Follow by Email

Friday, December 16, 2016

Eddie Obeid finally gets what he deserves

Eddie Obeid’s disgrace. How Mr one percent defined stupid
By  Neil Chenoweth, Financial Review article, 15 December 2016

The really appalling aspect of Edward Obeid's humiliation and disgrace, as he disappears behind prison doors for three years for looting the public purse at Circular Quay, is the revelation just how soddingly dim the man was.

Eddie defined a whole new paradigm of Stoopid. He could Stoopid for his country.
For a quarter of a century as a public figure he worked on the basis that no matter what he did, he could always lie his way out of the consequences.
There was no threat of exposure too pressing, no predicament so dire, that a few well placed fibs couldn't sort everything out.
The appalling thing is that this strategy worked . . . and worked . . . and worked. It made him one of the most powerful—and certainly the most corrupt—figures in the NSW Parliament.
He was brutally efficient at controlling Labor factions. But it's impossible to follow his course through successive inquiries before the Independent Commission Against Corruption without realising that if Obeid had shown any real intelligence, today he would be unbelievably wealthy.
We should be thankful for that. He was incompetent even at being corrupt.
And what does that make the rest of us, who tolerated successive state governments where he played kingmaker?
Perhaps his genius was to realise that being bright is hardly a prerequisite in politics. It's not rocket science.
Two years ago, with one line he changed our whole understanding of society's privileged "One Per Cent".
In the Obeid universe, this is a reference to the "one per cent chance" that he would ever be charged on any of the matters investigated by the ICAC.
Always outraged at any slur on his honour

Back in 1987 former Prisons Minister Rex Jackson set the standard for cases of rorting the public purse: he was sentenced to 10 years for taking a $12,000 bribe. He served three years.
Obeid's conviction of misconduct in public office related to pressuring Ministers and public servants for concessions worth up to $2 million to leases for two restaurants he secretly owned at Circular Quay.

Obeid was always outraged at any slur on his honour. In June 1995 he was furious when The Australian Financial Review referred to him in an article about the secret Swiss accounts that controlled Rene Rivkin's printing firm Offset Alpine.

The Australian Securities and Investments Commission was investigating Obeid's possible involvement. But he said he had not been able to reply to the Financial Review's queries because he was in hospital having a triple bypass.

Apparently he had had a heart attack around the time that it was revealed that ASIC had uncovered the Swiss accounts.
It was not until December 2009 that the Financial Review revealed that former Labor Cabinet Minister Graham Richardson transferred $1 million of the Offset Alpine share proceeds from his Streeton Foundation account in Zurich to a Beirut account in December 1994 (despite handwriting the instructions to the bank, he denies owning the account or the money).

And it was not until 2014 that Kate McClymont and Linton Besser revealed in their biography, He Who Must Be Obeid, that the Beirut account that got the money was held by a partner of Obeid.

The super profits come from mining

Back in 2009, Obeid had swung back into the orbit of the Financial Review after state political reporter Tracy Ong began digging with Angus Grigg and myself into reports that Obeid had scored a big payout for buying a property, Cherrydale Park. It was in the Bylong Valley where a mining lease had just been granted to an unknown company called Cascade Coal.
Obeid told a wonderful series of whoppers about his love for the Bylong Valley.
"We went and had a look at it and fell in love with the situation and the farm," he said. Not only that, he would fight any mine plan that affected Cherrydale.

Meanwhile an employee of Cascade Coal had confirmed the company held an option to buy the Obeid property.
To this point, the highlights of Obeid's career had been to rip off Sydney City Council for $11 million, the Circular Quay restaurants wheeze, and a string of suspicious land deals, while destroying the careers of public servants who tried to thwart his get-rich schemes.
By Sydney standards these were all relatively minor scams. As leader of the dominant Terrigals Right faction in the Labor government, Obeid made and broke successive Premiers, but when it came to corruption he was a small-town grifter.
Here's the thing. In Sydney you get rich via property deals. But the super profits come from mining.
Obeid was the former Mines Minister, and he didn't get it. So when it came to making money from a coal permit he was focused on the property deals—an $8 million profit selling Cherrydale Park and another $22 million as their share of adjoining blocks held through associates.
As the ICAC hearings would show, it seemed almost belatedly in the tender for coal leases that the Obeids twigged that there was more money in a 20 per cent share in the mine.
That turned into a $60 million deal with Cascade Coal plus $7 million or so in an unrelated deal with mining group Coalworks and suddenly Obeid was looking at a payout of close to $100 million (though thanks to the killjoys at ICAC he ended up with only $30 million and a large tax bill).
By December 2009 the Financial Review had mapped out the Obeid family's new coal investments: Loyal Coal, Buffalo Energy, Buffalo Resources and Buffalo Coal.

