[Source: http://www.timeslive.co.za/local/2014/08/20/spy-bosses-in-dodgy-social-grants-deal by Stephan Hofstatter and Mzilikazi wa Afrika.]
Millions in public funds meant for poor orphans was blown on suspect deals with a politically connected company run by former spy bosses.
Documents obtained by Sunday Times reporters reveal the SA Social Security Agency (SASSA) paid Resurgent Risk Management R14.3 million for irregular deals, including one that resulted in a KwaZulu-Natal security company looting the state entity’s coffers.
Resurgent is owned by former national intelligence agency boss Manala Manzini and its former operations head Arthur Fraser. Both are prominent ANC figures.
SASSA distributes welfare grants to pensioners, the disabled and indigent mothers.
The paper trail also reveals SASSA CEO Virginia Petersen intervened personally to ensure auditing firm SAB&T irregularly won a R76 million tender to conduct a three-year forensic audit at SASSA, even though it was R4 million more expensive than another company recommended by the bid adjudication committee.
All the deals bypassed normal tender procedures without good reason, procurement officials were kept in the dark, services were paid for without valid contracts being signed, and payments were done directly from SASSA CEO Virginia Petersen’s office.
Resurgent was hired to conduct a threat assessment for SASSA for R2.5 million and devise risk mitigation strategies for R6 million.
The company was also paid R236 842 a month for “strategic advice on security”. This “advice” included improper involvement in state procurement processes that led to shady Kwazulu-Natal company Vuco Security Solutions being hired by SASSA.
The documents reveal Resurgent recommended quotes be sourced from three companies, including Vuco, to provide guards for SASSA staff, its top brass and Social development minister Bathabile Dlamini’s children.
Vuco was appointed without following tender rules, and no contract exists for guarding Dlamini’s children and Oliphant her children. The Sunday Times previously exposed how Vuco looted state coffers by charging fees it wasn’t entitled to and inflating its costs by up to 500%.
Reasons given by SASSA CEO Virginia Petersen for flouting Treasury rules in appointing Resurgent included death threats against herself and her family and against Dlamini’s spokesman Lumka Oliphant.
“This has been discussed with crime intelligence and ministers,” Oliphant says a note on a bid committee memo. Another memo signed by Petersen refers to “risk assessments done by all the organs of state in the justice cluster”, including the Hawks, Crime Intelligence and the State Security Agency.
However, documents seen by Sunday Times reporters confirm suspicions by three senior SASSA sources who doubt these “risk assessments” were ever done.
“Reports from Crime Intelligence were requested (but) to date no reports were received,” says one official document.
Fraser said Resurgent had followed all due processes in contracting with government. Asked why Resurgent became involved in government procurement processes by recommending Vuco to provide guards for the SASSA top brass, he said: “You should be speaking to the agency, not us.”
The Sunday Times previously exposed how Vuco was paid over R11 million for suspect services without going out to tender, paid from Petersen’s office. These included paying Vuco R700 000 to guard the Dlamini’s daughter, hiring a luxury Range Rover for R206 000 over the Christmas holidays, and was paid R3.1 million paid in dodgy “management fees” ranging from 3.96% to 26.32% of the total amount invoiced. Vuco CEO Wayne Ndlovu previously denied any wrongdoing.
SASSA referred queries to Dlamini’s spokesman, Lumka Oliphant, who declined to respond to detailed questions. “All the issues you raise are in the AG’s management letter and are not public documents. Some are also under investigation and we will wait for the results of the investigations,” she said.
58 780 000 (mid 2018 estimate)
4.5% y/y in June 2019 (CPI) & +5.8 y/y in June 2019 (PPI)
-3.2% q/q (1st quarter of 2019)
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