Apart from Julia Gillard’s personal unpopularity, an issue which has dragged down Labor’s standing in the polls has been the revelation from the New South Wales Independent Commission Against Corruption (ICAC) that former NSW Mining Minister, Ian Macdonald, secretly assisted a Labor upper house member, Eddie Obeid OAM, to secure mining leases worth $100 million in 2008.
The senior counsel assisting the ICAC inquiry, Geoffrey Watson SC, described the allegations as “on a scale probably unexceeded since the days of the Rum Corps” in the early 1800s.
Macdonald and Obeid have repeatedly denied the claims; but incriminating evidence has come from a series of witnesses, as well as from documents seized by ICAC investigators.
The repeated denials of improper conduct, followed by contradictory evidence presented to ICAC, have ensured that the affair has continued to make headlines in the newspapers and on television.
It is also alleged that some senior public servants covered up the circumstances of the issue of mining licences by Mr Macdonald, by hiding relevant documents which had been sought by the Liberal opposition under freedom of information laws some years ago.
The ICAC inquiry is due to report late in July, meaning that the affair will continue to dog the NSW Labor Party in the run-up to this year’s federal election.
The issue, however, is far wider than NSW mining leases. One question is why successive state Labor governments gave apparently unfettered power to ministers to do whatever they liked.
Ian Macdonald was a senior figure in the NSW Labor left faction, and Obeid was a power-broker in the NSW Labor right, both of whom served as ministers in the state government led by the present Foreign Minister, Senator Bob Carr. Obeid played the role of “kingmaker” in the elevation of three later NSW premiers, Morris Iemma, Nathan Rees and Christina Keneally.
Both Obeid and Macdonald acquired their power through the NSW Labor factional system, and there is evidence that the factional system protected them from both public and parliamentary scrutiny for years.
Both of them retired from parliament following repeated allegations of improper conduct; but many of their close colleagues are still there, and many people consider that the “cover-up” culture continues to the present day.
ABC journalist Marian Wilkinson produced an ABC television Four Corners special on March 13, called “The Enemy Within”, detailing the rise of Eddie Obeid as a NSW Labor powerbroker.
The program contained titillating accounts of how Obeid was able to manipulate the numbers inside the NSW right, to the point where he was “bending parliamentarians to his will and ultimately making and breaking premiers”.
Wilkinson said, “The most important question tonight is how it’s possible for a government in Australia to be so manipulated from within to such an extent for so long.
“It’s a question that must be giving the Prime Minister Julia Gillard nightmares as she prepares for a massive backlash from New South Wales voters at the federal election in September.”
The program included interviews with the Foreign Minister, Bob Carr, and former NSW premier, Morris Iemma, both of whom attempted to put as much distance as they could between themselves and Obeid.
However, as other commentators have noted, Carr played a key role in Obeid’s promotion into the ministry. Commentator Ben Eltham wrote, “Many of the people claiming to have been bitter opponents of Obeid’s rise through the party are the very same ones that promoted him.
“Carr is one of them. As journalist Alex Mitchell pointed out yesterday, Carr was instrumental in Obeid’s appointment to Carr’s first ministry in 1999. Carr convened the factional meeting that put Obeid’s cabinet spot to a vote. And then, according to Mitchell, Carr voted for Obeid himself.
“Like much of what Carr told Wilkinson, the idea that the former premier was swept unwillingly along by the irresistible force of Obeid’s factional strength doesn’t pass the smell test. Carr was a part of the same broad faction as Obeid.” (New Matilda, March 12, 2013).
A curious part of the ABC exposé is that Marian Wilkinson, a left-wing journalist, made no mention of Ian Macdonald’s left-wing factional alignment. She also featured leading NSW left-wing powerbroker, Senator John Faulker, as an apparently independent critic of both Macdonald and Obeid.
One wonders whether the exposé may have been part of the ongoing factional warfare within the NSW ALP.
Attention has now turned to the wide range of political and business contacts with whom Obeid had dealings while he was a member of the NSW upper house.
Eddie Obeid’s diaries from 2007-09, submitted to the corruption inquiry, reveal that a long succession of business leaders, politicians, public servants and property developers met him in his parliamentary office, at his family’s business office, or at various restaurants.
The current NSW corruption scandal will undoubtedly damage the reputation of the NSW Labor Party for years to come.