Kate McClymont Senior Reporter
March 4, 2013
Two vital witnesses who have previously been unavailable are due to appear at ICAC this week.
Former ALP minister Ian Macdonald. Photo: Rob Homer
It was Saturday morning and classical music was floating through solicitor John Gerathy's multimillion-dollar waterfront apartment in Woolloomooloo. ''You have got me at an inopportune moment,'' said Gerathy when he picked up the phone. ''I have got some guests here at home. They've come to visit,'' he said.
Only last month, the Herald revealed that Gerathy, 67, had checked himself into a mental health facility, telling corruption investigators he was too ill to give evidence.
Fang also said that Macdonald was aware of the deal as he had put him in touch with Obeid.
However, the Independent Commission Against Corruption, which has all but finished inquiries in Operation Jasper, will be sitting this week to hear two vital witnesses who have previously been unavailable: Gerathy and the Obeids' accountant, Sid Sassine, who has been overseas.
New witness: John Gerathy. Photo: Kate Geraghty
Gerathy declined to discuss the nature of his illness. When asked if he had recovered, he replied: ''I am not sure about that.'' Would he be giving evidence on Tuesday? ''Oh, well, I, ah, I hope so,'' he said.
As disgraced minister Ian Macdonald's business partner, Gerathy has been described as a ''crucial witness'' in the state's most sensational corruption inquiry, which is keen to know why Gerathy bankrolled Macdonald to the tune of $550,000 and why documents in Gerathy's handwriting appear to suggest that Macdonald stood to receive up to $4 million from the allegedly crooked government coal tender which had already landed the family of former Labor powerbroker Eddie Obeid $30 million.
Gerathy had already had an unpleasant visit to the witness box, when he was called to give evidence last November. On that occasion he was confronted with the accusation that, in breach of the commission's confidentiality requirements, Macdonald had rung him straight after giving evidence in camera last September.
Eddie Obeid at ICAC. Photo: Edwina Pickles
As a result of that call, Gerathy immediately took action to retrieve a legal file from his old law firm. That file, which the commission has now heard has crucial documents missing, was the file of Alan Fang.
Fang, a Chinese businessmen who was close to Macdonald, was the Obeid family's initial choice to ''win'' the 2008 coal licence tender overseen by Macdonald, the then resources minister.
In 2008, Gerathy was Fang's lawyer when he and Fang met Obeid's son Moses to nut out the details of the sale of the Obeids' land to Fang's company. The Obeids are alleged to have used inside information from Macdonald to buy key properties that would fall within a new coal exploration area that Macdonald planned to announce later in 2008.
Businessman Travers Duncan. Photo: Mick Tsikas
Fang, who followed Eddie Obeid into the ICAC witness box last month, dropped a bombshell when he revealed that in June 2008, before the government announced it was going to call for tenders for exploration licences for new mining areas, he discussed going into a mining joint venture with the Obeid family and that he spoke to Eddie Obeid in his office in Parliament House about this. He also said that Macdonald was aware of the deal as he had put him in touch with Obeid.
But only a week after Fang met Obeid, the press gallery veteran Alex Mitchell might have inadvertently scuppered the deal with the Obeids when he wrote a story titled: ''NSW mining minister and the mysterious Mr Fang''.
The story detailed how only weeks earlier the mysterious Fang had chartered an executive plane to fly Macdonald and other government officials to various meetings during their visit to China.
Recommendations on Sid Sassine's website, before they were removed.
Gerathy, who was appointed by Macdonald to two government bodies, including the Wine Council, knew he would have to give further evidence when counsel assisting, Geoffrey Watson, SC, said: ''I'm afraid Mr Gerathy cannot be excused [from his summons]. He'll be required later in the inquiry.''
Also due in the witness box on Tuesday is accountant Sassine, 47.
As the saying goes: with friends like these, who needs enemies? Sassine, born in the same Lebanese village as Eddie Obeid, 69, has been the family accountant since Obeid parted ways with his former accountant in 2002, having accused him of being responsible for the 154 errors in Obeid's parliamentary pecuniary interest declarations.
