Eddie Obeid: new book reveals corruption allegations
Kate McClymont and Linton Besser, authors of a new book exposing the corrupt activities of Eddie Obeid, toast its launch in the former NSW politician's old office on Wednesday.PT0M0S 620 349
High noon was the appointed time for the political execution of Edward Moses Obeid. Premier Bob Carr sat at his desk on the 40th floor of Sydney's Governor Macquarie Tower. It was Sunday morning, March 23, 2003, and only the day before the people of NSW had delivered a commanding victory to the Carr Labor government. Amid shouts of, "We want Bob!" Carr had held up his hand to silence the jubilant Labor faithful at the Randwick Labor Club to deliver his victory speech. "I want the message to go out to all of my government, ministers and backbenchers, successful though they have been, that a victory is only an invitation to harder work on behalf of the people of NSW. I hope to set the tone by what I do tomorrow."
Obeid was excited as he made his way to the Governor Macquarie Tower that Sunday for his midday appointment with the NSW premier. Only the previous month, Obeid had been resoundingly cleared by the Independent Commission Against Corruption (ICAC), which had found there was no evidence he had solicited a million-dollar bribe for the party. As he caught the express lift up to the 40th floor, he was no doubt pondering what part of the spoils of victory would be coming his way.
Ready to serve: Eddie Obeid is sworn in to the NSW cabinet in 1999 as Premier Bob Carr (centre) and Treasurer Michael Egan look on. Photo: Fairfaxsyndication.com
The factional warlord was completely oblivious that Carr's comment of hoping to set a new "tone" was directed partly at him and that his leader planned to rid himself of Obeid's jarring presence on the front bench.
Carr soon got to the point. He wanted a generational change, renewal and re-energising, he explained. When Obeid looked at him blankly, Carr realised that an oblique approach was not doing the trick. He told Obeid he was not going to be in the new ministry. Obeid appeared stunned. He protested that he had been cleared by the ICAC and he was suing The Sydney Morning Herald. He would be vindicated in court, he added.
"Eddie, I can't have a minister who is a source of unending controversy," Carr said in reference to other scandals that had plagued Obeid, including his failure to lodge a number of companies in his pecuniary interest declarations. At times, some of Carr's most senior allies in the cabinet had expressed their concern about Obeid and his lobbying. But Carr's response had always been the same. One minster put it like this: "He said, 'I can't just sack someone just because you don't like him or think he is a crook. I need evidence.'"
"We've done nothing wrong ... we're a good Christian family": Eddie Obeid. Photo: Nic Walker
Then, in 2002, the opportunity had arisen.
Six months prior to Obeid being accused of seeking a million-dollar donation for the party from the developers of the Oasis project in Liverpool, south-west Sydney, a similar, if smaller, scandal had rocked the ALP. In mid-2002, ICAC announced it was holding a public inquiry into allegations that the Labor deputy mayor of Rockdale Council, Adam McCormick, had been demanding bribes from developers in return for favourable planning decisions. The story was front-page news, and in cabinet Carr initiated a discussion on strategies to handle the inevitable media and opposition questions on the topic.
Obeid, then the mining and fisheries minister, rarely contributed to cabinet discussion, so it was a surprise when he dipped his oar into this debate. With a shrug of his shoulders, Obeid told his colleagues they were overreacting to the allegation that local councillors were on the take and that developers offered bribes. "Well, someone has got to get paid!" he said.
Power house: Eddie Obeid's home, Passy, in Sydney's Hunters Hill, was originally built for Australia's first French consul-general. Photo: Fairfaxsyndication.com
The effect was electric. "You could see the jaws drop on everyone around the table. Bob Carr was horrified," a senior minister recalled. Carr snapped back: "No, that's not right!" The exchange shocked everyone. "I'm sure that was the point where Bob Carr [decided he] was going to dump him at the next election," another minister said. Obeid sat there seemingly oblivious to the bombshell. "If he was embarrassed, he covered it. There were no words like, 'Oh, I didn't mean that.' " Another minister interpreted Obeid's body language as saying to Carr, "You're living in a fantasy land."
Obeid could not have known that this throwaway line had just spelt an end to his ministerial position. His unethical and morally bankrupt world view was there for all to see. If he didn't know before, Carr now knew that Obeid was a serious danger to his government and that he would have to be removed at the first available opportunity.
As anticipated, during Question Time that day, Carr was asked about the Rockdale corruption inquiry. "Local councillors who tout for bribes will very likely find themselves behind bars," he said. He was right. Three years after a corruption finding by ICAC, the crooked councillor, Adam McCormick, found himself facing a five-year jail term. Revealingly, he told the District Court he hadn't sought the money for himself. Instead, he claimed it was a donation to gain him kudos within the party. "In regard to me being very politically ambitious, I thought it was a very good idea."
