Sir Frederick Henry Wheeler was once described as a "legendary public servant and a master of guerrilla warfare in the bureaucracy."
He was also one of Canberra's "seven dwarfs" — Allen Brown, H. C. "Nugget" Coombs, John Crawford, Harry Bland, Dick Randall and Roland Wilson — that remarkable group of top public servants who exercised enormous influence on policy formulation through the Menzies-Holt era of the 1950s and 1960s.
But it was in the Khemlani loans affair, which led to the downfall of the Whitlam Labor Government, that Sir Frederick showed just how formidable was his talent for bureaucratic infighting. What shook Sir Frederick, as Secretary of the Treasury, was that for a brief period during 1974-75 Treasury lost control of the raising of loan funds on the international market, a function it had normally shared with the Reserve Bank. For the Government had turned to a small-time Pakistani commodity dealer, Tirath Hassaram Khemlani, who, through Mr Whitlam's Minerals and Energy Minister, R. F. X. "Rex" Connor, was asked to tap newly-rich oil sheiks for funds to put together a $4 billion loan.
While Sir Frederick was fighting to ensure the supremacy of Treasury's authority in a vital area of Australian economic policy, he also saw inherent dangers for the Government if it persisted in using people such as Mr Khemlani, who in the eyes of Sir Frederick and the Treasury, was no more than an opportunistic "funny-money" man or "carpetbagger."
There is a story that at one stage when Sir Frederick started lecturing the Prime Minister on the dangers of the loans affair, Mr Whitlam's response was, "Shut up. I've heard everything."
Sir Frederick was reported to have come back with, "Prime Minister, you will listen to me. I am drawing to your attention facts, your ignorance of which, will bring you down." These proved to be prophetic words, as Mr Whitlam was to learn the hard way when Mr Connor revived the loan arrangement with Mr Khemlani after his authority to do so had been terminated.
But Sir Frederick and Treasury fought every step of the way to stop the deal going through. Just how he was able to bring it off is now a matter of public record. Over a critical period on December 20, 1974, as the Government sought to conclude the loan deal, Sir Frederick taperecorded his phone calls to ministers and senior public servants. Eight years later, in November 1982, in a remarkable "exclusive", the now defunct National Times, published transcripts of Sir Frederick's phone conversations.
It also detailed how he continued the fight through the course of the subsequent attempt by Mr Connor to bring off a loan deal with Mr Khemlani. And Sir Frederick was just as blunt and forthright in expressing his view to his public service colleagues as he was to the Prime Minister. During the course of his phone calls, he:
When his own patch was involved, or some action taken or contemplated which he regarded as questionable or "not sound", Sir Frederick was interventionist, eloquent, persuasive and resourceful. He intervened just as decisively as in the loans affair with his own minister (Dr Cairns), when he considered that Dr Cairns had contracted an agency relationship with Melbourne dentist and businessman George Harris for Mr Harris to raise funds for the Australian Government during an overseas trip.
Sir Frederick sent two of Cairns's letters (with the name blocked out) to the Attorney General's Department for an opinion on the Cairns-Harris relationship. The department's opinion was that an agency agreement did exist. But in the wash-up, Sir Frederick copped a rocket from the Solicitor-General, Maurice Byers, who considered Treasury's action was "not consistent with responsible government."
In a similar fashion, during the loans affair, Sir Frederick had got Scotland Yard to run a check on Tirath Khemlani. The Yard didn't turn up anything on the loan intermediary, but Sir Frederick, himself a stickler for propriety, got a blast in Parliament for his trouble. In some peoples' eyes Treasury "disloyalty" under Sir Frederick "powerfully, perhaps decisively", helped destroy the Labor Government.
And in June 1975, after the Harris affair, which led to Dr Cairns being sacked as Treasurer, Sir Frederick was in the thick of it again, with the Prime Minister (Mr Whitlam) declaring that he was determined to shift Sir Frederick from secretaryship of the Treasury. In the event, he was to remain head of Treasury until he retired in 1979. Though his troubles were not all over with the advent of the Fraser Government, after the dismissal by the Governor-General, Sir John Kerr, of the Whitlam Government.
Mr Fraser split the Treasury in November 1976, hiving off its finance wing to become the Department of Finance, despite Sir Frederick's protestations.
