Former NSW Labor minister Ian Macdonald betrayed the state when he granted a Hunter Valley coal exploration licence without a competitive tender, a court has been told.
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Macdonald, 73, appeared at the NSW Supreme Court on Friday for sentencing submissions after being found guilty of misconduct in public office.
The then mines minister had granted a lucrative coal licence to Doyles Creek Mining, chaired by a former union boss, without a competitive tender in 2008.
John Maitland, a former national secretary of the Construction, Forestry, Mining and Energy Union, was found not guilty of being an accessory last December.
Crown prosecutor Phil Hogan argued granting the licence led to the erosion of public confidence in the government.
"He was entrusted with a very high level of public confidence and he betrayed that," Mr Hogan said.
"There was planning, and he was the instigator.
"There is a direct cost to the people of NSW and an indirect loss of the confidence of potential investors in NSW."
Defence barrister Ramesh Rajalingam claimed the court established previously that Macdonald had a genuine interest in a training mine venture to promote mining safety.
"His conduct was open and honest in nature insofar that he was communicating things with various people in his department," Mr Rajalingam said.
"His failure is by reference to his judgment ... He made a decision for the purposes of benefiting a company."
Mr Rajalingam argued the offence was not as serious as one that would have been committed behind closed doors. But Justice Hament Dhanji rejected this, saying it did not fairly represent what he found.
"What I found was that he was genuinely committed to promoting the safety of mine workers. It does not follow that any train mines would be necessary," he said.
"He takes an oath as minister, he understands he has obligations, his obligation here is to act in the best interest of the state and to me, subject to what you can say to persuade me otherwise, this is dishonesty and not acting in accordance with his obligations."
Macdonald's engagement with fellow former minister Eddie Obeid was also raised by the judge.
The misconduct related to Macdonald's actions in establishing and granting a coal exploration licence over the Obeids' family property at Mount Penny, in the Bylong Valley near Mudgee, for the family's financial benefit.
The Doyles Creek matter will return to court on March 24, the day before the state election.
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