Anne Davies March 18, 2013 - 2:44PM
Former minerals minister Ian Macdonald ignored repeated advice from his department that he could not simply grant an exploration licence for a training mine in the Hunter to his close friend, mining union boss John Maitland, the corruption watchdog has been told.
But instead of heeding his department, the minister became a proponent for the mine, and granted the licence without tender, turning Mr Maitland's original $166,000 investment into a $15 million profit.
Opening the third leg of the Independent Commission Against Corruption's inquiry into corruption within the former NSW Labor government, counsel assisting, Peter Braham SC, said the Doyles Creek training mine “was essentially gifted” to a group of investors from Newcastle, including Mr Maitland, who had been a leading figure in the mining division of the Construction, Forestry, Mining and Energy Union.
Ian Macdonald Photo: Edwina Pickles
The result was a “financial disaster for the taxpayers of NSW and a gold mine for the investors”, he told the commission.
“An examination of the circumstances leads to the conclusion that on any view this decision involved real delinquency on the part of the minister in the discharge of his public office,” he said.
The question to be answered by the inquiry was whether there was corruption involved in allocating the exploration licence over the Doyles Creek area.
Mr Braham said Mr Macdonald had himself identified mining exploration licences as “hot property”, yet the process he chose to adopt was “astounding”.
Mr Braham described the concept of a training mine as “puffery and spin”. It had no support from either the industry or the union, which had moved to simulated training, using virtual training facilities.
“As one local resident was quoted saying: this wasn't a training mine; it was a mining mine,” Mr Braham said.
He said the proponents of the mine – entrepreneur Craig Ransley, company director Andrew Poole, Mr Maitland and others – deliberately set about convincing the minister to grant them the licence without going to tender.
The commission heard about a series of lunches and dinners in upmarket restaurants and meetings in Mr Macdonald's office, from which his department was excluded.
“The department's advice that it was a bad idea had been clear and repeated on numerous occasions, both in writing and orally,” Mr Braham said.
When Mr Macdonald decided to issue the invitation for Doyles Creek Mining to apply without tender, his office obtained a template from the department and prepared the letter in his office, keeping the department in the dark.
“This was unprecedented,” Mr Braham said. The department only found out when there were questions from the local media.
When the licence was granted on December 24, 2008, Mr Ransley sent an email to his fellow investors, saying "when you read you will understand why I can't wipe the smile off my face, merry bloody Christmas”.
Mr Braham said it was for the commission to inquire into whether Mr Macdonald was influenced to a significant extent by his personal and political relationship with Mr Maitland, and whether Mr Maitland, Mr Ransley and Mr Poole knew and intended for Mr Macdonald to be so influenced.
The inquiry begins hearing evidence from the first of 60 witnesses on Wednesday. It is expected to run until the end of April.