Throughout his long public career, 40 years of which were served at the Treasury, Sir Frederick always tended to be a private man. After retirement he took up business directorships with several companies, but refrained from making any substantive comments on the loans affair or any other aspects of his government service. Officially, he presented himself as a public servant of the old school, apolitical and strict in refusing to discuss public business, even in private conversation.
Sir Frederick came to the Public Service via banking. He left Scotch College, Melbourne, at the age of 15, to get a job as a bank clerk with the State Savings Bank of Victoria. He studied commerce part-time at Melbourne University under Professor Douglas Copland. When Professor Copland became wartime Prices Commissioner and adviser to Prime Minister Robert Menzies, he took Sir Frederick, now something of a protege, with him.
But soon after he arrived in Canberra, Sir Frederick was shifted from the Prices Commission to the Treasury to become personal assistant to the Secretary, Mr S. G. McFarlane.
So he found himself thrown into the country's top economic policy arena. Under Mr McFarlane, Sir Frederick served as secretary of the influential Financial and Economic Policy Committee, which included the cream of Australia's economic minds of the day — L. F. Giblin, Mr Copland, Mr Brigden and Roland Wilson (then Commonwealth Statistician and adviser to the Treasury). But it was under Mr Chifley, as Treasurer and then as Prime Minister, that Sir Frederick's career at Treasury really began to flourish.
Mr Chifley was said to have admired his integrity and ability, and it was under Mr Chifley's auspices that he emerged as a significant figure at the Treasury. It was Mr Chifley who selected him as one of three officials to negotiate Australia's entry into the International Monetary Fund (the Bretton Woods agreement). After Mr Chifley's defeat, he continued to serve in the Treasury under the Menzies' Government and, despite being relatively young, was in the race to become its head. He missed out to Roland Wilson.
Looking around for a new job outside Treasury, Sir Frederick found it in 1952 in Geneva as treasurer of the International Labour Organisation, from whence he returned to Canberra to become chairman of the Public Service Board in 1960. During his decade there he wrought many changes, and his first years have been described as the liveliest in the board's history.
Sir Frederick got the opportunity to go back to his first love, the Treasury, in 1971 — this time as permanent head. Billy McMahon, as Prime Minister, did not always like the advice given him by the Treasury and was not averse to saying so publicly. But Sir Frederick adhered to what Mr Chifley admired in him — the practice of giving advice that he was convinced was sound, but not necessarily the advice the recipient might prefer to hear.
While Sir Frederick always sought to give what he considered sound advice, and put his views strongly, he did not operate as a "one-man band". It usually grew out of mutual discussion. The consultative habit was the product of Sir Frederick having been among a group of advisers who grew up around Mr Chifley in the early 1940s who became known as the "official family".
The late Professor L. F. ("Fin") Crisp, Mr Chifley's biographer, has written of Sir Frederick's role in this group: "Wheeler was one of the originals of what we have called the 'offsiders' group. When, in the late 1940s, several of that group wandered away to other pastures, he maintained a small group from within, and a little outside, the 'official family' which met from time to time to look over the field of economic problems ..."
His devotion to work was legendary and must have placed some restriction on family life with his wife, Peggy, who died in 1975, his son and two daughters. At the Public Service Board he often held informal meetings starting around 5.30 pm and continuing indefinitely, even until midnight. When some of those attending got restive or had to excuse themselves, he would let them go but convey the impression that they might be missing out on something worthwhile during the remainder of the meeting.
Frank Crean who, as a Labor Treasurer, worked with Sir Frederick had no complaints. He scorned talk that Treasury under Sir Frederick was somehow anti-Labor and rated Sir Frederick as "one of Australia's greatest public servants," or, as a former colleague once said, "Fred was the super-professional of us all ... in so far as we could measure up to him that was it." Whatever the judgment of time, the former bank clerk certainly learned to take the rough with the smooth without complaining publicly.
John Farquharson, 'Wheeler, Sir Frederick Henry (1914–1994)', Obituaries Australia, National Centre of Biography, Australian National University, http://oa.anu.edu.au/obituary/wheeler-sir-frederick-henry-1567/text1630, accessed 20 May 2013.