FBI probe grant firm in SA

The American Federal Bureau of Investigation (FBI) is looking into the rot that has plagued South Africa’s country’s social grant payouts in recent months.

In the Western Cape, 1.3 million people alone depend on grant payouts every month.

But the system has descended into chaos since new operators, Net1 UEPS technologies took over.

Net1 is jointly listed on the American Stock Exchange, the Nasdaq and on the JSE.

The US Department of Justice Criminal Division and the FBI have now teamed up to investigate possible corruption in how that company secured a R10 billion tender to issue grants here.

In August, the North Gauteng High Court ruled that the process of awarding the tender was illegal and invalid.

Despite this, the South African Social Security Agency (Sassa) was allowed to continue using Net1 through its subsidiary Cash Paymaster Services (CPS).

The judge decided that although the process was flawed, cancelling the contract would be disastrous and the social service would collapse.

If the American investigation is successful, Net1 could be out of business and senior managers could face arrest.

Sassa and the Social Development Department say they have not been contacted by the FBI or the US Department of Justice Criminal Division.

Social Development spokesperson Lumka Oliphant says by law, government has a constitutional duty to make sure grant monies are paid.

“We have a five-year contract with CPS and we don’t forsee any problems,” she said.

“We have not had any contact with anyone from America, everything we [are] hearing is from the media.”

Meanwhile, the previous grant payout company AllPay, a subsidiary of ABSA, is also still going ahead with its legal appeals.

They want CPS to be replaced after the court ruling that the tender awarded to them was invalid.

This case will resume next year on the Supreme Court of Appeal’s roll.

This double court action has raised concerns that Sassa must have a back-up plan to continue paying grants if Net1 is found guilty of corruption.

The Western Cape government says it is out of their hands because the money is paid by the national authority.

Western Cape Social Development spokesperson Samatha Fourie says they also had no idea about the possible payout crisis: “We have not been informed of any developments pertaining to the issue raised.”

Source: IoL

Probe as guard aims at lensman

The head of a security company tasked with guarding social grant paypoints says it will investigate one of its members who aimed his rifle at a Cape Argus photographer. Wahl Bartmann, Fidelity’s chief executive officer, said from Joburg that he would respond once an internal investigation into the matter had been conducted.

The incident happened on Tuesday afternoon at the Athlone Civic Centre where the Cape Argus was reporting on a SA Social Security Agency (Sassa) pay point system failure. When reporters and photographers tried to enter the centre, which houses one of these pay points, they were stopped and turned away by security guards. Staff photographer David Ritchie was taking photographs of members of the public leaving the premises, when a security guard walked towards him, lifted his firearm and took aim.

“If members of the media have the proper identification, and follow the proper channels, Sassa would never deny them access to a pay point,” Shivani Wahab, spokeswoman for Sassa in the Western Cape, said.

Fidelity is subcontracted by Cash Paymaster Services (CPS), which delivers grant payments on behalf of Sassa, to provide security at pay points. “We think that the conduct of the security guard in question was unacceptable and unjustified. Sassa’s Western Cape office will commit to taking the matter further with CPS.”

Meanwhile, the chaos at the province’s Sassa pay points entered a second day on Tuesday, as pensioners who were not attended to on Monday queued again for hours. Wahab said the technical glitch in CPS’s online system, which caused the delays, had not been sorted out. “But improvements had been reported at some pay points,” she said.

On Tuesday afternoon Albert Fritz, MEC for Social Development, visited a pay point at Elsies River and said he was “shocked at the chaotic state of service delivery”.

Keri Davids, spokeswoman for Emergency Medical Services, confirmed that paramedics had treated four people on Monday. “Today (Tuesday) we treated eight elderly patients on site for exhaustion and dehydration. We had an ambulance on standby, but luckily nobody needed hospitalisation.”

Source: IoL

Media statement on special leave granted to the Chief Executive Officer of the South African Social Security Agency

Social Development Minister, Mrs Edna Molewa, will soon make a decision on the future of the Chief Executive Officer (CEO) of the South African Social Security Agency (SASSA) Mr Fezile Makiwane. This follows receipt by Minister Molewa of the report by the Special Investigating Unit (SIU) about the investigation pertaining to alleged flouting of the rules pertaining to the Public Finance Management Act (PFMA) and irregular procurement processes by Mr Makiwane in his capacity as the CEO of SASSA.

In July 2009 Minister Molewa and Mr Makiwane mutually agreed on Mr Makiwane taking special leave pending an investigation by the SIU involving 11 transactions.

"As required by law, yesterday, 7 December 2009, I gave the report to Mr Makiwane to allow him an opportunity to respond to the findings. He has until the 18 December to respond, after which I will study his response and announce my decision to the public" Minister Molewa said.

Mr Coceko Pakade who is Chief Financial Officer for the National Department of Social Development has been acting as SASSA CEO since Mr Makiwane went on special leave, and service delivery has not been negatively affected.

Source: Department of Social Development