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Former Labor ministers found to be corrupt: ICAC

Labor powerbroker Eddie Obeid and former mining minister Ian Macdonald could face possible criminal charges after the NSW watchdog found they acted corruptly.

Former treasurer Eric Roozendaal was not found to be corrupt.

The reports were handed down today by the Independent Commission Against Corruption after months of investigations.

Commissioner David Ipp has recommended that Mr Obeid and Mr Macdonald be considered by the Department of Public Prosecutions (DPP) for possible prosecution over their involvement in the Mount Penny coal mine.

Mr Obeids' son Moses and businessmen Travers Duncan, John McGuigan, John Atkinson, John Kinghorn and Richard Pool were also found to have engaged in corrupt conduct.

It enabled the Obeids to make $30 million, with the prospect of earning at least $70 million more.

As part of the Indus investigation, ICAC found Mr Obeid's son, Moses, engaged in corrupt conduct over a $10,800 car for former Labor minister Eric Roozendaal.

The corruption watchdog investigated whether Mr Roozendaal received a new Honda CRV at $10,800 - less than its original value - in return for political favours for his colleague, Eddie Obeid.

The ICAC reports said that Moses Obeid "provided a benefit to Mr Roozendaal as an inducement for him to show favour to Obeid business interests in the exercise of his official functions".

"Deliberately untrue evidence"

Commissioner David Ipp was scathing of the conduct of Mr Obeid and Mr Macdonald.

He called Mr Macdonald an "unsatisfactory witness" who gave "deliberately untrue evidence".

Mr Obeid was "an aggressive witness and seemed to be more concerned with imposing his will on the proceedings than simply telling the truth," Mr Ipp said.

The commissioner also said that Moses Obeid was "willing to lie or mislead whenever it suited his purpose".

He was found to have given four counts of false testimony.

Mr Ipp has recommended the DPP consider prosecuting Mr Macdonald after it found he rigged a 2008 tender process to grant a coal licence over land at Mount Penny owned by the Obeid family.

It enabled the Obeids to make $30 million, with the prospect of earning at least $70 million more.

ICAC recommended the DPP consider charging Mr Macdonald with conspiracy to defraud and misconduct in public office.

The Obeids were also recommended to each be considered for conspiracy to defraud.

In response the Obeids called the ICAC report superficial and biased.

"I reject the assertions by the commissioner that I acted in any way that could amount to corrupt conduct," Mr Obeid said in a statement, issued less than an hour after the ICAC findings.

Both he and his son have indicated they would fight the allegations through the courts.

A number of high-profile businessmen also face adverse findings over their involvement in Mount Penny.

They include one of the nation's richest men, Travers Duncan, merchant banker Richard Poole, John McGuigan, the former global head of law firm Baker & McKenzie and John Atkinson, a former partner at the firm.

The consortium of investors in Cascade Coal - in which the Obeids had disguised their 25 per cent stake - won the right to explore for coal at Mount Penny.

Each of them have also been recommended for possible prosecution for the offence of obtaining financial advantage by deception.

Mr Roozendaal said the ICAC had cleared him and restored his reputation.
"I am glad we can move on now," he said.

Corruption "unexceeded since the days of the Rum Corps"

Prior to the findings being released, counsel assisting Geoffrey Watson warned that if proven, this was "corruption on a scale probably unexceeded since the days of the Rum Corps".

During the investigations, Mr Macdonald was forced on one occasion to deny he was a "crook", Mr Obeid retorted on another that he had "spent more money than (Mr Watson had) made in a lifetime", and the proceedings proved so sensational that curious members of the public began queuing outside the seventh-floor ICAC hearing room, deck chairs in hand.

Operation Jasper unearthed allegations Mr Macdonald rigged a 2008 coal tender process, benefiting the Obeids to the tune of tens of millions of dollars.

Operation Jarilo heard allegations that ex-boxer Lucky Gattellari and businessman Ron Medich offered Mr Macdonald rewards or inducements - including the services of a prostitute called Tiffanie - to arrange meetings with state energy executives.

It's expected to take the commissioner until at least August to deliver findings on a fourth operation - Acacia - which probed a coal exploration licence granted by Mr Macdonald to a company run by ex-union boss John Maitland and entrepreneurs.

Commissioner Ipp will also consider whether the NSW government should amend mining laws and codes of conduct for MPs and ministers.

Former NSW Labor minister Ian Macdonald arrives at the Independent Commission Against Corruption on May 16, 2013. Photo: AAP
Former NSW Labor minister Ian Macdonald arrives at the Independent Commission Against Corruption on May 16, 2013. Photo: AAP

"Jail ex-Labor MPs if guilty"

NSW Opposition Leader John Robertson says he wants former colleagues Eddie Obeid and Ian Macdonald to serve prison time if they are found to be guilty of corruption by the courts.

Mr Robertson said he had been disgusted by the evidence that came out of ICAC.

"What we have seen is an appalling abuse of public trust to advance personal interest," he told reporters.

"I want to see these people prosecuted and feel the full brunt of the law, and if found guilty serve time."

Mr Robertson called on NSW Premier Barry O'Farrell to appoint a special prosecutor to take the matters through court.

"No stone should be left unturned and no effort should be reserved in ensuring we see all of these individuals feel the full brunt of the law before our court system," he said.

Mr Robertson said Mr Obeid and Mr Macdonald had "used and abused public trust in the position they held under the banner of the Labor party".

"I have nothing but disdain for their actions and each of them," he said.

Asked if Labor could come back from (the) findings, which Mr Robertson himself acknowledged were damning, he replied: "This is a party that has got a proud 120-year history. The reforms that I have put in place will ensure that we never have people like this in our party again.

"Of course, with hard work and continued efforts we will come back from this."

ICAC "exposed rotten Labor"

Federal Opposition Leader Tony Abbott says the NSW corruption watchdog has exposed the rottenness at the heart of Labor.

He's also called on the Prime Minister to "come clean" about all the dealings he or his MPs have had with Eddie Obeid and Ian Macdonald.

"Today is a black day in the history of the Labor party," Mr Abbott told reporters in Sydney.

Mr Abbott said the federal Labor party was dominated by the NSW machine.

"The ICAC has exposed the rottenness at the heart of the NSW Labor Party and the rottenness at the heart of the Labor party nationally," Mr Abbott said.

'Zero tolerance' for corruption

Prime Minister Kevin Rudd says he's been disgusted by the behaviour alleged during a NSW corruption inquiry and any Labor members involved in illegal activity should face the full force of the law.

The NSW Independent Commission Against Corruption (ICAC) will on Wednesday hand down reports into disgraced former members of the previous NSW government, including Labor powerbroker Eddie Obeid.

"My view is very simple - anyone who is responsible for corruption or illegal behaviour should face the full force of the law," Mr Rudd told reporters in Sydney on Wednesday.

Mr Rudd on July 4 gave the NSW Labor branch 30 days to put in place anti-corruption reforms, triggering the first ALP federal intervention in four decades.

He said he expected the reforms to reflect "zero tolerance" of corruption.