ICAC calls for criminal charges against NSW ALP kingmakers: the experts respond

ICAC has found Eddie Obeid (pictured at an earlier hearing), his son Moses and former NSW mining minister Ian Macdonald engaged in corrupt conduct. AAP Image/Paul Miller

The NSW Independent Commission Against Corruption (ICAC) today found NSW Labor powerbrokers Ian Macdonald and Eddie Obeid, and his son Moses Obeid, engaged in corrupt conduct and has recommended criminal charges against them.

The trio, who have denied all allegations, now have the opportunity to seek judicial review of the findings. ICAC has referred their findings to the Director of Public Prosecutions (DPP).

The investigation has sparked calls for reform of the powerful NSW ALP branch.

The findings are part of three operations.

Operation Jasper centred on the circumstances surrounding a decision made in 2008 by Macdonald, who was NSW Minister for Mineral Resources at the time, to open a mining area in the Bylong Valley for coal exploration, including whether the decision was influenced by Eddie Obeid. Prosecutors alleged the Obeids, who bought property in the region just before the area was opened for mining, stood to gain tens of millions of dollars from the decision.

Operation Jarilo concerns allegations that ex-boxer Fortunato (Lucky) Gattellari and businessman Ronald Medich offered rewards (including the services of a prostitute) to Macdonald in exchange for meetings with NSW energy executives.

Operation Indus investigated the circumstances in which Eddie Obeid’s son Moses provided former NSW Roads minister Eric Roozendaal with a vehicle in 2007. ICAC cleared Roozendaal of any wrongdoing.

Eddie Obeid has denied any allegations of wrongdoing, saying that he “reject[s] the assertions by the Commissioner that I acted in any way that could amount to corrupt conduct”.

Here are some expert responses to the findings:

Mark Rolfe, Lecturer, School of Social Sciences and International Studies at the University of New South Wales

The recommendations for prosecution are hardly surprising given the newspaper coverage of the ICAC inquiry over many months now. The front page of the Sydney Morning Herald yesterday foreshadowed such recommendations.

It’s interesting that Roozendaal was cleared because he was obviously caught up in the whole media furore over this time. In that respect, it keeps the focus on Macdonald and on the Obeids.

It allows John Robertson, the leader of the NSW Labor party, to claim they have dealt with the few bad apples by expelling them from the party and by embarking on reforms of the party that empower members to have a say in the choosing of the candidates. In this respect, Robertson is riding the coat tails of Kevin Rudd, who has been distancing himself from the NSW branch, which he has been able to associate with the faceless men that brought him down three years ago.

Real reform is starting. There were a number of things recommended in the Bracks, Carr and Faulkner report on party reform, such as alliances with progressive organisations on the Left that could be further implemented. Those three men realise that the old days of the mass party membership are over and many people are invigorated in politics by organisation outside of major parties, such as Get Up.

Some of these reforms are happening or in the pipeline and are attempts at reform that appear more in touch with the community. But it’ll be interesting to see how these things play out in the future. Much still hangs in the balance there.


Anika Gauja, Lecturer, Department of Government and International Relations, University of Sydney

The Labor party pre-empted ICAC’s findings by intervening in the NSW branch earlier this month to amend the party’s rules.

Although the new rules are yet to be finalised by the National Executive (they meet on Thursday), what has so far been announced attempts to address the issue of undue influence in three main ways: by removing the prohibition against disgruntled members taking their grievances to the courts, the creation of more explicit rules to remove and suspend members alleged to have engaged in corrupt activity and the creation of an independent party body to adjudicate intra-party disputes.

Plans have also been made to allow members to directly elect 50% of the party’s powerful administrative committee. The reforms essentially try to diminish the power of organised interests such as factions and the unions by individualising more party decision-making processes - in this instance giving individual rank and file members a say over the election of more party officials.

While allowing members a greater say is a step forward in bolstering the party’s image as a grassroots organisation serious about public participation and engagement and participation ahead of the election, these sorts of measures will never entirely prevent individuals and groups organising and finding ways to exert influence through party structures.

This is a problem for all parties, not just Labor, and permeates well into parliamentary politics - particularly if a party is in power. In this sense, ICAC’s findings can’t be addressed by internal Labor party reform alone.

Allowing members to take the party to court is an interesting reform (removing a prohibition that has been in place for decades), but the costs associated with taking the party to court would be well out of the reach of most members. This change, in combination with the implementation of an independent review panel, will increase transparency within the party.

The flip side is that more of the party’s “dirty laundry” will be aired in public.


Olivia Monaghan, PhD student researching anti-corruption efforts in the School of Social and Political Sciences at the University of Melbourne

The significance of today’s ICAC findings reaches beyond NSW state borders. Following an exhaustive anti-corruption “clean up” in the 1990s, NSW has been widely regarded as the model state for anti-corruption success.

Indeed, many of the other Australian states have based their anti-corruption organisations on the structure and functionalities of the NSW ICAC.

This initial success, however, was achieved through designing anti-corruption methods that focused on the corrupt culture that had been allowed to foster within the NSW public service (most notably within the police force).

If anything, today’s findings – the result of extensive, time consuming investigations – demonstrate the importance of ongoing scrutiny of cultural practices.

While the faces and places of today’s findings were based in NSW, the cancerous nature of both cultural practices and corruption serve as a reminder to other Australian states that, where wealth and power co-exist, corruption can flourish.

A robust relationship between the ICAC and DPP is needed to ensure both the success of anti-corruption efforts, and the punitive deterrents to corrupt conduct.

The ICAC doesn’t have recourse to make criminal charges or recommend specific charges. What the ICAC does is puts together the body of evidence and determines that what has been done can be deemed corrupt. That gets passed onto the DPP and then it’s up to the DPP to lay individual charges.

In NSW, we will probably see criminal charges made in the next month. They could be charged with fraud, misconduct in public office or bribery.

Those sorts of charges have been successfully brought to court in the past.

The penalties vary on the severity of the crime, from heavy fines to jail time or a combination of the two.