"We've been stuffed."
A former NSW Primary Industries (DPI) official says he can't remember if those were the exact words he used when he learned ex-mining minister Ian Macdonald had ignored departmental advice not to rush through a coal exploration licence in the Hunter Valley.
But Alan Coutts told the corruption watchdog on Wednesday he might have said something along those lines after Mr Macdonald blindsided him with an invitation for former union boss John Maitland to apply for the licence.
The NSW Independent Commission Against Corruption (ICAC) is investigating the granting of an exploration licence in December 2008, covering the Doyles Creek coal tenement, to a group of entrepreneurs including Mr Maitland.
Documents previously tendered at ICAC suggest the men invested just over $1 million in the site but stood to make up to $60 million within three years, including nearly $15 million for Mr Maitland.
Two top bureaucrats have testified that they thought Mr Maitland's proposal for a training mine at the site was the wrong way to go.
Both said the department's advice to Mr Macdonald was that a competitive tender for a licence at Doyles Creek was preferable to a direct allocation, and would earn more for NSW.
Mr Coutts, then DPI deputy director general, appeared relaxed as he told the inquiry he first learned that the former Labor MP had ignored that advice after a colleague forwarded him an article from a Hunter Valley newspaper.
"I was very, very surprised when this happened and in my experience, I have never seen it happen before," he said.
Mr Coutts said he had viewed Mr Maitland's training mine idea - first canvassed in early 2007 - as a "stalking horse" to get access to a coal tenement that would net him and his associates millions.
ICAC has previously heard allegations that Mr Coutts was removed from the DPI after he challenged Mr Macdonald over coal exploration licences.
The department's director general at the time, Barry Buffier, told Wednesday's hearing he considered the training mine proposal to be a "thought bubble" that was light on detail.
Mr Buffier helped prepare a briefing for the minister back in February 2007 that outlined concerns about the probity of Mr Maitland's proposal.
"I thought that we had been successful in terms of our briefing note in putting the issue to bed or bursting the thought bubble, and I thought that was the end of it," he recalled.
The commission heard Mr Maitland, a former national president of the Construction, Forestry, Mining and Energy Union, was considered an influential figure in NSW Labor circles who was "known to be close" to Mr Macdonald.
"When (union officials) were having difficulty getting access to ministers, the would call on John to help them in that regard," Mr Coutts testified.
Commissioner David Ipp cut short proceedings on Wednesday after counsel for Mr Macdonald raised questions over the widening of the scope of the inquiry two days earlier to include whether the ex-MP had acted recklessly or negligently.
The inquiry will continue on Thursday.