Sixteen years after the family of jailed politician Eddie Obeid received a secret payment of $30 million relating to a corrupt coal deal, the all-powerful NSW Crime Commission has finally launched a legal bid in the NSW Supreme Court to seize the proceeds of the crime.
In the lead-up to the 2009 announcement of the winning bidders of a coal exploration covering the Obeid’s property in the Bylong Valley, then mining minister Ian Macdonald leaked confidential information on the tender to his colleague Eddie Obeid.
Using this information, the Obeid family negotiated a 25 per cent stake in the winning bidder, Cascade Coal.
The following year, the Obeids negotiated to sell their stake for $60 million. The family had only received the first half of the $60 million when rumours about their corrupt involvement began to surface.
A subsequent investigation by the Independent Commission Against Corruption traced the flow of their family’s ill-gotten gains through a complicated series of trusts.
Obeid, 82, and his son Moses, 57, were both jailed, as was Macdonald. Despite their criminal convictions, the Obeids were able to keep the proceeds of their $30 million crime.
Only last year, then NSW Crimes Commissioner Michael Barnes said that pursuing a criminal confiscation case against Obeid and his family was not feasible.
He said the money had been filtered through a series of discretionary family trusts and mingled with lawfully obtained money, making recovery of the corruptly obtained cash impossible.
Barnes acknowledged that this was a “disappointing” outcome given that Obeid’s crimes were “outrageous” and the public had a right to expect that any proceeds from his crimes should be confiscated.
However, since that announcement, legislative amendments removing a six-year limit on recovering proceeds of crime allowed the Crime Commission to use its coercive powers to uncover new evidence.
Three of Obeid’s five sons – Paul, Damian and Eddie Jnr – are currently directors of Obeid Corporation, the company being pursued by the Crime Commission. In March, the Crime Commission placed caveats on numerous properties connected with the Obeids, one of which is the former site of the Bellevue Function Centre.
The Bellevue building, on South Terrace in Bankstown, remains a reception venue and has recently been rebranded as La Castelle.
“With a rejuvenated aesthetic and captivating renovations, we proudly unveil La Castelle as Sydney’s foremost wedding and event destination,” its website boasts.
In January, a Herald investigation revealed that the family of the disgraced former politician had concealed a secret share worth up to $30 million in the Bellevue site, which the government had earmarked for a 20-storey high-rise next to the new metro station, due to open later this year.
Email chains, confidential documents and financial records show an Obeid family trust fund transferred its 50 per cent stake in the company, which owned the site, to colourful businessman Walhan “Wally” Wehbe, a long-term associate of Eddie Obeid.
Wehbe held the site on privately agreed terms, stating that 50 per cent of the income from the site would flow into an Obeid family trust, according to legal advice given to representatives of the Obeids and Wehbe.
The Herald understands the asset freeze caught the Obeids and Wehbe by surprise as they had lined up a buyer for the property.
Since then, the parties have held a number of crisis meetings, including one at Ace’s Ocean Foods, a seafood restaurant in Padstow. Attending were a representative of Obeid Corporation, Wehbe and several associates, including businessman Joseph Bouchaaya, who has previously been a source of funding for the Obeids.
When Eddie Obeid was first jailed in 2016 over corrupt deals with Circular Quay cafe leases, Wehbe provided a character reference.
Writing on behalf of the Australian Lebanese Christian Foundation, Wehbe said: “Our member [sic] and executive have always found Mr Obeid to be open, honest, generous and genuine”.
The ALCF, which was founded by Obeid in 1986, has had a chequered history. The other founding members were Hani Taouk, a brothel owner who was jailed for trying to bribe a judge, John Abi-Saab and Michael Sakloui, both of whom were found to be corrupt by the ICAC after they bribed the then mayor of Strathfield, Alfred Tsang.
Federal Court Justice Ian Sheppard in 1986 said: “Mr Wehbe is dishonest or otherwise not of good character.”
The judge ordered leases Wehbe had on two Caltex petrol stations be terminated because he knowingly participated in the receipt of stolen distillate on a number of occasions. The Full Court dismissed Wehbe’s appeal.
Criminal charges against Wehbe were later dismissed. At his 1986 committal hearing, a sacked Caltex driver refused to say why he delivered diesel fuel to Wehbe’s service station instead of the State Rail Authority, nor would he say whether he had received a benefit or reward from the delivery.
Representing the Obeid family in the confiscation of assets case is solicitor Nick Di Girolamo, the former chief executive and chairman of Australian Water Holdings. An ICAC inquiry found the Obeid family agreed in 2010 to buy a secret $3 million stake in AWH.
As a result of the ICAC inquiry, three former ministers Obeid, Tony Kelly and Joe Tripodi were criminally charged over the alteration of a cabinet minute – which, if accepted, would have delivered at least $60 million into the Obeid family coffers through their shareholding in AWH.
Criminal charges against the three former politicians were later dropped.
The proceeds of crime matter will return on May 11.