McCormick understood only too clearly that those who could attract substantial donations for the party were looked upon favourably by Sussex Street. "I had my connections in ALP head office ... It's part of the culture," he said at his trial. Echoing the sentiments Obeid expressed in cabinet on this matter, McCormick went on to tell the court: "That's what happens in government: deals are made. It's part of politics."
During a March 2002 phone call, which was secretly recorded by ICAC, McCormick was blasted for yapping about the deal by his partner in crime, the Liberals' Andrew Smyrnis, who would also be later jailed. In the phone call to Smyrnis, McCormick said he had spoken to a "very powerful" person at an ALP fundraiser on March 18 that year. "He's not a f...ing shit-kicker, mate. He's a f...ing member of Parliament. He's a f...ing minister," McCormick said. Just who McCormick's "very powerful" contacts in head office and in parliament were was never revealed.
During this period, "head office", which McCormick was so desperate to impress, was being run by the general secretary of the NSW Labor Party, Eric Roozendaal, and his deputy, Mark Arbib. The pair's ability to extract donations from property developers and others was extraordinary. One such donor told then Sydney Morning Herald political correspondent Andrew Clennell that meetings with ministers were contingent on making donations. "The ALP has essentially made it ... that you can't even get a foot in the door without first being a significant and regular donor to the party."
At the time of ICAC's investigation into Rockdale, Mayor Shaoquett Moselmane was being groomed for the state seat of Rockdale by Obeid. But the corruption probe into the council thwarted Obeid's plan to have the Lebanese-born Moselmane become the first state Muslim MP, and Moselmane's political ambitions would not be realised until 2009, when he was given a winnable spot on Labor's upper house ticket.
Instead, the mining and fisheries minister began courting Sydney's longest-serving lord mayor, the prickly but competent Frank Sartor, who would be one of the new bloods elected to Parliament in March 2003 and rewarded by Carr with the Energy and Utilities ministry. A decade down the track at ICAC's sensational inquiry into Obeid's corrupt $30 million profit from a coal deal, Sartor recounted being wooed by Obeid. As they had a coffee together, Sartor confided that one of the things playing on his mind was his lack of financial security. "What do you want to retire on?" Obeid inquired. Sartor replied that $1 million in his super account "would be nice". "I think I can help you with that," Obeid said without blinking.
Sartor was stunned. He declined the offer of Obeid's assistance to find a way to contribute funds to Sartor's nest egg. As he told the corruption enquiry in 2012, he didn't want to come into Parliament feeling as though Obeid "owned" him.
Bob Carr's handsome electoral win in March 2003 gave him the impetus to move against Obeid, who still wielded an all-powerful role within the right wing of the party. But that Sunday morning in March, Obeid was having none of it. Like a stubborn child, Obeid simply repeated his case over and over again: Couldn't he pick his own time? What about the dreadful loss of face in the community? Carr, sleep-deprived after weeks of campaigning, became incandescent with rage at Obeid's pig-headedness.
"I really do need you to do the right thing and go. You've had four years - it's time to go!" Carr said, his temper rising. He wrote in his diary that night: "His refusal - obdurate, repetitive - was like a jackhammer. No arguments could penetrate."
Obeid remained intransigent, repeating his only two lines of self-preservation: that he would suffer a major loss of face and that the Herald was persecuting him. "It went on so long. I picked up the ergonomic chair and slammed it down on the floor," Carr said. "And later on, when he kept on going, I picked up the Mao mug, one of those Cultural Revolution relics, and flung it across the room."
The dent on the side of the bookcase, where the Mao mug shattered, remains a small but powerful testament to the ministerial demise of Eddie Obeid.
Waiting on the floor below in the office of Col Gellatly, Carr's Department head chief, was a handful of senior bureaucrats, including Roger Wilkins, and the NSW Treasurer, Michael Egan. They looked at each other in alarm at the raised voices, the loud thump on the floor above, followed by the sound of something smashing to pieces. They knew Obeid would not take his axing well, but this was too much. Wilkins and Gellatly were astonished when Carr sheepishly informed them later that it was not Obeid who had lost his cool but Carr who had been driven into a fury by Obeid's obstinacy.
Obeid left Carr's office humiliated and angry. He told people that the only reason he had been given for his removal was the Herald's attacks, and that the "gutless" Carr had refused to wait for Obeid's court case against the newspaper. He wanted revenge against Carr and he wanted it immediately. He was on the phone straight away, trying to persuade his mates to back him for a ministerial spot in defiance of Carr's edict.
While many were sympathetic, they pointed out that Carr had just won a major victory and that Obeid's attempt to roll him in caucus was not politically astute. In the end, Obeid didn't nominate and Carr's proposed cabinet went through unopposed.
