Labor suspends Eddie Obeid; Rees, Iemma to give evidence

Former Labor minister Eddie Obeid has been suspended from the Labor party, as two former Labor premiers prepare to give evidence at the Independent Commission Against Corruption (ICAC) hearing in Sydney today.

New South Wales ALP leader John Robertson moved to have Mr Obeid suspended after the ICAC hearing yesterday heard that taxpayers had missed out on tens of millions of dollars due to a scheme designed to benefit Mr Obeid's family.

Former premiers Nathan Rees and Morris Iemma are due to give evidence at the inquiry today.

Neither man is accused of any wrongdoing, but both have been critical of the power wielded by Mr Obeid during their premierships.

Yesterday the opening day of the inquiry was told that corruption in the state could have been at a level "unexceeded since the days of the Rum Corps".

In a dramatic opening address, Counsel-Assisting Geoffrey Watson SC told the hearing that Mr Obeid and his family may have made $100 million from former mining minister Ian Macdonald's decision to open a mining area in the Byalong Valley.

Former minister Eric Roozendaal has also been suspended from the ALP after an earlier ICAC hearing heard allegations he received a discounted car as an incentive.

Mr Robertson said the allegations that Mr Obeid and his family had profited by as much as $100 million were so shocking and of such gravity that he was forced to act immediately.

He wrote to Labor's head office to request that Mr Obeid be suspended from the party.

"The amount of money being talked is beyond most people's comprehension," Mr Robertson said.

"Last week Oz Lotto was running a $100 million (jackpot) and people were queued up." Yesterday Mr Watson said the inquiry was looking at 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.

The initial investigation has been widened to cover a series of coal leases issued by Mr Macdonald.

It will now also examine why the Obeid family and their associates bought a number of farms near the coal licence area in 2007-2008.

The inquiry heard one of the tenements, Mount Penny, fell directly under a farm owned by Mr Obeid's family.

"We will examine how it came to pass that massive benefits were lost to the people of New South Wales while the profits were ultimately acquired by a small group of well-connected businessmen on the back of comparatively paltry investments," he said.

"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 told the inquiry that the issue of the mining contract could have been either corruption or bad governance.

"If it is corruption, then it is corruption on a scale probably unexceeded since the days of the Rum Corps," he said.

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