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Retired Justice Yeldham very controversially granted a hospital license in 1993 over objections by myself and others. In 1996 he committed suicide amidst revelations that his widely known clandestine sexual activities placed him at risk of improper influence. This page describes this and my attempt to have the decision reviewed.
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Every attempt is made to provide accurate and well written material. Your contributions, suggestions, additional information and advice sent to the web address at the foot of the page are welcome. Where possible they will be included in revised pages.
The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made. Material contained here represents my views based on my study of the operation of the health care marketplace and the material available to me. It should not be assumed to represent the views of any other individual or organization.
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Also on the web is an extract from my 1993
submission to Yeldham in which I predicted that the investigation
before market and political pressures to grant the
Mr. Yeldham is the retired New South Wales supreme court judge who made the controversial decision to grant hospital licenses to National Medical Enterprises' Australian subsidiary in 1993. This was in spite of escalating exposures of its criminal conduct. National Medical Enterprises (NME) is now called Tenet Healthcare. Yeldham's out of court conduct indicates that he was at risk of improper influence . The relevant regulatory bodies in NSW were asked to investigate Yeldham's licensing decision. They either refused or indicated that they were unable to do so.
Mr. Yeldham's Suicide:- Mr. Yeldham, a retired supreme court judge in New South Wales committed suicide when he was subpoenaed to appear before a Royal Commission inquiring into police corruption and the protection of paedophiles. The reason for this became apparent during evidence.
Mr. Yeldham's conduct:- Evidence subsequently given to the commission revealed that Yeldham was bisexual. A married man with a family he led a clandestine double life indulging in public exhibitionism (Sydney Morning Herald 12 Dec 96). He was well known in the gay community. He frequented the homosexual beat where he purchased sexual favours from young men and schoolboys (Sydney Morning Herald 7 Dec 96). His conduct had been so public that at least 7 instances were described to the commission. He had been apprehended by police on several occasions over a period of 11 years. While many knew of his conduct his wife, children and the public did not. The problem is not that he was gay but that his conduct in public was such that he placed himself at risk of blackmail or improper influence.
Police protection and the special branch:- Yeldham had been protected by the police. The "special branch" had been particularly protective. The special branch were called in by the regular police when Yeldham was apprehended. They drove Yeldham home. Police records were lost or falsified to conceal what was happening. Police understood this was because Yeldham was "on side". He would make decisions favourable to the police. The special branch were a section of the police whose duties include the security of the state and the protection of politicians. They apparently kept files on large numbers of public figures and no one knows to whom they reported and to what use this information was put. They seemed to be a law unto themselves. Special branch members who gave evidence to the Royal Commission had remarkably poor memories about any of these matters. Police corruption in NSW has been a serious problem for many years.
Special Branch files:- The Sydney Morning Herald (7 December 1996, page 29) reports that special branch kept dossiers on eminent people in NSW and that this was outside their charter. The report indicates that soon after Neville Ireland became head of the special branch, he found five folders in a safe. "These contained dossiers on prominent and eminent people, in NSW including details of suspected and rumoured illegal behaviour". The possession or collection of such material was outside the special branch's charter. Ireland confirmed that Yeldham was well known around the inner-city railway station toilets in the 1980's and 90's. The Royal Commissioner Mr. Wood stated that Mr. Yeldham had by his conduct exposed himself to "blackmail or improper pressure". No attempt has yet been made to examine the decisions he took.
Background:- Ron Williams in his book "Remission Impossible" predicted that Australian politicians would see the wealthy US megacorporations as the solution to Australia's health care problems. He was very pessimistic as to the consequences. His predictions were given credibility when National Medical Enterprises (NME), the third largest and a very wealthy company in the USA purchased a cash strapped company Markalinga at the end of 1991. Markalinga was approaching bankruptcy. It owned 9 hospitals in NSW and Western Australia (WA). The name was later changed from Markalinga to Australian Medical Enterprises (AME). NME, now renamed "Tenet Healthcare" is an example of the sort of company which Ron Williams was concerned about. The unethical and criminal business practices which had made it so wealthy had been reported in the Australian press in October 1991. The Foreign Review and Investment Board (FIRB) did not investigate these allegations before allowing the company into Australia. Shareholders were not provided with an analysis of the corporate business practices. Politicians were strongly supportive.
Objections to licenses:- When AME applied for a the transfer of hospital licenses in NSW a human rights group lodged an objection on the basis of NME's business practices as revealed in the USA. After a very cursory investigation the NSW Department of Health accepted assurances given by AME over the information contained in documents in their possession. Licenses were granted. This was followed by an outcry when ABC television showed a documentary describing NME's practices in the USA. Others lodged objections, and private individuals supplied documents from the USA. These indicated the true extent of NME's business practices and the culture which supported it. NSW Health were persuaded. They felt that they had been deceived and now commenced a much more thorough investigation.
