© 2018 - International Centre for Investigative Reporting
Again, Civil Servants Loot Pension Funds
Impunity Reigns as civil servants continue the pillage of pension funds
In spite of the trial of many of their former bosses for stealing billions, senior civil servants in the office of the Head of the Civil Service of the Federation, HOCSF, have again started looting pension funds meant for the payment of pensioners.
Like before, the civil servants who manage pension funds at the office of the HOCSF have employed a number of ways by which they pilfer pension funds, including the use of ghost and fake pensioners, awards of dubious contracts and embarking on bogus training programmes.
The new onslaught of looting in the pension office has affected the payment of pensions and gratuities to tens of thousands of retirees since November when a new team took over the administration of the funds.
The national chairman of the Association of Federal Public Service Retirees, Emmanuel Akinola Omoyeni, alleged that “Up to now, 80% of pensioners have not received their payments for November and December, 2012.”
In a protest letter written by the retirees to President Goodluck Jonathan seeking his intervention, signed by Omoyeni, they also allege that the arrears of about 4,000 pensioners which was approved by the disbanded Pension Reform Task Team, PRTT, for payment in November 2012 has also not been paid although money had been made available for the exercise.
Investigations by the icirnigeria.org showed that since November when a new team took over the administration of the pension office from the PRTT, officials have reverted to the old system employed in looting pensioners’ funds, using the same brazen tactics.
The former director of the office, Sani Teidi Shuaibu, and his deputy, Phina Ukamaka Chidi along with 30 others are before a Federal High Court in Abuja facing a 23 – count charge of stealing over N30 billion of the pension funds.
The new lords of the HOCSF pension office allegedly directing the looting now are V.A. Zafi, director of pension, Charles Wali, assistant director, pension accounts and John Atume, an accountant and internal auditor.
The first thing the new team did was to dismantle the biometric system developed by the PRTT which exposed the monumental pilfering that Shuaibu and others had perpetrated in the old order.
Through the nationwide biometrics conducted by the task team, it had been discovered that over 71,000 fake of ghost pensioners had been on the pension payroll and that officials had been collecting nearly one billion naira illegally monthly and pocketing it.
The Wali – led team, in order to revert to the old system, abandoned the database generated from the biometrics exercise by the task team and with which pensioners had been paid for months.
Insiders told our reporter that the task team did not do any handing over to any member of the new team and so they did not have anything to work with. But that was okay by them as it fit exactly into their plans.
What they did was to approach the banks through which pensioners were paid to collect payment schedules for as far back as June 2012. Thus, all the retirees brought into the payroll between then and November have been excluded from payment.
At the time that the Wali team took over, the database showed that there were 129,000 genuine pensioners on the payroll of the HOCSF pension office.
However, the payment schedule of June 2012 obtained from banks had far less than that.
Sources in the pension office who are miffed by the return of the old system of looting told icirnigeria.org that Wali and others have made up the shortfall with fake pensioners.
That is what accounts for the non-payment since November of pension to thousands of retirees who had been on the payroll before. Their names have been replaced by fake pensioners.
A source in the HOCSF’s pension office said that officials there had been allocated the number of fake pensioners to contribute to the payroll and that senior persons have thousands of such ghost pensioners on the list now.
Even then, it appears that they want to take the looting to another level, apparently not satisfied with the number of fake pensioners they can add to the payroll.
Our sources said that the strategy the pension office bosses have adopted is to arrange for yet more persons to claim that they are pensioners who have not been captured in the payroll.
One official said that some of the persons being used to make such claims are the same crooks who were previously used before as ghosts to pad up the list of pensioners but were discovered and yanked off by the PRTT.
The pension office has so far claimed that there are some 10,000 pensioners who have lodged complaints of not being captured in the payroll. This claim, it appears, has got the head of service, Bukar Abba Aji, hoodwinked as he last week set up a 25 – member pension complaint resolution committee.
A statement by the director of press in the office of the Head of service, Tope Ajakaiye, said the committee was set up to resolve more than 10,000 complaints on pension payments and related issues.