"We have known Sid Sassine for the past 10 years or so both professionally and socially. Sid … has accomplished miracles with our accounts - where others before him have failed … We would recommend SJ Sassine to any potential client,'' enthused Obeid's sons Moses and Paul on Sassine's website.
But the Obeid boys' tribute to Sassine's ability to perform miracles has disappeared from Sassine's website since allegations before the ICAC that the family was corruptly rewarded with a $30 million payment due to a rigged government coal tender.
The commission has also heard that Sassine helped channel the millions of dollars from the coal deal through a complex series of family trusts which has enabled the Obeids to live lavish lifestyles while paying little or no tax.
The allegedly tainted money has been used by the Obeids for luxury cars, holidays and to buy a string of multimillion-dollar houses for many of Obeid's nine children.
A good example of Sassine's miracles with finances is Sam Achie. Achie, who is married to Obeid's daughter Fiona, earns a meagre $55,000 as the financial controller for the family company Obeid Corporation.
Despite having a dependent wife and five children, the Achie family bought a $1.4 million house in Hunters Hill and is about to embark on a million-dollar renovation.
Moses Obeid and his wife, Nicki, have a combined taxable income of $180,000, yet they live in a $4.5 million house in Vaucluse with annual mortgage repayments of $210,000, exceeding their combined incomes. They drive Range Rovers and still have money left over to employ household help.
But the Obeids are not the only clients of Sassine's whose ringing endorsements have been removed from his website.
Richard Bamford and Simon Feldman previously had ''no hesitation in recommending SJ Sassine & Co''.
Unfortunately, Feldman is in jail, having stolen $17 million from the Specialty Fashion Group, which includes the Katies chain. The NSW Supreme Court heard Feldman siphoned most of the money to ''prop up'' three private businesses he ran with Bamford. Sassine was the accountant to these businesses but there is no indication he was aware anything was amiss. And Bamford is similarly unavailable, since he is on the run. His companies were found liable by the courts to repay the $17 million stolen by Feldman but the prospects of recovery are slim since Bamford was last seen in December 2011, when he boarded a flight to Japan. There is a warrant out for his arrest.
Apart from Sassine's substantial involvement in property development, including buying land from government departments such as the former Roads and Traffic Authority and the housing department, he has also assisted the Obeid family to hide its interests in a variety of businesses.
Using companies that appear to be controlled by Sassine but in reality are owned by the Obeids, the Obeids have been able to disguise their interests in a health company that won government contracts, a childcare business, a maintenance company as well as a development company run by Obeid associates Ross and Rocco Triulcio.
Using Sassine's company Equitexx, the Obeids also had a stake in Blackwall Point Developments which in 2004 paid $10.48 million for industrial land in Abbotsford, in Sydney's inner west. This was rezoned residential and on sold two years later for $17.4 million.
The purchasers were the Obeids' good friends, developers Brian and Gary Boyd. The ICAC has heard the Obeids tried - unsuccessfully - to interest the Boyds in the coal venture now before ICAC. The Obeids' partners in the Abbotsford sale were Eddy Chahine and Wally Wehbe.
In 2003 Chahine paid Obeid's youngest son, Eddie Jnr, a $50,000 ''spotter's fee'' for bringing to his attention an old bowling alley on Liverpool Road, Enfield. A subsequent ICAC inquiry heard that it was highly likely that Chahine's business partner in the development, Anne Bechara, had received inside information that the Labor-dominated Strathfield Council, whose mayor was Eddie Obeid's former business partner John Abi-Saab, was about to rezone the land.
This would have delivered Chahine and Bechara a motza, but Labor lost power and it didn't happen. Bechara, also a friend of the Obeids, was later sentenced to four months' imprisonment, which she served as home detention, for lying to the ICAC.
A jury acquitted Abi-Saab of blackmail but he received a suspended jail term after pleading guilty to conspiring to give false evidence to ICAC.
When Herald journalist Anne Davies first revealed Eddie Jnr's $50,000 payment, Obeid delivered a stinging rebuke in Parliament for trying ''to insinuate there was anything improper in any of my children … going about their business earning money in the way they know best''.
He concluded his attack by saying: ''Implicating me or my family in anything to do with rezoning, land deals, or councillors is totally wrong. It is disgraceful journalism.''
