ICAC: The verdict on Eddie Obeid

ICAC gives its verdict on whether Eddie Obeid corruptly lobbied colleagues and bureaucrats over his business interests at  Circular Quay, Direct Health Solutions and his Mount Penny farm.

Hello and welcome to the Herald's live blog on the latest findings from the Independent Commission Against Corruption.

Today, the commission releases three reports on the dealings of crooked former NSW Labor minister Eddie Obeid following public hearings in October and November last year. The hearings were presided over by Assistant Commissioner Anthony Whealy, QC, a former Supreme Court judge.

The first inquiry, codenamed Operation Cyrus, involved allegations that Obeid corruptly lobbied bureaucrats and colleagues - including former ports ministers Joe Tripodi - over lucrative cafe leases at Circular Quay in which his family had a hidden interest.

The second, Operation Meeka, took a closer look at the circumstances in which Obeid lobbied then Labor treasurer Michael Costa about Direct Health Solutions, another company in which his family had a secret interest.

And Operation Cabot took us back to the Obeids' Bylong Valley farm, Cherrydale Park, to examine whether Obeid corruptly lobbied bureaucrats to secure unusually generous water licences over the rural property.

Obeid said last year he was "very, very confident" about the outcome of the inquiries.

Let's see what happens when the reports are released shortly after 10am.

The countdown to the release of ICAC's latest reports begins in earnest.

They are due to be handed to the Speaker, Shelley Hancock, at 10 am.

ICAC's latest reports have arrived (three inquiries, two reports) and the verdicts are in: the commission has found Eddie Obeid and Joe Tripodi acted corruptly in relation to lucrative cafe leases at Circular Quay in which the Obeid family had a hidden interest.

Steve Dunn, the former chief executive of NSW Maritime, has also been found corrupt over the same matter.

SMH Scoop Kate McClymont notes Dunn was appointed deputy chief of NSW Maritime by Tripodi in August 2007. Within two weeks, Dunn had overruled his department to cancel a rent increase over Circular Quay properties and to drop the policy for new tenders.

Obeid has also been found corrupt for "misusing his position as a member of parliament" to benefit his family's financial interests in Direct Health Solutions and water licences over their Bylong Valley farm.

Here's the Herald's Walkley Award-winning story on the Circular Quay leases which triggered ICAC's inquiry.

Among the former Labor ministers sweating on ICAC's findings today is former ports minister Joe Tripodi.

His former deputy chief of staff, Lynne Ashpole, gave explosive evidence last year that Tripodi knew Obeid owned or "had an interest in" retail leases at Circular Quay when he renewed the leases without a tender in 2009.

After that bombshell was dropped, Tripodi returned to ICAC - at his own request - to claim he meant "interested or concerned" rather than financially interested.

"You don't think that evidence is a bit of a long shot?" Assistant Commissioner Anthony Whealy, QC, said at the time.

"No sir, it's the truth," Tripodi replied.

What about criminal charges, you say?

ICAC's reports today recommend the NSW Director of Public Prosecutions consider prosecuting Eddie Obeid for the offence of misconduct in public office over his attempts to influence bureaucrats and Labor colleagues to benefit his family's secret interests in Circular Quay leases and absenteeism business Direct Health Solutions, and to secure generous water licences over their Bylong Valley farm.

However, the commission does not recommend Joe Tripodi be prosecuted.

This is not the first time the commission has recommended criminal charges be considered against Obeid, although the DPP has not yet made a decision.

The Herald's state political reporter Sean Nicholls notes that Joe Tripodi will be expelled from the Labor Party following this morning's corruption finding.

He says that under rules introduced following the federal intervention in the party's NSW branch last year, any member with a corruption finding against them is automatically expelled.

The party's powerful administrative committee is due to meet tomorrow, where the expulsion is likely to be finalised.

It will be NSW Labor general secretary Jamie Clements who formally moves to expel Tripodi from the party, Sean Nicholls adds.

