12 Nov 2012

Contracts reminiscent of 'Rum Corps' - Australian inquiry

10:40 pm on 12 November 2012

A corruption inquiry in Australia has heard the awarding of mining contracts to friends of former state Labor Party ministers robbed New South Wales of assets worth hundreds of millions of dollars.

In his opening address to the Independent Commission Against Corruption, Counsel-Assisting Geoffrey Watson SC said the level of alleged corruption had not been seen since the days of the Rum Corps in the early years of European settlement, reports the ABC.

He was speaking at the opening of the second stage of the inquiry into three ministers in the former New South Wales Labor government.

Operation Jasper is examining a decision by former primary industries and mineral resources minister Ian Macdonald to open a mining area in the Bylong Valley, in the Upper Hunter Valley, for coal exploration.

Mr Watson said the inquiry was looking at whether tendering information was leaked to the family of another former minister, Eddie Obeid.

"We will examine how it came to pass that massive benefits were lost to the people of New South Wales while the profits were ultimately acquired by a small group of well-connected businessmen on the back of comparatively paltry investments," he said.

"In all, decisions taken or influenced by Ian Macdonald may have enabled Eddie Obeid and his family to acquire profits in the order of $A100 million," the ABC reports.

The Rum Corps was the nickname given to the 102nd Regiment of Foot, or the New South Wales Corps, the British regiment charged with maintaining order in the early days of European settlement.

It became synonymous with corruption in the fledging colony and got its nickname because of its stranglehold on the importation of alcohol.

The public inquiry is likely to run until December.