An invitation to "Passy", one of the grandest estates in Sydney, was until recently an admission to a secretive inner world of money and power, where clandestine deals were conceived, not over fine wine and delicacies, but with fried chicken from Red Rooster and dessert from Donut King. The imposing heritage-listed sandstone edifice, one of the state's finest homes, sits on more than 4200 square metres of garden in the blue-ribbon suburb of Hunters Hill.
Built as an abode befitting the nation's first French consul-general, and later occupied by NSW premier Sir George Dibbs, the most recent lord of the manor is the Lebanese immigrant and former taxi driver who rose to become the state's richest and most influential member of parliament. Eddie Obeid, OAM, was also the most corrupt politician the country has ever seen.
Today, the garden is unkempt and overgrown. Eddie Obeid and his wife, Judy, have shelved their $2.5 million plans for a two-storey pool pavilion, a cinema, conservatory and an underground garage for nine cars. So too, a secret deal to have all power cables in Hunters Hill buried underground because Obeid deemed the ones outside his house an eyesore. The money and the influence are drying up.
On a crisp winter's afternoon in July 2013, the Obeid family matriarch walked down the gravel circular driveway. Judy Obeid addressed a throng of reporters who had gathered outside Passy's tall metal gates. "We'll just go to court. We've done nothing wrong ... We're a good Christian family, we have all top values in life and that's how we've brought our children up," she said.
For months, the public had been shocked by the grubby details emerging from an explosive public inquiry into her husband and children and the crooked mining tender that netted them $30 million. Earlier that day, ICAC had released a report that found Judy's five sons - Damian, Paul, Moses, Gerard and Eddie jnr - were either liars or otherwise not to be believed, and that her husband, Eddie, and middle son, Moses, were found to have acted corruptly. The findings also suggested some of them could end up in jail.
"We've done nothing wrong," Eddie Obeid barked at the journalists in his customary forceful language. "This has been just a political witch hunt to have Labor ex-ministers in the public eye being scandalised and victimised and vilified."
But in Labor's traditional working-class heartland, there would be little sympathy for the Obeids. Their ill-gotten gains had been spent acquiring palatial homes and flashy cars, and supporting the lavish lifestyle to which they had all grown accustomed. For seven years, it was usual for Judy herself to be handed a bundle of cash each week totalling $1000.
The family called it "housekeeping money". Judy told investigators she hadn't the faintest idea where all the money came from, including $450,000 used as a deposit on another $8.5 million Sydney home. In fact, it was just a crumb of the corrupt mine deal.
Judy Obeid may not have been overly curious about the source of her family's wealth, but she was very superstitious about the bad luck that might one day take it away. She would pin the "evil eye" to her grandchildren's clothes to ward off malevolent forces, and kept special bottles of holy water that she sprinkled on her grandchildren. It was the accidental consumption of Judy's "Holy Water", mistakenly offered as refreshment, which left her guests, Nicki and Peter Fitzhenry - who were next-door neighbours of son Moses - with the worst bout of food poisoning they had ever experienced. For a week the couple lay in their beds, their throats raw from vomiting.
Obeid is now universally reviled for his greed and rapaciousness, but the revelations about his conduct came as a shock to many, including those close to him.
"Everyone is rewriting history about Eddie," says Sam Dastyari, the former NSW party boss turned federal senator. "He had fantastic relationships with everybody. He was very charming, very witty, very likeable."
At his famed holiday house at Terrigal, on the NSW central coast, Obeid turned on the hospitality better than anyone - prawns, chilled beer, a good laugh. He encouraged his colleagues and mates to use his ski chalet at Perisher, and he was masterful at using these friendships to his advantage. Whether Obeid had a close relationship with someone or not, he understood that perception is everything.
"I remember once spending the weekend driving around from ethnic function to ethnic function," says Bob Carr, "and there were endless calls from Obeid to drop into his place, where there was a poolside barbecue. I used to joke about it: 'Let's get together, have something to eat, no agenda, just to taaaalk,'" Carr says, laughing as he mimicked Obeid's drawl. "He wanted to demonstrate to whoever was there for lunch that day that he could get the leader of the party to divert."
The tactic was remarkably successful. By 2008, Obeid was at the zenith of his powers. He had unprecedented access to Carr's successor, Morris Iemma, and had the numbers to choose Iemma's replacement. By then, he had groomed a loyal cadre of local councillors, mayors, backbenchers and ministers, building a network of influence unrivalled in Australia's modern history. Obeid could call in a favour from almost any corner of the state.
It's only now Eddie Obeid has been fatally wounded that others are willing to speak out. "There are two types of people in the Labor Party," one senior NSW MP told the Herald last year. "Those who bent the knee and kissed Eddie's ring, and those who kept their distance because they thought him so odious."
To Labor's shame, only a handful stood up to the high priest of the Right.
Edited extract from He Who Must Be Obeid by Kate McClymont and Linton Besser, published by Vintage this week.