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Australian Labor powerbrokers acted corruptly: inquiry

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    File photo of Australian former minister Eddie Obeid. Criminal charges have been recommended against two former high-profile Australian Labor ministers, one of which is Obeid, over corruption allegations following an explosive inquiry into a coal-mining deal.AFP/File

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    An environmentalist carries a poster condemning former New South Wales Mineral Resources and Energy Minister Ian Macdonald during a demonstration in Sydney on August 13, 2009. Macdonald has been accused of acting corruptly over a coal-mining deal.AFP/File

Criminal charges were Wednesday recommended against two former high-profile Australian Labor ministers over corruption allegations following an explosive inquiry that gripped Sydney for months.

The Independent Commission Against Corruption found that Eddie Obeid, formerly a powerful kingpin in the New South Wales state Labor party, and ex-state resources minister Ian Macdonald both acted corruptly over a coal-mining deal.

They were referred to the Director of Public Prosecutions, who will consider whether to lay criminal charges over a scam which the inquiry heard enabled Obeid and his family to make tens of millions of dollars.

Obeid's son Moses and five influential businessmen, including one of Australia's richest men Travers Duncan, were also referred to the DPP for "various offences" over the mine at Mount Penny.

The damning findings could rub off on the party's image nationally, with Labor already facing a tough fight against the conservative coalition in elections later this year.

Ahead of the findings, Labor Prime Minister Kevin Rudd said he had been disgusted by the alleged behaviour and that any party members involved in illegal activity should face justice.

"My view is very simple -- anyone who is responsible for corruption or illegal behaviour should face the full force of the law," he said.

Obeid and Macdonald have both been expelled from the Labor Party.

The inquiry -- the biggest in the history of New South Wales, the nation's most populous state -- heard from 150 witnesses over six months and saw people queuing for hours to get a glimpse of the proceedings.

Obeid has denied that he used highly confidential information about a prospective coal licence to effect a "massive fraud on the people of New South Wales".

He is accused of conspiring with Macdonald to rig a 2008 tender to grant the lucrative licence over land at Mount Penny -- land which he and his family secretly purchased in 2007-2008.

The inquiry heard that Obeid used the promise of access to the land to negotiate a quarter ownership of Cascade Coal, which won the tender for the exploration licence - estimated to be worth Aus$500 million.

Obeid's 25 percent stake was hidden through a complicated series of trusts and companies run by associates.

The DPP will now decide whether he and Macdonald should now face a charge of conspiracy to defraud.

ICAC Commissioner David Ipp said he would also pass evidence to the Australian Tax Office and the Australian Stock Exchange for further investigation.