The truth starts to emerge!

When Peter Phelps read in this space last week about the latest incident involving the NSW Independent Commission Against Corruption, he was intrigued.

Thanks to a threat of defamation proceedings by former ICAC commissioner David Ipp, this newspaper was only able to provide the barest outline of serious accusations that are being considered by ICAC’s independent Inspector, Bruce McClintock.

Phelps, a Liberal member of the NSW Upper House, was curious and looked into this affair before making a statement in parliament that cannot be ignored.

He accused Ipp of deliberate deception and said parliament may have been misled into enacting legislation by ICAC and former premier Barry O’Farrell. This, he said, had caused a great injustice to businessmen John McGuigan and Richard Poole as well as their associated company, Cascade Coal Pty.

Based on the ICAC’s Jasper report, the Coalition government then led by O’Farrell enacted legislation expropriating a coal exploration licence from Cascade Coal that was worth at least $300 million.

The same report made corruption findings against McGuigan and Poole that ICAC later conceded had no legal basis but which remain in force thanks only to retrospective legislation enacted under O’Farrell’s successor Mike Baird.

Phelps didn’t stop there. He told the Legislative Council that Ipp had consultations with O’Farrell during the course of the Jasper inquiry and simply gave the premier the outcome he sought.

O’Farrell declined to provide his perspective on the Phelps statement and Ipp, who was also invited to provide a response, has not done so.

What follows is an edited version of the Phelps statement:

“I am concerned that we as a party and as a parliament may have been misled into enacting three different acts of parliament on the basis of misinformation, deliberate deception and perhaps even gross maladministration by the ICAC,” he said. “A particularly great injustice has been done to John McGuigan, Richard Poole and Cascade Coal Pty Limited.

“Three bills arose as a result of the Jasper inquiry … The problem with this, and the problem with the statements in the second readings, it appears he (O’Farrell) had prior consultations with then Commissioner Ipp so that he could get the very outcome he sought.

“In late 2012 the planning minister found that exploration licences could not be terminated under the existing legislation. On 30 January Mr O’Farrell wrote to Commissioner Ipp, indicating that the NSW government would welcome any findings and recommendations the commission might see fit to make, including recommendations under the Mining Act, recommendations with respect to amendment of the Mining Act and recommendations concerning legal proceedings against any individual or company surrounding the allocation of exploration licences.

“The following day this was apparently acted upon, because Mr McGuigan was cross-examined in the public hearing and at that stage the commissioner, for the first time ever, indicated the possibility that there might be an expropriation of the licences.

“Liberal Party members have very strong views about the sanctity of property rights but in those three bills we essentially removed the property rights of people who had a legitimate claim to them at that stage.

“The interaction by the then Premier with Commissioner Ipp is of grave concern to me. The final report of the ICAC provided no evidence whatsoever of corruption in the granting of licences.

“There was the possibility of corrupt activity in the creation of the Mount Penny licence, but no allegation was raised about the granting of the licence.

“Instead, the commission relied on testimony from a gentleman by the name of Gardner Brook. After the discovery of a number of issues it turns out that Gardner Brook is, as revealed in his own private testimony to ICAC, a self-confessed liar and a fraud.

“Yet this man was given the white hat by ICAC and it was suggested repeatedly that his evidence was of a credible nature.

“If all this sounds familiar it is because exactly the same thing happened in relation to (former Liberal police minister) Mike Gallacher, where Hugh Thomson — probably the person most responsible for taking illegal donations — was given the white hat by ICAC on the basis that he would set up other people in his testimony.

“ICAC used Gardner Brook in exactly the same way. The bills were justified on the basis of a gross maladministration by the ICAC,” Phelps told parliament.

“It must be remembered that Cascade Coal did not win the initial tender; the initial tender was won by Monaro Mining. Gardner Brook was a key involved person in that company.

“Gardner Brook and Monaro Mining promised the state government $25m, and when they could not deliver it the officials — not the corrupt ministers — contacted Cascade Coal and asked that company, as the runner-up, if it would like to take over the bid.

“What we have here appears to me to be gross maladministration by ICAC. Even more importantly, I believe we may have been misled by the then Premier into introducing and passing three bills that have expropriated a property right completely unjustifiably.”


Chris Merritt

Legal Affairs Editor – The Australian

(WTF) – used with permission.

One thought on “The truth starts to emerge!

  1. It is pretty clear that the NSW Parliament was misled. If they had been given the correct material and enough time to properly understand what they were being asked to vote on – there is no way they would have voted for the legislation.

    It would be amazing if anyone in the NSW Parliament was advised by the ex-Premier O’Farrell that their Act would create a breach of the Australia USA Free Trade Agreement which would leave the Australian Government in the lurch to pay compensation to US shareholders of NuCoal and demonstrate to the entire investment world that NSW was not a place where they should invest their funds.

    As Dr Phelps says – its only a matter of time before the USA makes its presence felt. The USA will not stand by and see their investors treated like second class citizens when investors from China, Korea and many other countries with FTA’s can automatically commence compensation actions. When this happens Federal Members in Australia will see that they are ultimately responsible for the actions of the States and start to put pressure on the NSW Government to fix this.

    More NSW MP’s will hopefully now pick this issue up, force an appropriate Parliamentary Enquiry as to how, why and by whom they were misled, repeal the legislation and compensate NuCoal’s shareholders. This will avoid embarrassing themselves and the Australian Government any further.

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