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Objection Correspondence 2007
to the DCA Sale

As indicated on linked pages objections had been lodged with authorities in regard to the purchase of the giant Australian aged care giant DCA by a Citigroup subsidiary. This was because of Citigroup's alarming track record. Only the Department of Health responded indicating what action they had taken which in this case was nothing. They took over 4 months to tell me that they were not required to do so under the law. I was given no opportunity to canvas these issues publicly.

The response and my reply, which are reproduced on this page, should be seen in the context of a letter to me by the same director in 1999. In that letter I was given assurances. It gives a wonderful insight into how the system works.

The relevant correspondence is in the last 4 letters on the linked web page dealing with this 1999 correspondence. Note the one by Ms Karmel

Click Here to open this page in a separate window so you can compare the letters.

I am of course sympathetic to the situation in which Ms Karmel finds herself. She is working for a government and a minister who has rendered her powerless to do her job and so destroyed her credibility. My response speaks for itself.

Australia has moved steadily towards the US situation where department staff are blatant political appointments and where their careers depend on supporting their minister and government ideology. There are few situations where long and distinguished tenure and stature give a department the sort of independence that allows it to confront politicians and their policies. This is sometimes necessary to protect citizens. Bernie Amos in NSW was probably the last director in this position when in 1993 he opposed hospital licenses for the infamous US giant Tenet/NME. The government found a judicial way to circumvent him and get their way. The reason the judge was probably selected was revealed in 1996 when he committed suicide.

20 February 2007



19 March 2007


Ms Prue Karmel
Capital and approved Provider
Department of Health and Aging
Aging and Aged Care
MDP 75 GPO Box 9848
Canberra ACT
19 March 2007

Dear Ms Karmel,

Purchase of DCA by Citigroup entities

Thank you for your letter to me dated 20th February 2007 in response to my objection dated 29 September 2006. I have not had an opportunity to reply as I have been away. It was good to hear from you again and know that my objection was addressed centrally in Canberra and not pigeon holed in a state archive. We last corresponded in May 1999.

Thank you for the information about oversight and accreditation processes. As we are both aware these processes have not worked in the USA and recurrent attempts to make them more effective have all failed. During the last few years corporate owned Redding hospital in California performed hundreds of unnecessary coronary bypass procedures while it was fully accredited and agency staff bickered about failures in processes.

Large numbers of patients developed massive infections and some died at another corporate facility while agency staff bickered and procrastinated about ongoing major breeches in theatre safety, which the company had refused to do anything about because the remedy was costly.

In another hospital the agency did nothing except talk to the hospital after a disgusted surgeon warned them that the company was hiding failures in sterilization from the surgeons. It should have been their decision whether they would or would not operate. They would not had they known but this would have reduced profits.

Shown up for the umteenth time the US accreditation agency once again claims that it is reforming its processes.

Aged care accreditation in Australia has and is going through the same cycle of recurrent failures and attempts to reform its processes. At the same time aged care has progressed from neglecting the elderly in 2000 to raping them in 2006. Even after that the minister was still promoting the myth of a marketplace trading in decrepitude. He is no fool and it must have been only too obvious that it is market theory and strong commercial pressures that have devalued care, destroyed staff motivation and emasculated oversight processes in both countries. This must ultimately be confronted and the longer the delay the greater the suffering.

As you now know the minister at the time was a person allegedly renowned for using manipulation and stand over tactics to promote his career. His flouting of probity and conflict of interest requirements in regard to share trading (? to feather his nest) goes to the issue of probity. His cynical promotion of market driven aged care in the face of evidence, in order to pay service to ideology and promote his own career, are now glaringly apparent.

I sincerely trust that you will talk seriously to the new inexperienced minister, brief him fully on these issues to see that he has the knowledge and hopefully the mettle to stand his ground and not bow to the economically blinkered views of his close associate the treasurer. Has he the backbone to confront the ideologues and act in the interest of vulnerable Australian citizens?

His first step should be to urgently reinstate probity requirements for all concerned with aged care and give a properly independent agency the legal backing to deal with the probity of local and multinational companies/persons whatever their role in aged care. Anticipation and prevention of possible problems is infinitely preferable to closing the gate after the horse has bolted. Placing the well being of the vulnerable ahead of the claimed rights of commercial operators to exploit every facet of our society for gain would go some way to accomplish this. Many of the problems in aged care could be prevented if the provision of care were restricted to suitably motivated people with a well documented community (as contrasted with commercial) focus.

If the minister publicly abandoned the aged care policies of his predecessor he might even earn this government some votes later this year.

You might then be able to meet your 1999 promise that "only suitable persons are approved to provide aged care" and truthfully indicate that the act has actually been "developed to ensure only suitable persons are approved". You would also not be embarrassed by your undertaking to me that "information provided by you will be taken into consideration" if companies apply for approved provider status. Given the hollowness of your past undertakings and the ingenious and strictly speaking correct manipulation of words and legislative process in your assurance I am sure you do not expect me to take your new assurances seriously.

As you are well aware those with the most economic power ultimately appoint management and determine what will happen to care. Responsible owners who wield ultimate power should not be excluded from regulatory scrutiny by a few phrases of neat but deceptive legal jargon.

You state that an application for approved provide status is not required when an organization acquires all or part of another company that is approved. This is confirmation of my 1999 assessment that this government had deliberately emasculated the regulatory system so that it could liberalize aged care and further its ideological drive to marketize and globalize it. State probity provisions had stymied their efforts to bring multinationals into health care. I believed that they were determined to prevent this from happening in federally controlled aged care.

Probity definitions and legal words aside, companies, subsidiaries and their employees who have betrayed those they claim to serve and who pay US $10 billion to settle allegations of fraud are not "suitable people" by any definition anyone can develop. A government which hides behind regulatory process to permit this to happen is as lacking in probity and as deceptive as the recent minister who was clearly representative. It deserves the same fate.

I can understand your embarrassment was such that it took you over 4 months to tell me that you could not act because the government had rendered you ineffective. Many of us now believe that this is what it did to all of the regulatory system when it asked the aged care companies to write the regulations under which they would operate and be controlled.

I do understand your position and I am sure we both hope that there will be some relief before the year is out. We can only pray that a new government will be less bound by ideology and more realistic - and not place you in such an embarrassing situation again.

My sympathy and best wishes.

Yours sincerely,


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This page created Mar 2007 by
Michael Wynne