The story triggered panic moves to disguise them in yet more companies, organised through finance consultant Andrew Caidbay.
Grigg ran hot chasing the story through early 2010. And then the Financial Review backed off.

Documents that emerged in 2012 show that after questions from Grigg, Kaidbay emailed a Coalworks executive on April 15, 2010 that "the AFR is on a political witch hunt from what I have heard from sources at the AFR".

Five days later another Coalworks exec emailed that Kaidbay had told him that he had contacted the then editor of the Financial Review, Glenn Burge, whom Kaidbay described as a personal friend, and was told the paper was trying to connect the grant of exploration licences with Eddie Obeid.

Editors face complex choices when they decided whether or not to run a story. Burge decided the story did not stack up.
Grigg and resources writer Jamie Freed would go on to win a Walkley award for subsequent stories about deals by Cascade Coal, triggering a decision by acting Premier Andrew Stoner in 2011 to announce the coal leases would be referred to ICAC.
None of Obeid's deals were sophisticated

Grigg met with ICAC investigators in May 2011, two months after Labor had been swept from power.
"There was no interest at all from ICAC until after the election," says Grigg.
Did ICAC fear that an investigation of government members could trigger retaliation? But ICAC's independence was protected by law. It would take a vote of both houses of parliament to dismiss a Commissioner.
Or the government could change the ICAC Act.
The critical point in ICAC's investigation came a year later, when the City of Sydney obtained extensive records from the Obeid family businesses which Kate McClymont of the Sydney Morning Herald obtained from the court register.
Obeid was toast.
The documents for the first time pierced the corporate veil that hid Obeid's control of the family interests through a series of trusts.
It led ICAC to the Cascade Coal deal. It also revealed the family's secret ownership of the Circular Quay restaurants.
Counsel Assisting Geoffrey Watson and Commissioner David Ipp pieced together how Obeid's corrupt reach had spread across a string of dirty deals.
None of Obeid's deals were sophisticated. His eventual public examination at ICAC by Geoffrey Watson was a monument to silliness. He fell into all the traps.
Obeid was all bluster: "Mr Watson, I'm not intimidated by you or anyone else," he said early in his testimony, glaring. "Do. You. Understand. That?"
Watson pricked Obeid's vanity, suggesting that he had paid a $330,000 instalment for Cherrydale by squirrelling away his parliamentary salary.
Obeid claimed instead that it was from a $330,000 defamation payout from Fairfax Media (the actual payout was $160,000).
Pressed again, Obeid exploded that he was no squirrel: "Mr Watson. Don't come and say I'm squirrelling away anything. I've spent more money than you've made in a life time, so don't come and—"
The damage was done. Obeid needed to keep to his story that he had no money. But he couldn't help himself. He just couldn't explain where the money came from.
Eddie was clearly the brains trust of the family. His sons didn't sound so clever.
When it came to ICAC's Circular Quay inquiry Obeid's barrister painted an affecting picture of Eddie as a migrant child, bullied at school, called a Wog and a Dago, and now victimised by ICAC.
As Obeid put it, ICAC was "making a mountain out of a mole".
None of it worked. No one believed him.
Obeid spent millions on a Supreme Court case claiming prejudice by ICAC, Commissioner Ipp and Watson. Justice Hammerschlag threw it out in September, describing the case as "manifestly untenable" and "borders on the eccentric".
Obeid has health problems again. His sentencing hearing in August was postponed after he was taken to hospital for a night for a stroke. His lawyers say he has "limited life expectancy".
But then again, if Eddie Obeid's career shows one thing, it's that he is a survivor.
Mr One Per Cent has a plan. Would he lie to you?