Social grants agency under fire over R10bn tender

The move by anti-graft watchdog Corruption Watch comes in the wake of weekend reports (see below) of millions being spent on VIPs and pensioners being robbed of their social grants through payment scams. A report on the Fin24.com site notes Corruption Watch says police should probe a tender awarded by Sassa to Cash Paymaster Services (CPS). 'Corruption Watch will urge the police to undertake an investigation into allegations of bribery surrounding the Sassa contract,' executive director David Lewis said. 'The presence of irregularities in the tender process begs the question: in whose interest were these irregularities perpetrated, and why?' Last week, the Constitutional Court ordered Sassa to initiate a new tender process for the payment of welfare grants, but said in the meanwhile (CPS) must continue to carry out its obligations. To achieve this, the court suspended its declaration of that contract as invalid. The ruling follows a Constitutional Court decision, in November last year, declaring the R10bn contract with CPS invalid, following a long legal challenge by losing bidder AllPay Consolidated Investment Holdings. Full report on the Fin24.com site

The judgment subjects Sassa and CPS to high levels of scrutiny, notes a Business Day editorial which notes that this year more than R127bn of taxpayers' money will go towards paying social grants, which make up more than 10% of the national budget. It says the court has taken an unusually interventionist stance, requiring Sassa to report to it quarterly on the tender process and requiring financial statements on CPS itself. The editorial states that while there has been no finding of corruption, the court's ruling speaks volumes on its view of Sassa and CPS. The editorial says: 'One important effect of the court's ruling is that it opens the way for private companies that win government tenders to be subjected to the same levels of accountability and scrutiny as the government itself -- so those in line to profit from the spending of taxpayers' money should not expect that they can do so without being accountable to taxpayers.' Full Business Day editorial AllPay and Others v SASSA and Others (CCT 48-13)

Elderly people in the Eastern Cape are being robbed of some of their social grants through illegal debit orders, notes a report in The Herald. According to the report, they say grants provided by Sassa are often short of large or small amounts - and they cannot figure out the reason. For Warner Adams (80), says the report, the curious thing is that the money illegally deducted each month always ends with the number six. 'Some months my grant is short of R156, then it is R116 and even R186. I have had no dealings with loan firms and have no accounts that I have to pay from this money,' Adams is quoted in the report as saying. Regional Sassa spokesperson Luzuko Qina promised to investigate the allegations. Full report in The Herald

Sassa blew more than R10m meant for the poor on bodyguards from a little-known security company to protect Social Development spokeswoman Lumka Oliphant and senior officials, claims the Sunday Times. It says it has established that Vuco Security Solutions, based in KwaMashu township outside Durban, was awarded the multimillion-rand deal. Sassa pays grants to more than 15m recipients. Documents the Sunday Times says it has seen allegedly confirm that among the Vuco payments approved were: R1.1m 'for close protection services' for Oliphant and her family; R2.9m 'for close protection services' for Sassa CEO Virginia Petersen and Renay Ogle, general manager for fraud management and compliance (an arrest was made after Petersen received a death threat); R95 460 a month since October last year to protect a whistleblower from KZN and his family; R45 000 for erecting a fence, R17 000 for a toilet, R54 000 for a wall, R30 500 for a stoep and front gate pillar, R15 000 for an electric gate; and R206 000 for a luxury Range Rover for Andile Khanyile, who is the head of operations for Vuco and often accompanies Petersen as her 'security adviser'. Documents seen by Sunday Times reporters allegedly show Petersen instructed that most of the contracts bypass normal procurement rules and be funded from her own office. Full Sunday Times report (subscription needed)

The DA is to ask the Public Protector to investigate the spending, notes a report in The Citizen. MP Mike Waters said: 'The reasons given for the expenditure are completely unreasonable...The Public Protector must look at the flouted tender processes, examine the contract between Sassa and the security company Vuco, and determine whether the money paid out to this company constitutes wasteful expenditure.' Social Development spokesperson Lumka Oliphant said the protection services were necessary as the efforts of Sassa personnel to root out corruption had led them to being intimidated and receiving death threats. 'This aggressive attitude to fraud and corruption by the Minister and the CEO has led to the numerous incidents of death threats, intimidation and threats against them and their families and other staff,' said Oliphant. Full report in The Citizen

Sassa has become embroiled in another battle - this time over food parcels. Legal papers have been served on ANC Western Cape chair Marius Fransman and national CEO of Sassa Virginia Petersen to stop distributing food parcels funded by taxpayers at ANC election rallies, notes a Sunday Times report. SA federal executive chair James Selfe said the DA would take Fransman, who is also Deputy Minister of International Co-operation, and Petersen to court because of 'the grotesque and continued abuse of state resources for party-political gain'. The party also intends interdicting the Department of Social Development (under which the agency falls) 'in perpetuity' from handing out food parcels, blankets and other items at ANC rallies. The interdict will be sought against Social Development Minister Bathabile Dlamini and acting DG of Social Development Wiseman Magasela, says the report. The cases will be brought before the High Court in Cape Town, sitting as an Electoral Court. The DA says it has extensive footage of a recent ANC event in Atlantis, on the West Coast, where food parcels were distributed. According to Selfe, the event was hosted by the Department of Social Development, the National Development Agency and the SA Social Security Agency. The speakers were Fransman, Petersen, Deputy Social Development Minister Bongi Ntuli, Deputy Human Settlements Minister and ANC Western Cape politician Zou Kota and two proportional ANC city councillors. Fransman said he was unaware of the DA's legal action against him. 'I did not arrange Wednesday's programme, but as a politician, I am free to go wherever I want. To the DA I say: 'Cowboys don't cry.' They should stop misleading the voters of the Western Cape and focus on the core issues,' he said. Full Sunday Times report (subscription needed)

The matter is also being investigated by the Public Protector, according to a second Sunday Times report. It says Thuli Madonsela's office confirmed it was investigating three cases of alleged abuse of state resources that involved Sassa, the Department of Social Development and the Gauteng provincial government. Madonsela's spokesperson, Oupa Segalwe, said the Public Protector had also taken up the cases of Gauteng billboards that were paid for by the province but decked out in ANC colours, and the distribution of Sassa mattresses by the ANC in Valhalla Park in Cape Town this year. 'The Public Protector is set to arrange an urgent meeting with Sassa to seek clarity on their response and to further understand the social relief of distress programmes,' Segalwe is quoted in the report as saying. Full Sunday Times report (subscription needed)