5 December 2012

South Africa: Minister Dlamini Must Cooperate With FBI Probe Into SA Grant Tender

press release

I will today be writing to Minister of Social Development, Bathabile Dlamini, to request that she and her Department give their full cooperation to the United States (US) Department of Justice and the Federal Bureau of Investigation (FBI) with their inquiry into the R10 billion tender for the administration of social grants awarded to Cash Paymaster Systems (CPS) in January this year.

The US Department of Justice and the FBI are investigating the R10 billion tender awarded to CPS, a subsidiary of American company Net1 UEPS Technologies, after the tender was declared invalid and illegal in the North Gauteng High Court in South Africa. US authorities are investigating whether corrupt payments were made to government officials in South Africa to secure the contract.

The social grants tender has been marred by controversy:

• In April this year, reports revealed that Human Settlements Director-General Mr Thabane Zulu, a member of the South African Social Security Agency (SASSA) tender adjudication committee, received a R1.4 million deposit into his personal account a few weeks before deliberations on the bid commenced.

• It was also reported that another committee member received a R600 000 payment towards his mortgage bond soon after the contract was awarded to CPS.

• The involvement of President Zuma's lawyer, Michael Hulley, raised questions when he was brought in by SASSA as 'strategic adviser' for the bid.

• Key tender requirements were changed by the CEO of SASSA just nine days before the date on which applications for the tender closed.

• In August this year, Judge Elias Matojane declared the tender to be illegal and invalid, but it was not set aside.

I have already written to the Public Protector to investigate the awarding of the tender. I will now request that she shares her findings with the US Department of Justice and the FBI.

While these investigations are underway, both in South Africa and the United States, I will urge Minister Dlamini to take all the necessary steps to ensure there are no disruptions in the payment of grants to South Africa's 15 million grant recipients.

It is imperative that guilty parties involved in the illegal R10 billion tender must be held to account, without causing any further disruptions to grant beneficiaries.

Mike Waters, Shadow Minister of Social Development

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