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Three more Obeid family businesses under ICAC -

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DAVID MARK: The New South Wales Independent Commission Against Corruption, is once again looking at the business dealings of the former ALP (Australian Labor Party) powerbroker Eddie Obeid.

Just months ago the same commission found his conduct in the handling of coal licences was corrupt.

The new investigations will focus on three Obeid family interests: restaurants at Sydney's Circular Quay, water licences on their Bylong Valley farm, and a company that claimed to be able to cut public service sick leave.

Along the way the Commission will examine the conduct of Mr Obeid and his family, at least two senior public servants, and four former ministers Mr Obeid lobbied for changes that would have financially benefited him.

Tim Palmer has been at the inquiry's first day.

Tim, the last ICAC hearings became one of the must-have tickets in Sydney, I presume the hearing room was full again. What did it hear?

TIM PALMER: Not quite the queues that coincided with Mr Obeid's last appearances. Perhaps that will come later when some of the big names appear.

Today it was an opening by the counsel-assisting, Ian Temby QC, a big name I guess at the Independent Commission Against Corruption, seeing he first was the commissioner there.

But he led into three investigations, and let's start with these restaurants at Circular Quay that no-one seemed to know belonged to the Obeids. An Obeid family company, but in the words of Ian Temby, not transparently so.

In fact, it was Mr John Abood, who's Eddie Obeid's brother-in-law, but obviously not an Obeid name, who was, in his own words, fronting Circular Quay Restaurants, the company, that owned two $1 million restaurants down there at Circular Quay, one of Sydney's busiest tourist spots. Although he later said that when he said "fronting" he meant fronting the business, not a front for the Obeids.

Anyway, when the Government pressed ahead with plans that these leases down there, worth quite a bit of money, would have to be turned over every five years to expressions of interest, and there would be no preference to the current lessees, they were desperate to do something.

What happened next was a series of letters, phone calls and meetings, and lobbying in particular by Mr Obeid of four consecutive ministers.

DAVID MARK: And this was while he was an MP, so they were his colleagues.

TIM PALMER: Quite. They were colleagues these ministers, including Michael Costa and Joe Tripodi, who were very closely allied to his faction. And in the end, what do you know? The idea of open competition was quietly dumped. And instead, direct negotiation with the current lessees, exactly what the Obeid company would have wanted, was adopted.

But you have to note that not one of those ministers was told by Eddie Obeid that he owned the restaurants down there. And he was asked in a separate secret hearing just a few months ago preceding this inquiry; "Do you think you should have?" And he said, "No, because that would have put pressure on them. I believe they had to treat the issue on its merits."

DAVID MARK: Now Tim I mentioned the Bylong family farm earlier in my introduction. That was the family farm that we heard so much about in the last ICAC inquiry. Now this time it's going to be examined but for a different reason?

TIM PALMER: That's the very same patch of land. And, of course, what they were interested in before were the hundreds of millions of dollars worth of coal that lay under the farm. This time, much less monetary value, but it's about the water on top of the ground.

They, at the time when water licences became valuable, they obviously decided well it was worth looking in to what they could get there too. And so they approached departments asking, or through intermediaries it would appear from what the commission has led, asking about what the water licences would be, what volume of water. And the pressure was put on. At some stage it appears they were issued licences that were significantly more than anyone else in the Bylong Valley, despite the fact that they never had to demonstrate what sort of agriculture activity or use of water they'd had.

So they weren't even happy with that grant initially, but they came to accept it, because it looked like it might be overturned if they kept being pushed by people in the department for more details on what they were using the water for.

But this will certainly go to the top of the departments involved here. And again, look at whether there was improper influence over those agencies.

DAVID MARK: And Tim Palmer I understand the commission will also hear that Eddie Obeid had a hand in possibly ruining the career of a junior public servant. What's the story there?

TIM PALMER: Well certainly the Obeid family interests, because while Eddie it seems was managing this investigation of what they could get in terms of water, a woman named Sue Heaney, who was involved, she was tasked to find out the history of the water usage on the farm.

And very simply, at one stage when they thought they already the deal done, that they were going to take the higher water grant, she had rung Damien Obeid, they'd had an acrimonious telephone conversation. The suggestion here is that the same people, the same senior public servants and mid public servants that the Obeids might have been dealing with over this issue to win a benefit in terms of the value of their water licence, may have acted to suspend and then discipline this woman who then subsequently took redundancy and left the public service.

DAVID MARK: And Tim Palmer, very briefly, how long will the inquiry run for?

TIM PALMER: It's set down certainly for the next few weeks but because there are three parts to it, it's not quite set down in concrete yet.

DAVID MARK: Reporter Tim Palmer.