NSW taxpayers have missed out on "tens of millions of dollars" in revenues because of an allegedly corrupt scheme that was designed to net the Obeid family $100 million, an investigation has been told.
In his opening address, counsel assisting, Geoffrey Watson, SC, told the Independent Commission Against Corruption that the scheme could represent corruption "unexceeded since the days of the Rum Corps".
"The effects of the minister's [Ian Macdonald's] decision are that some of our coal assets - assets which could have created revenue of tens of millions of dollars - have passed to the ownership of third parties for a comparatively trivial return for the people of NSW," Mr Watson said.
Former minister ... Ian Macdonald. Photo: James Brickwood
These assets have been "given away to friends, political supporters and business associates of the minister".
Not only did the Obeids buy crucial land affected by the coal licences, the inquiry has revealed they used inside information to strike deals with potential licence bidders, he said. This ensured they were to be richly rewarded on both sides of the deal, the inquiry heard.
Eddie Obeid was the most powerful and influential figure in the ALP in NSW for the past 20 years.
Labor kingpin ... Eddie Obeid. Photo: Peter Rae
The ICAC is widening the scope of its explosive investigation into a series of coal leases issued by Mr Macdonald, the disgraced former resources minister.
"Brace yourselves," Mr Watson warned when he began his formal opening: "This could take most of the day."
The Commissioner, David Ipp, QC, had earlier given notice to the widening, which means the inquiry will now also examine how it was that the Obeid family and its associates purchased a series of farms in 2007 and 2008 which were in the vicinity of a key coal licence area.
Mr Watson began by outlining the complex and extensive corrupt network that allegedly disguised its operations to secure profits worth "hundreds of millions of dollars". Its principals are allegedly Mr Obeid and Mr Macdonald.
Mr Watson told the inquiry this morning that just one of a number of coal deals being examined by the ICAC, dating from 2008 and 2009, was designed to secure $60 million profit for the Obeid family, which had invested just $200,000.
"In all, decisions taken or influenced by Ian Macdonald may have enabled Eddie Obeid and his family to acquire profits in the order of $100 million," Mr Watson said.
Mr Ipp said the inquiry would also examine whether Mr Macdonald or his staff "provided confidential information ... to members of the Obeid family", and whether they then used that information to their own benefit.
Mr Obeid has declared he will be found innocent of the allegations of corruption levelled against him and his family by a big corruption inquiry.
This morning he told the Herald he would be "f---ing vindicated".
"I have been looked inside out with a microscope up my arse and everything is clean as far as I am concerned," he said.