The ‘Greek Conspiracy’

On April Fool’s Day 1978, Commonwealth Police arrested 182
pensioners and doctors in a series of raids.

A few days later, the Department
of Social Security (DSS) cancelled the pensions of 669 people. These people
were said to have conspired to defraud the Commonwealth by obtaining invalid
pensions and sickness benefits to which they were not entitled, using medical
certificates that allegedly fabricated or exaggerated complaints.

Most of the
pensioners involved, and most of the doctors who wrote the medical certificates,
were of Greek origin and the case became known as the ‘Greek Conspiracy’. 

Ten years and tens of millions of dollars later, all the
criminal charges were with­drawn or dismissed. After a special inquiry chaired
by Dame Roma Mitchell of the Human Rights Commission, compensation was paid to
those arrested and nearly all the cancelled pensions and benefits were restored
with full arrears.

Even so, those pensioners and doctors falsely accused in the
Greek Conspiracy case carry the emotional scars of their humiliation and the
stress of the long battle to clear their names. Many were receiving pensions because of psychiatric or
nervous disorders and in many cases their conditions deteriorated as a result
of this case.

Various aspects of the case were divided up between
different legal bodies.

Redfern Legal Centre provided initial legal
representation in the committal proceedings and in the efforts to get the
pensions restored. The Australian Legal Aid Office eventually took over the
running of these cases.

PIAC pursued the issues of maladministration by the
Depart­ment of Social Security.

PIAC’s main involvement was in relation to the Ombudsman’s
investigation of the cancellation of pensions and benefits.

A psychiatrist, Yolande Lucire, made a complaint to the
Ombudsman on behalf of some of her clients about a year after the initial
suspension of their pensions. Over three years later, the Ombudsman still had
not reported and in late 1982 PIAC was asked to intervene. Thereafter followed a year of
litigation on several fronts as the Ombudsman sought to withhold his draft
report from PIAC, although at the same time providing it to the Department of
Social Security.

The complaints the Ombudsman was asked to investigate can be
summarised as follows: 

  • Reliance on discriminatory criteria in identifying those
    persons whose pensions were to be cancelled. The DSS had used a ‘hit list’
    compiled by the Commonwealth Police on the basis that people had Greek sounding
    names and had been treated by certain doctors. It was subsequently admitted
    that the police had no evidence against these people
  • Failure to comply with the usual practice of allowing
    people who are alleged not to be medically unfit a period of three months
    notice before their pension is cancelled. This action resulted in many
    pensioners and their families being thrown into severe financial difficulties. 
  • Failure to ensure proper medical examinations in reviewing
    the eligibil­ity of those living in Greece. These people were first examined by
    a doctor attached to the Australian embassy in Athens. They complained that he
    was rude and cursory in his examinations and was more con­cerned with whether
    they had seen any of the doctors alleged to be involved in the conspiracy than
    with assessing what was wrong with them. Access to his reports under the Freedom
    of Information Act
    revealed some extraor­dinary
    statements, such as ‘talks as if vaccinated by a gramophone needle’, ‘this man
    should be on the stage’, and ‘excelled at hysteric displays’.  This doctor’s reports were later
    criticised by other senior doctors in the Department as ‘sparse’,
    ‘unprofessional’ and ‘ill-advised’.
  • Unreasonable delay in arranging for reassessment of
    pensioners living in Greece and discriminatory treatment of them in comparison
    to those living in Australia. It took the Department well over 18 months to
    reassess those people living in Greece. The delay forced many pensioners to
    return to Australia in an endeavour to get their pensions restored more
    quickly. For people who were often quite ill and who were living in financially
    constrained circumstances, this caused obvious hardship.

PIAC first wrote to the Ombudsman in December 1982, three
years after the complaint was first made, inquiring when he was likely to
report. The Ombudsman wrote back acknowledging the delay but attributing it to
staff shortage. In March 1983, the Ombuds­man informed PIAC that he had
completed the draft report and was forwarding it to the De­partment of Social
Security for comment, but not to PIAC. 

PIAC considered that its clients should also have had an
equal opportunity to comment, particularly as criticisms had been made of one
of them.

PIAC sought access to the draft report under the FOI Act, but the Ombudsman claimed that his Act imposed over­riding
obligations of secrecy upon him.

PIAC appealed to the Administrative Appeals Tribunal against
the Ombuds­man’s refusal.

In its judgment of November 1983, the Tribunal held
that s 38 of the FOI Act picked up the
secrecy provisions of the Ombudsman’s Act.  PIAC then appealed to
the Full Court of the Federal Court, which overturned the AAT decision.
However, the Om­budsman then threw up a further barrage of grounds of objection
to disclosure. Justice Shephard of the Federal Court, who by this stage was
dealing with PIAC’s fresh attempt to gain access under the Administrative
Decisions (Judicial Review) Act
, took a dim
view of the Ombudsman’s ingenuity in finding new arguments:

‘A public official is not entitled to scratch his head every
time he loses a round and say: 
well, I will think of something else, and put this up as a barrier. That
is not the way that the thing should be allowed to go on … it’s just not on
for litigation to be conducted in this way.’

In July 1984, Justice Shephard held that PIAC was entitled
to have access to the bulk of the draft report, but not to its conclusions.
While PIAC considered appealing, it had gained most of the documents it
required and was able to get a good idea of which direction the Om­budsman was
going in. 

PIAC then prepared a lengthy submission to the Ombudsman
setting out evidence in support of the complaints against the DSS. This was
considered by the Ombudsman in preparing his final report, released in
September 1984.

The report was a damning indictment of the conduct of the
DSS. In particular, the Ombudsman
criticised the Department’s action in suspending pensions on the basis of the
police list without taking its own action to verify the allegations. He found
that these pensioners were subjected to guilt by association.

The Ombudsman also found that the De­partment had been
unreasonably tardy in reassessing pensioners and unreasonably dis­criminatory
in its actions against those living in Greece. He recommended that the
pensioners be paid the pension they should have received during the ‘three
month grace period’ usually accorded rather than an instant cessation of
pension, an amount for lost fringe benefits, assessed at 25% of the pension,
and reimbursement of airfares for those who returned to Australia to chase up
their loss of pension.

The Ombudsman also criticised PIAC in his report, blaming
the FOI litigation for a year’s delay in producing his final report. This was,
of course, triggered by the Ombudsman’s own stubborn refusal to give access to
the draft report. In justifying his practice of providing draft reports only to
departments, the Ombudsman said that it would be unjust to release a critical
report without first providing the department concerned with an opportu­nity to
respond. Other ombudsmen, including the New South Wales Ombudsman, do not take
this view and routinely provide complainants with draft reports.

PIAC was also involved in other ways in the Greek Conspiracy
case. PIAC acted for a number of clients in appeals to get back their pensions,
all of which were ultimately settled in the clients’ favour. PIAC also filed
several hundred writs against the Common­wealth in the High Court seeking
damages for the loss and injury caused, which added to the pressure to pay

Looking back over the saga, it is difficult to escape the
conclusion that at its root lay dis­criminatory views of Greeks as malingerers.

There was no evidence that Greeks or any other migrant group make any greater
claims on the welfare system than others. The Greek Conspiracy case is not only
a blight on Australian public administration but is a testament to the
immaturity of a society that harbours racism and prejudice despite its loud
protestations of multiculturalism.

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