Eddie Obeid has told the ABC that he's taking ICAC's latest corruption findings against him with a grain of salt and the DPP hasn't laid a single charge to date.

If it does, he says he will defend the charges vigorously. For good measure, he adds ICAC is just a Hollywood show, intent on grabbing media headlines and defaming people.

Before we move on to the second report, involving Direct Health Solutions and water licences over the Obeids' Bylong Valley farm, it's worth lingering on some choice quotes from the commission in the Circular Quay report.

Chapter 6, titled "What Joe knew", deals with the evidence Joe Tripodi gave after his former deputy chief of staff Lynne Ashpole told ICAC that her then boss was aware the Obeids owned or "had an interest in" three lucrative harbourside leases.

He tied himself in knots in the witness box, saying he meant an intellectual interest.

"In the commission's view, the subsequent evidence given by Mr Tripodi was an obvious attempt by the witness to rescue himself from a difficult situation," the commission writes.

"It is not too unfair to conclude that he was, as was suggested to him, attempting to "dig [himself] out of a hole. His attempt to retrieve the position, however, was most unconvincing."

Most unconvincing, eh? Ouch.

The commission even extracts an article by the Herald's Anne Davies from 2004 to show that "scuttlebutt and general talk" about the Obeids' interests dates back a decade.

It's not a good day for Joe Tripodi, but he might be thanking his lucky stars on one count: ICAC concluded there was "insufficient evidence upon which to base a prosecution" in relation to his corrupt conduct.

It came to the same conclusion in the case of former NSW Maritime chief executive Steve Dunn, whom ICAC found had used his official position to benefit the Obeids by scrapping a policy for leases at Circular Quay to be put to an open tender.

It meant existing leaseholders at the Quay, including the Obeids, got to keep their lucrative harbourside leases without competing for the rights.

The Obeids had a secret interest in three cafe leases at Circular Quay: Quay Eatery and Cafe Sorrentino on the wharves, and Cafe Arc on the eastern side of the Quay.

Cafe Arc is not the subject of findings in the latest reports because of a public policy quirk: it is not located on land that falls under the jurisdiction of NSW Maritime.

SMH reporter Leesha McKennyrevealed in March that the Obeids had transferred the Arc Cafe lease amid a dispute over unpaid rent.

But it looks like it's all still in the family, with Obeid's great-niece May Schibaia spotted behind the counter.

Taking a closer look at the Circular Quay report, ICAC found that Eddie Obeid corruptly lobbied former Labor ports ministers Carl ScullyMichael Costa and Eric Roozendaal about lucrative leases at the blue ribbon harbourside location without revealing his family had a financial interest in three of them.

He also lobbied Joe Tripodi, whom the commission found was aware of the Obeid family's interest and "deliberately [failed] to disclose" it to his cabinet colleagues.

That is the commission's polite way of rejecting Tripodi's evidence that he thought Obeid's interest in the leases was of the purely intellectual kind.

His failure to disclose that interest is what has landed Tripodi in hot water.

In a dramatic stint in the ICAC witness box, Scully said he regarded Obeid's failure to tell him about his interest in the leases as "quasi criminal".

At the time he was lobbying Scully, Obeid knew that Circular Quay leaseholders had made a $50,000 donation to the Labor Party as "payment" for a favourable decision but Scully said he was unaware of this.

Obeid's barrister, former Media Watch host Stuart Littlemore, QC, had accused Scully of giving evidence that was coloured by his "hatred" for Obeid because he had thwarted Scully's ambition to become premier.

The commission said it accepted Scully's evidence "in general".

It said Scully "clearly had a dislike of Edward Obeid Sr, based no doubt on his own thwarted political ambitions when the Hon Morris Iemma, rather than he, became premier" but is had not "in any meaningful manner" caused him to give "other than honest and generally reliable evidence".

One bureaucrat who will be breathing a sigh of relief is Mark Duffy, the former director-general of the Department of Water and Energy.

