiry heard enabled Obeid and his family to rake in tens of millions of dollars.

Obeid’s son, Moses, and five leading businessmen, including one of the nation’s richest, Travers Duncan, were also referred to the DPP for “various offenses” over the mine at Mount Penny.

The damning findings could rub off on the party’s image nationally, with Labor already facing a tough fight against the conservative coalition in elections later this year.

Ahead of the findings, Labor Prime Minister Kevin Rudd said he had been disgusted by the alleged behavior and that any party members involved in illegal activity should face justice.

“My view is very simple — anyone who is responsible for corruption or illegal behavior should face the full force of the law,” he said.

Obeid and Macdonald have both been expelled from the party. The inquiry — the biggest in the history of New South Wales — heard from 150 witnesses over six months and saw people line up for hours to watch the proceedings.

Obeid has denied that he used highly confidential information about a prospective coal license to effect a “massive fraud on the people of New South Wales.”

He is accused of conspiring with MacDonald to rig a 2008 tender to grant the lucrative license over land at Mount Penny — land that he and his family secretly purchased in 2007-08.

The inquiry heard that Obeid used the promise of access to the land to negotiate a quarter ownership of Cascade Coal, which won the tender for the exploration license — estimated to be worth 500 million Australian dollars ($452 million).

Obeid’s 25 percent stake was hidden through a complicated series of trusts and companies run by associates.

The DPP is now expected to decide whether he and McDonald should now face a charge of conspiracy to defraud. ICAC Commissioner David Ipp said he would also pass evidence to the Australian Tax Office and the Australian Stock Exchange for further investigation.