Western Australia:- Western Australia had been supplied with the same documents as NSW Health. They investigated and sent their minister a series of reports in February and March 1993. These expressed the opinion that NME was a threat to the Australian health system and was not a fit and proper company to run hospitals in Australia. Many documents available at that time attested to the adverse consequences of NME's business expertise, expertise for which AME were paying NME $1 million a year. WA Health did not have the power to remove licenses. They advised the minister in WA to set up a process with the power to deal with the problem. The minister did not take this advice.
The new St. George's Hospital:- AME applied for a license to build the new St. George's Private Hospital in late 1992 or early 1993. There were now additional objections and it is likely that Dr. Amos, a doctor and the director general of health shared the views of Western Australia. Dr. Amos was responsible for making the decision. Had he rejected licenses then NSW Health might have had to resist a legal challenge by this company. This would have been very costly as witnesses would have to be induced to come from the USA. The government would have had to fund this. The government were being lobbied by businessmen, area health authorities and sections of the medical profession who wanted the hospital. They did not have access or the time to read the bulky documents. Rejection of licenses might have resulted in the closure of several hospitals and the loss of jobs. Dr. Amos would not have had the support of his minister.
Appointment of Mr. Yeldham :- Newspapers in Australia ran feature articles describing NME's conduct in March 1993. NME had not yet pleaded guilty to any of the charges laid against it in the USA. Dr. Amos stated publicly that he would not grant licenses until he was satisfied (Sydney Morning Herald 6 March 1993). The regulations did not specify any time limits and he indicated that he intended to delay the decision until the situation in the USA became clearer. He commenced a very thorough investigation and used the regulations to require NME and AME to disclose all the court actions and investigations they were facing. AME protested strongly. There was a meeting with AME directors. Dr. Amos then "discovered" that he had a conflict of interest. He agreed to accept Mr. Yeldham, a retired judge as his delegate to make the decision.
Yeldham ignores NSW Health :- Mr. Yeldham immediately set about his task. NSW Health made a submission to him urging him to delay until the situation in the USA was clearer but he did not do so. He clearly intended to grant a license with conditions as soon as he could. Towards the end of June NSW Health were supplied with a large number of additional documents, many of which NME had not disclosed. NSW Health now made a strong submission advising that the license application be rejected and advising against licenses on the basis that the proposed conditions could not be enforced. The company's "lack of frankness and candour" in their dealings with health authorities indicated that they could not be trusted.
The rush to reach a decision:- Yeldham pressed ahead even after two NME appointed American directors resigned. Documents showing their involvement in NME's practices had been tabled in court in the USA. In addition hundreds of FBI agents raided NME's US offices and its hospitals across the country. It was clear that criminal proceedings were planned. Yeldham entered into negotiations with AME who rewrote sections of his determination. These effectively emasculated the conditions which he imposed on the license. Mr. Yeldham accepted these changes and signed his decision on 1 September 1993.
The inadequacy of the conditions:- Mr. Yeldham claimed that his conditions would shield AME from NME's influence. He claimed that they insulated AME from NME. By any reasonable criteria they did not do so and simply provided a formula to legitimise the existing situation. Yeldham's conditions permitted NME's senior executive to continue to run the hospitals. They did not prevent this executive from introducing NME's business expertise under the terms of the $1 million a year agreement between NME and AME.
Subsequent exposures :- Only a month later in October 1993 it was revealed that while NME was negotiating with Mr. Yeldham, a Singapore doctor was describing under oath in court how the NME staff who were now running the hospitals in Australia, had attempted to trade patients with him. This mirrored NME's unethical and criminal conduct in the USA. It was also revealed that NME was negotiating a guilty plea in the USA to criminal activities involving the abuse of patients in over half of its hospitals. We do not know whether Mr. Yeldham was advised of these developments of which NME was fully aware.
Worrying aspects:- If Yeldham was subjected to "improper influence" then it would explain his rush to make a decision before these matters became public and its lack of efficacy. Dr. Amos, who had a long and distinguished career resigned soon after Yeldham's decision and was awarded the Order of Australia. NSW authorities refused to review the Yeldham decision in the light of the additional information. AME backed away from its attempt to enter Victoria and Queensland when these states elected not to accept the Yeldham decision and to review the Yeldham material independently. They were supplied with all of the documents, including the information supplied to Yeldham and the information given and claims made by NME in their dealings with NSW. FIRB now stepped in to restrict NME's further purchases in Australia so forcing it to eventually sell its international operations.
The problem:- Mr. Yeldham took a controversial decision when he granted a hospital license against the advice of the NSW Health department. It can be argued that the decision to grant a license was untenable on the evidence in his possession and in the light of the submissions made by NSW Health Department and the WA Health Department. Furthermore his conditions were ineffective and could not possibly accomplish what he claimed. They protected the company by legitimising the prevailing situation. Politicians, businessmen and sections of the medical profession all had a strong personal interest in the matter and wanted the license to be granted. Those who had examined the documents considered that NME posed a serious threat to the Australian Health system and to Australian patients. If the possibility that Yeldham was put under unreasonable pressure to make a decision favourable to the company when he granted licenses to Australian Medical Enterprises in 1993 is to be considered, then we must ask not only whether his decision was tenable but also who had access to information about Yeldham.
