JavaScript disabled. Please enable JavaScript to use My News, My Clippings, My Comments and user settings.

If you have trouble accessing our login form below, you can go to our login page.

If you have trouble accessing our login form below, you can go to our login page.

Businessman's handwritten promise to give minister a $4 million coal dividend

Date

Linton Besser, Kate McClymont

Video settings

Please Log in to update your video settings

Video will begin in 5 seconds.

Video settings

Please Log in to update your video settings

Astonishment over rigged tender

Greg Jones has told the ICAC inquiry that his close friend and former mining minister Ian Macdonald, was set to receive millions of dollars from a tender involving Eddie Obeid's family mining company. Kate McClymont reports.

PT0M0S 620 349

THE disgraced former resources minister Ian Macdonald stood to make as much as $4.6 million in kickbacks from deals between his mates and the departments he ran, according to sensational evidence before the Independent Commission Against Corruption.

Mr Macdonald's lifelong friend, the former Labor staffer and now multimillionaire Greg Jones, admitted on Thursday to paying thousands to the former minister, including almost $200,000 in loans that were substantially not repaid, and even $30,000 in ''cash and gifts''.

''Cash and gifts'' … Ian Macdonald.

''Cash and gifts'' … Ian Macdonald. Photo: Edwina Pickles

His confession came after being presented with a note he had handwritten that was alleged to tally the payments he had previously made or planned to make to Mr Macdonald - including $4 million it was alleged would be Mr Macdonald's ''cut'' from the Mount Penny mine at the centre of the inquiry.

At the foot of the hand-written note was this line: ''Need 1 more big mine.''

Crucially, Mr Jones confirmed he told Mr Macdonald - while he was the resources minister - that both himself and the family of the Labor kingpin Eddie Obeid had secret shares in Cascade Coal, the very company that had won an exploration licence for Mount Penny. The Obeids' stake was worth $60 million.

Greg Jone's handwriting … $4 million for Mr Macdonald by June 2015 and Mr Jone's wish for "1 more big mine".

Greg Jone's handwriting … $4 million for Mr Macdonald by June 2015 and Mr Jone's wish for "1 more big mine".

The note also contained a $30,000 payment listed in connection with Mr Macdonald's controversial decision in 2009 to spend $35 million in taxpayer funds on a V8s race in Homebush.

Mr Jones, who was a backer of the event, said this was money that came to him, not Mr Macdonald, however counsel assisting the ICAC, Geoffrey Watson, SC, said the commission had been unable to find this payment in his accounts.

On Thursday night the Greens called for the state government to suspend its negotiations with V8 Supercars over a proposed new contract for 2014.

ICAC evidence … a record of the $195,000 lent to Mr Macdonald.

ICAC evidence … a record of the $195,000 lent to Mr Macdonald.

Mr Jones also denied that a $330,000 figure, tabled next to the notation ''Hume Forests'', was to be Mr Macdonald's 50 per cent share in a carbon offset deal Mr Jones claimed he was putting together. He did admit he wanted assistance from Mr Macdonald, who was also the forestry minister.

''Well, not oil the wheels, [but] I might have wanted to have a meeting with someone,'' Mr Jones told the commission. A company, Hume Forests Ltd, denied any knowledge of Mr Jones or such a deal.

Mr Watson had Mr Jones accept that all the payments listed on the note ''have a connection with Ian Macdonald'', including the reference to $4 million in connection with Cascade Coal.

''It was Ian Macdonald, wasn't it? He was going to get a cut; that's the fact of the matter?'' Mr Watson asked. Mr Jones said no.

But he admitted he had spoken to Mr Macdonald and their friend, the solicitor John Gerathy, about the prospect that he would help them fund a business they planned after Mr Macdonald left Parliament with the millions he made from the coal deal.

''I said I was an investor in Cascade Coal and … I'd have some capital and I'd be interested in looking at what propositions they had,'' he said.

Mr Jones said he lent Mr Macdonald $195,000 in late 2009, as Cascade Coal was working on getting a full mining licence for the Mount Penny tenement and during which period Mr Macdonald was the mining minister.

Mr Watson said the commission had evidence that Mr Macdonald repaid only $50,000 of this money.

Mr Jones confirmed he had been so angry with Mr Macdonald for leaving Parliament that he had broken off all contact with him but denied this was because he had wanted the former minister to assist in having a full mining licence approved for Mount Penny. He denied knowing of any payments being made into Mr Macdonald's Singapore bank account.

Mr Macdonald was forced to resign from cabinet in 2010 after the Herald revealed he had accepted but not declared flight upgrades worth $30,000 from a company for which he had made a favourable ministerial decision.

In his last years in government, Mr Macdonald was known as ''Sir Lunchalot'' for spending public funds on lavish lunches.

But his history as a rorter goes back to his earliest days in politics in the 1980s. He and Mr Jones were among a group of staff members caught improperly running up entertainment bills of more than $18,000 over 18 months until the premier, Neville Wran, ordered the money to be repaid.

Mr Jones told the inquiry on Thursday that it was at a meal at the Rockpool restaurant between September 2008 and December 2009 that he discussed with Mr Macdonald the Obeids' $60 million Cascade Coal payout.

Asked who paid for the meal, Mr Jones laughed: ''There's a simple answer to that, Mr Watson. Have you ever seen a politician pay for a meal?''

with Ben Cubby

Do you know more? investigations@smh.com.au

Related Coverage

Featured advertisers

Special offers

Credit card, savings and loan rates by Mozo