Eddie Obeid and Ian Macdonald verdict can give clarity on official misconduct

The conspiracy trial of former NSW politicians Eddie Obeid and Ian Macdonald is drawing to a close. And it is already clear that the verdict, whatever it is, will provide guidance for government ministers and public servants about the nature of misconduct in public office.

When the judgment is delivered it should be studied by all those in public life whose decisions confer benefits on the community and identifiable individuals. It could keep them out of prison.

Until two years ago, the law on misconduct in public office was a confused mess. It left ministers and senior public servants vulnerable to unfair criticism and prosecution. They were potentially at risk if an identifiable individual — especially a notorious individual — benefited from a decision of general application.

In February 2019, the confused state of the law was resolved unanimously by a special five-judge panel of the NSW Court of Appeal in a ruling that struck down a conviction against Macdonald and former union leader John Maitland.

The court introduced a “but for” test: If a ministerial decision benefits the community but would not have been made “but for” an illegitimate collateral purpose, the decision-maker has crossed the line and could be heading for prison.

But if the decision would still have been made regardless of any benefit to a particular individual, such conduct does not attract criminal liability.

This set a bright-line boundary that enables the authorities — including the state anti-corruption commissions — to avoid wasting time on conduct that falls short of criminality. This brings us to the current proceedings where the “but for” test is again of critical importance.

Obeid and Macdonald — along with Obeid’s son, Moses — are facing a single indictment alleging they conspired for Macdonald to misconduct himself as minister for mineral resources by doing acts in connection with the grant of a coal exploration licence on property owned by the Obeids.

And he did that, according to the indictment, “without impartiality” and/or “by breaching a duty of confidentiality”.

The indictment does not require the prosecution to prove Macdonald actually engaged in misconduct, merely that there was a conspiracy to do so. So the law on misconduct in public office still lies at the heart of the argument.

The only charge confronting the Obeids and Macdonald is contained in the indictment, not the mountains of evidence that has been presented to the court. And this is where the prosecution is facing a late challenge.

Justice Elizabeth Fullerton has been presiding over this trial for months and it was only on Wednesday that legal argument raised the startling suggestion the indictment at the heart of the prosecution’s case was fatally flawed.

That idea is outlined in submissions by Eddie Obeid’s counsel, April Francis SC, that says the alleged agreement between the Obeids and Macdonald that is referred to in the indictment was not unlawful.

Her closing address draws on the Court of Appeal’s 2019 ruling on the “but for” test and says the indictment fails because it does not outline an offence known to the law.

She argues that it omits essential factual and legal elements of the alleged offence, that the general nature of the alleged agreement means there must be reasonable doubt about whether Eddie Obeid intended it to cover conduct that warrants criminal punishment and whether Macdonald only entered the agreement for an improper purpose.

“If the indictment fails to disclose an offence, the accused are to be acquitted,” Francis told the court.

“It is not for your Honour to decide which of Mr Macdonald’s alleged supposed acts of misconduct are made out and by a process of reasoning therefore give content to the indictment,” she said.

After listening to Francis, Fullerton asked the prosecution to consider during the lunch break whether it wished to make written submissions on Francis’s argument “that it would not be open to me as a matter of law to return a verdict on the basis of a set of factual findings of a general nature”. After the break, the prosecution decided to make no further submissions.

If Fullerton agrees with Francis, and the indictment is flawed, an acquittal is inevitable. Such an outcome would be a catastrophe for the NSW Independent Commission Against Corruption and the special unit inside the Office of the Director of Public Prosecutions that handles ICAC-related matters.

It would mean ICAC’s greatest coup, and all of the publicity associated with its public hearings involving Obeid and Macdonald, would have come to nothing. This would be an even greater humiliation than when the convictions of Macdonald and Maitland were quashed in 2019. Those matters are awaiting retrial.

The publicity stemming from the commission’s Obeid-Macdonald inquiry is an inevitable consequence of its zeal for show trials.

Fullerton is conducting a real trial without a jury to eliminate the risk that potential jurors might have been biased by the immense publicity triggered by the commission’s public hearings.

In 2014, the proceedings of the Samuel Griffith Society included an article by the late Jerrold Cripps, a distinguished former commissioner of ICAC. Cripps, who supported public hearings, nevertheless recognised they can have an adverse impact:

“I do not deny that when public inquiries are conducted involving members of parliament and local government councillors, the media are not as restrained as some people would like to think they should be and that the inquiries run the risk of affecting subsequent criminal trials adversely,” Cripps wrote.

Cripps recognised the problem, but blaming the media will change nothing. NSW has real courts dispensing real justice. There is no need for show trials.

Chris Merritt is vice-president of the Rule of Law Institute of Australia

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