Former NSW Labor MPs allegedly conspired over mining properties in Bylong Valley, near Mudgee

This article is more than 7 months old

This article is more than 7 months old

The federal opposition leader, Anthony Albanese, a former New South Wales premier, Morris Iemma, mining figures and public servants are expected to give evidence in the trial of former mining ministers Eddie Obeid and Ian Macdonald.

The former state Labor MPs – with Obeid’s son Moses, 50 – are being tried in the NSW supreme court over their alleged conspiracy to commit an offence between 2007 and 2009, when Macdonald was mineral resources minister and the Obeids owned land in coal country.

Prosecutors allege Macdonald used his role to grant a coalmining exploration licence at Mount Penny in the Bylong Valley, near Mudgee, after the Obeids bought property and tried to do deals with mining companies.

Each accused has pleaded not guilty.

Eddie Obeid: disgraced former NSW Labor minister released from prison Read more

The crown prosecutor, Sophie Callan, on Wednesday said the court would hear evidence from Iemma about the close working relationship and friendship between Macdonald and Obeid.

That bond came despite the pair – who both spent two decades in office – coming from opposing factions, Callan said in her opening address.

Macdonald was in his final term in office and was motivated to “favour and repay” Obeid for past support and “seek positive treatment after he left political office”.

The court heard his retirement was agreed upon during a meeting of senior NSW Labor figures, including Albanese, at a Sydney Chinese restaurant before the 2007 election.

Albanese’s office has confirmed he will appear as a crown witness.

The prosecutor laid out nine planks to her case that Macdonald wilfully misconducted himself in public office.

In May 2008 Macdonald sought information from the primary industries department on coal reserves at Mount Penny and the prospect of it being released for tender, the crown alleged.

He allegedly gave confidential maps produced by public servants to a member of the Obeid family and later advised the department to reduce the exploration area at Mount Penny to fall within the criteria for “small” projects.

Macdonald later asked for a list of small coal companies interested in operating in the Bylong Valley and either handed over or read out the list during a meeting with Moses Obeid in mid-2008, she said.

Meanwhile, the Obeids allegedly began negotiating the purchase of Mount Penny properties and pursued joint ventures with mining companies from late 2007.

One property, Cherrydale Park, was bought for $3.65m.

Another, Coggan Creek, was bought by a friend of Moses Obeid for $3.4m with an agreement that upon its sale “30% of the profits ... would go to Obeid interests as a fee”, Curran said.

“[The acts were] all done to yield significant financial returns,” she said.

“[At the time Macdonald was mineral resources minister] coal prices were escalating rapidly around the world and, as a result, had real revenue potential.

“This was at a time that the government was otherwise under significant budgetary strain.”

A total of 53 crown witnesses are due to be called in the five-month trial before Justice Elizabeth Fullerton.

Journalists and staff from the Independent Commission Against Corruption would speak of their investigations into the two former MPs.

Several Labor party figures, former department employees and a former deputy chief of staff in Macdonald’s office are also due to be called, as are a forensic accountant and a handwriting expert.

Macdonald, 70, served in the NSW upper house from 1988 to 2010 and held many ministerial portfolios in his later years.

Obeid, 76, ended his two-decade parliamentary career in 2011 and is father to nine children.

Curran is due to resume her opening address on Thursday.