The Independent Commission Against Corruption (ICAC) will not be recommending that Brian Flannery, the reclusive mining baron behind several major developments in Byron Bay, be charged with any criminal offence over his involvement in a mining company investigated over a controversial coal-exploration licence deal.
But ICAC has recommended that five of the seven businessmen who own Cascade Coal, of which Mr Flannery is also an investor, be charged with corruption after what has been described as the biggest graft inquiry in NSW history.
Criminal corruption charges have been recommended against former NSW Labor powerbroker Eddie Obeid, former state resources minister Ian Macdonald and a host of businessmen including a handful of the Cascade Coal investors.
No adverse finding against Mr Flannery was made in the three reports by ICAC Commissioner David Ipp tabled in the NSW Parliament yesterday,
Mr Ipp said in the first report that ‘the Commission is not of the opinion that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of Mr Flannery for any criminal offence’.
Mr Flannery, a Queensland coal miner and property developer is the owner of the 88-hectare North Byron Beach Resort property (the old Club Med/Becton site), for which a plan for an initial 75 beach cabins of the proposed 193-unit development is now on public exhibition.
He paid $18.5 million early last year through his family company Ganra Pty Ltd for the prime beachfront site, which had a longstanding approval for the resort.
It also came with a hotel licence and his company will soon relocate an existing bistro building (currently used for the Byron Bay Writers Festival) and transform it into a tavern/bistro on part of the land closer to the Sunrise Beach estate. The bistro/drive-through bottleshop has already been approved.
Mr Flannery is also developing the land to include a cultural events and festival site.
ICAC heard how Cascade Coal in 2009 acquired the mining rights over several Hunter Valley rural properties at Mt Penny for $1 million, then soon after tried to sell them to the much larger, publicly listed miner, White Energy for $500 million.
Each Cascade investor, including Mr Flannery who is also managing director of White Energy, stood to make $60 million when they sold.
But the deal collapsed after an independent White Energy director rang alarm bells over what counsel assisting the inquiry, Geoffrey Watson SC, described as an attempt to conceal the involvement of Mr Obeid’s family in the deal ‘to mislead the other directors and owners of White Energy’.
ICAC this week recommended that the Director of Public Prosecutions consider laying charges against Mr Flannery’s fellow investors in Cascade Coal – Travers Duncan, John Kinghorn, John McGuigan, Richard Poole and John Atkinson – under the Crimes and Corporations Acts.
ICAC found the five had deliberately and corruptly deceived public officials about the involvement of the Obeid family when Cascade Coal purchased the Obeids’ Mt Penny tenements.
ICAC had looked into the circumstances that allowed Mr Obeid and his family to make a staggering $100 million from disgraced former mining minister Ian Macdonald’s decisions.
The Obeids had secret inside information on who would win the government tender, allowing them to partner with the successful bidder Cascade Coal and later to secure, through a web of companies, a $60 million payout from Cascade from the mining project.
The commission has heard how the Obeid family and associates used confidential information provided by Mr Macdonald to buy three rural properties at Mount Penny in the Hunter Valley, in a scheme which would return the family a $100 million profit once coal-exploration licences were granted for the area.
Late in 2008 Cascade Coal won the lucrative exploration tender for the area and in 2009 also agreed to buy the three rural properties for four times their purchase price, giving the Obeids and associates a profit of almost $26 million on that deal.
Mr Watson told the inquiry that ‘for an outlay of about $1 million, Cascade Coal had acquired rights which they were reselling for $500 million’.
He said this was in effect ‘a kind of “gift” of $500 million from us, the people of NSW, to the investors of Cascade Coal’.
The beneficiaries of this ‘gift’ were already ‘very wealthy men’, Mr Watson said.
According to a News Ltd report, Mr Flannery recently bought $27 million worth of Gold Coast property, including the Kirra Beach Hotel, since making $530 million from the $3.5 billion sale of Felix Resources to China’s Yanzhou Coal Mining in 2009.
The mining magnate is believed to have an estimated fortune of more than $600 million.