Evidence questions Obeid’s pecuniary interest statements
Date January 26, 2013 44 reading now
Kate McClymont, Linton Besser
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Sam Achie leaving the ICAC. Photo: Tamara Dean
FOR years before he left NSW Parliament in mid-2011, the Labor powerbroker Eddie Obeid entered ”not applicable” in the section of his pecuniary interest declaration asking whether he had received income from a trust.
But the accuracy of those declarations is being queried following sensational revelations in a corruption inquiry this week about the millions of dollars which have flowed through six Obeid family trusts, including proceeds to the Obeid family as proceeds from an allegedly corrupt government tender.
The riches which abound in the family’s coffers have also raised questions whether the Obeids were meeting their tax liabilities.
In November 2011, Independent Commission Against Corruption officers raided the Obeids’ Birkenhead Point headquarters as part of their investigations into whether the family made millions of dollars from the allegedly corrupt granting of coal exploration licences by then minister Ian Macdonald in 2008-09.
Among the documents seized was a trust account summary which showed that at the date of the ICAC raid, $18.38 million had flowed through the Obeid Family Trust No 1 to family members.
Giving evidence at the corruption hearing on Wednesday, Mr Obeid’s son-in-law, Sam Achie, the financial controller of Obeid Corporation, agreed that the $18 million was given to Mr Obeid, his wife and nine children as loans rather than distributions because no tax is payable on loans.
Mark Leibler, senior partner at Arnold Bloch Leibler, told Fairfax Media: ”There is nothing strange about trusts lending millions of dollars to beneficiaries.”
Referring to the $18 million received by Obeid family members, Mr Leibler said: ”Well someone must have paid tax on that money if it was accumulated by the trust. If no tax has been paid then what you’re talking about is straight out fraud or evasion.”
Mr Leibler said that if the income was accumulated by the trust, the trust paid tax at the top marginal rate of tax. More often, the income was distributed to individuals or to companies who were beneficiaries. ”Each of those beneficiaries will be taxed at its own appropriate rate of tax,” he said.
The Obeids’ trusts’ documents, which their legal team tried unsuccessfully to suppress, revealed Mr Obeid had credit card bills and other expenses paid by the family trust. In 2010 he received a $220,000 loan from the family trust to buy a holiday unit in Port Macquarie and only days after Labor lost the election in March 2011, the trust deposited $50,000 into Mr Obeid’s Commonwealth Bank account.
These payments raise questions about Mr Obeid’s pecuniary interests declarations to Parliament. In 2002 the Parliament’s privileges and ethics committee cleared Mr Obeid of any wilful wrongdoing over his 154 errors in his pecuniary interest forms.
However, the head of the ethics committee, independent MP Helen Sham-Ho, was furious that Labor had gutted her draft report.
A snapshot of the vast and secret business empire Mr Obeid and his five sons have created were revealed at ICAC this week.
Then there are the 50-odd ”non-current assets” to which the Obeid Family Trust No. 1 has issued loans worth almost $9 million. Some of these loans have been made to Obeid-associated entities including The Stables, a condominium at Perisher; Milland, which owns a vast estate at Port Macquarie which the Obeids are hoping to develop; and El-Telegraph newspaper.
Read more: http://www.smh.com.au/nsw/evidence-questions-obeids-pecuniary-interest-statements-20130125-2dc3k.html#ixzz2J28lGaem