Knowledge by the legal profession:- Newspapers report that Mr. Yeldham's sexuality and conduct were known by the legal community in Sydney (Courier Mail 6 Dec 96). He is alleged to have unknowingly solicited a young lawyer who lodged a complaint. The matter was never prosecuted.
The judicial commission:- The NSW chief justice, Justice Murray Gleeson told the chairman of the Independent Commission Against Corruption (ICAC) in 1989 that a story about Yeldham had been around for years. Apparently the previous chief justice Sir Lawrence Street was also aware of an account of Yeldham's conduct. He spoke to Yeldham and accepted Yeldham's assurance that this was a "malicious, unfounded rumour". Justice Gleeson was apparently told in 1989 about the more recent indiscretion but it was decided that this was a matter for ICAC rather than the judicial commission. Whether the judicial commission intervened is not known, but Yeldham took long service leave at this time and then retired from the supreme court (Sydney Morning Herald 7 Dec 96). He continued some legal activity, and his position and standing as a retired supreme court judge judge was used to give the decision credibility when he was asked to decide on a hospital license for AME in 1993.
The Independent Committee Against Corruption (ICAC):- For a period of nearly a year between 1989 and 1990 the ICAC in NSW investigated a complaint about Yeldham and conducted an inquiry into Yeldham's conduct. The inquiry was abandoned because Yeldham had retired from the supreme court and the committee was not concerned with the sexual conduct of private individuals. (Sydney Morning Herald 18 Dec 1996). This matter was drawn to the attention of Mr. Temby, a previous judge when he became chairman of the ICAC in 1995. He also accepted that Yeldham was a private individual. The ICAC reports to a special parliamentary committee. The ICAC would have had to justify the expense of this long but abandoned inquiry to this committee. It is clear that a significant number of lawyers and parliamentarians would have been aware of these matters. It is difficult to believe that the cabinet did not know that the ICAC was investigating one of its supreme court judges and the reasons for this. This was the same government who subsequently appointed or approved the delegation of the license decision to Yeldham.
Operation TAMBA:- During 1990 the ICAC mounted another investigation code named "Operation TAMBA". A report by Simon Davies (no longer on www) maintains that this was one of "the most extensive information corruption investigations anywhere in the world - - - - Systematic selling and swapping of personal information had become endemic and epidemic. Bureaucrats, bankers, debt collectors and police would hold parties where personal information was swapped and contacts secured." The Assistant Commissioner of ICAC apparently labeled this the "Information Exchange Club". The report indicates that "it would be difficult to overstate how widespread the practice has been." "Criminal histories" were freely available, "This corrupt trade sometimes involved quite sinister purposes". "The bottom line of the trade is that it contributed to the corruption of public officials." It was "the public officials and the agents who were the main participants in the trade." The trade would not have been possible were it not for the "direct involvement of the finance industry". The "corrupt conduct of banks" was noted. The extensive involvement of big business is described and it seemed that on the one hand the boardroom wanted to remain untouched, but on the other the response of management was "admiration or open praise". It appears that a "great volume of personal information came from police files" The report also indicates that "all levels of local, state and federal government, ------- were all involved in the illicit trade".
It is clear from this report that information about the conduct of a person as prominent as a supreme court judge, a judge who had been apprehended in compromising situations on multiple occasions would fetch a good price. The 1996 inquiry into police corruption and paedophilia found that many documents relating to Yeldham's apprehension by the police simply disappeared. It is clear that information about Yeldham and quite possibly documents would very probably have been available to politicians, government departments and to the business community - at a price. It is therefore likely that those wanting the approval of the license application either did have or could easily have obtained the information needed to influence Yeldham in his decision. We do not know if they did so.
The truth is appalling:- The Sydney Morning Herald stated on 12 Dec 1996 that "The truth is appalling. It appears that special branch were covering up for the judge for its own purposes. We may never know if any of his judgments were tainted by improper influence, but the evidence suggests that he should never have been on the bench, never in a position of public honour and influence"
Complaint to the ICAC:- The Independent Commission Against Corruption (ICAC) was supplied with the relevant information relating to the Yeldham license determination and was asked to determine whether
1. those who selected Yeldham for the task were aware that he was at risk of "blackmail or improper pressure".
2. the decision he made in overriding the advice of the health department was a reasonable decision in the light of the information given to him
3. the decision to ignore advice from NSW Health that he should wait for the situation in the USA to clarify and to press ahead with the decision rapidly was because he had prior knowledge of the developing situation in the USA and Singapore.
4. any undue influence was exerted on Yeldham and if so by whom.
1. The ICAC found that there was no evidence to support the complaint and declined to investigate. They did not address the question of whether their previous investigation created a conflict of interest for them. Their previous decision not to investigate Yeldham had allowed him to continue to provide judicial services when it must have been clear to the ICAC that if the allegations were correct then Yeldham was at risk of improper influence.
2. The Judicial Commission which controls the conduct of the judiciary was also approached. It indicated that "the Judicial Commission has no jurisdiction over former judicial officers, and is required to dismiss a complaint if the person complained about is no longer a judicial officer."
Last modified October 1998 by Michael Wynne
Minor changes August 2003