Mr Duffy, who has close ties to the Labor Party, wanted a bureaucrat sacked after she "wrangled" with one of Obeid's sons about the water licences over Cherrydale Park.

The commission concluded that Duffy "unwittingly fulfilled" Obeid's expectations that his financial interests would be favoured.

"The commission has come to a clear view that Mr Duffy's conduct, though impetuous and unwise in some respects, was not reprehensible, nor was it improper," the commission writes in its report.

"I've had a political witch hunt against myself and my family for the past three years," Eddie Obeid told ABC radio, in an interview that is now online.

"This is the eighth inquiry."

SMH Scoop Kate McClymont doesn't like her chances of a tete-a-tete with Eddie Obeid today. His dance card must be full.

As Eddie Obeid waxes indignant about "Hollywood-style" ICAC inquiries and the Labor Party prepares to expel Joe Tripodi over corruption findings, let's take a look at the key findings in the latest reports.

Circular Quay

  • Eddie Obeid corruptly lobbied former ports ministers Carl ScullyJoe Tripodi, Michael Costa and Eric Roozendaal to favour existing Circular Quay leaseholders without revealing to Scully, Costa and Roozendaal that his family had a secret interest in two cafes on the wharf.
  • Tripodi acted corruptly by concealing from cabinet the Obeid family's interest in the leases, which he renewed in 2009 without a competitive tender.
  • Former NSW Maritime chief executive Steve Dunn also acted corruptly by scrapping a policy to put Circular Quay leases out to tender, with the aim of benefiting the Obeids.

Cherrydale Park

  • Eddie Obeid improperly influenced Steve Dunn, who was formerly in the Department of Water and Energy, to do favours for him in relation to water licences over his family's Bylong Valley farm, Cherrydale Park.
  • Dunn was found to have acted improperly but was not found corrupt.
  • The former head of the Department of Water and Energy, Mark Duffy, was not found corrupt although he wanted to sack a staffer who "wrangled" with the Obeids over the licences.

Direct Health Solutions

  • Eddie Obeid corruptly used his position to set up a meeting in 2005 between then treasurer Michael Costa and executives of Direct Health Solutions, a company that had developed programs for cracking down on absenteeism in the NSW public service.
  • Obeid did not reveal his family had an interest in the business.
  • Paul Obeid, one of Obeid senior's five sons, was not found corrupt although he was involved in Direct Health Solutions.

That concludes our live blog on the latest reports from the Independent Commission Against Corruption. Thanks for reading.

Right then. On to the findings about Direct Health Solutions, a company set up to deal with absenteeism in the NSW public sector - for a price, of course.

ICAC found that Eddie Obeid arranged for Labor treasurer Michael Costa to meet company executives in 2005, without revealing his family had an interest in the business.

Obeid insisted during the inquiry that his son Paul did not tell him that the family had a stake in the company but his evidence was rejected.

Counsel assisting the inquiry, former ICAC Commissioner Ian Temby, QC, submitted that Paul Obeid should also be found corrupt. But the commission said there was "insufficient evidence to ground a finding that Paul Obeid knew that his father intended to conceal the family involvement" in the business.

On to the second report, which has two parts. It takes us back to the Obeids' picturesque Bylong Valley farm, Cherrydale Park, which also featured in a previous ICAC inquiry.

The commission describes the rural locale as "by all accounts, a beautiful and somewhat remote rural area in the upper hunter region of NSW".

ICAC found that Eddie Obeid misused his position as a member of parliament in a bid to secure generous water licences over the farm, without revealing that his family had an interest in the licences.

The commission concluded that Obeid improperly influenced Steve Dunn - there's that name again - who was found corrupt in the Circular Quay report.

It just so happens that Dunn, the former NSW Maritime chief executive, was in the Department of Water and Energy at the time. The commission concludes that some of Dunn's behaviour was "quite improper" and partial but he is not found corrupt in this report.

"This is not to say that it was anything other that inappropriate behaviour," the commission writes, but the favours he did had "no serious consequences" this time.

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