Interestingly, and ironically too, the committee is headed by Zafi, one of the men behind the attempt to load the payroll with fake pensioners.
However, taking a cue from other pension thieves before them, these new rogues have also devised other means of dipping their hands in funds meant solely for payments to pensioners. One such method is to award bogus contracts to themselves through proxies.
Because the contract awards are fraudulent, payments for them are fraught with irregularities. For example payments for such contracts are made without going through normal auditing processes.
Also, in many cases, although the contracts are awarded to companies, payments are made into private accounts and when they are made to the companies’ accounts, they find their way back into the pockets of officials of the pension office.
In one such alleged bogus contract payment, the pension office claimed that it employed the services of a consultant, Consult and Capital Ltd, to “verify, reconcile and recover all trapped funds belonging to the OHCSF in distressed City Bank Plc and AFEX Bank”.
In a memo written by Wali on March 19, 2013, the director observed that the job which was contracted out to the consultant in 2010 had been concluded as he had recovered the sum of N806,741,771 previously trapped in City Bank and recommended that Consult and Capital Ltd be paid of N80, 669,177.10 , being 10% of the funds recouped.
However, it is alleged that the original agreement with the consultant was that he would be paid 5% of any funds recovered or N30 million or whichever of the two options is lower.
However, after finishing the job, it is alleged that the consultant was asked by Wali to jerk up his claim to 10%.
Ordinarily, in the civil service, when a contractor seeks upward review of the cost of a job, a committee is set up to review the request and make appropriate recommendation. But in this case no such committee was set up and no recommendation was made or followed.
All that the pension director did to effect the review was write a memo recommending that 10 % of the total sum recovered be paid to the consultant.
When our reporter spoke to the consultant, Olumuyiwa Yemi OyeniyI, he said he did legitimate business and only got paid for services he rendered. According to him, he never bargained or agreed to be paid 5% for the job, in fact, maintaining that he charged 15 % initially but was finally paid 10%.
” I never bargained for 5%. How could i? The money had been there for seven to eight years and they did not even know about it until I told them. So they could not have dictated terms to me,” he said.
However, contrary to Wali’s claim in his memo that the consultancy job was given out in 2010, Oyeniyi said that he got it in 2012.
He denied doing anything illegal or untoward, adding: “I am a Christian and a pastor. I would not even have given any bribe if they had asked.”
Another dubious payment made by Wali and Zafi is the sum of N90 million paid to the Nigerian Union of Pensioners, NUP.
In a memo raised by Zafi recommending the payment of the money to the union, he recalled that President Goodluck Jonathan had approved the payment of 1% check – off dues to NUP from November, 2012.
He also noted that the presidential approval was given after a meeting between President Jonathan and the leadership of the Nigerian Labour Congress, NLC, during which a planned strike by workers on the plight of pensioners was discussed.
Zafi said that one of the conditions given for calling off the strike was the restoration of the 1% check off dues to NUP. The assistant director, therefore, recommended the payment of N72, 282,686.92 being arrears of the 1% check off dues to NUP.
However, this was a well – orchestrated fraud, by which even President Jonathan was deceived.
First, the memo raised by Zafi recommended the payment of N72, 282,686.92 as 1% check off dues for five months to NUP. But the voucher raised and the cheque issued to the union was for N90 million, which is N17, 717,313.08 more.
More importantly, the President was not told that check off dues were not deducted from payments to pensioners and so nothing was due to be remitted to the pensioners’ union.
Before now, 1% was deducted from monthly pension paid to retirees. These checks off dues were then remitted to the NUP to help in administering the union’s affairs. However, the deduction of check off dues from pensioners’ pay was stopped last year after the task team discovered a huge fraud in the union. It was revealed that the leadership of the union had been diverting funds running into billions into private pockets.
In fact, it was discovered that the national president of NUP, Ali Abacha and the national secretary, Actor Zal, colluded with officials of the pension office to steal billions meant for pensioners.
The Economic and Financial Crimes Commission, EFCC, which investigated the matter has since dragged Abacha and Zal before the Federal High Court, Abuja.
The agency said that the three men stole a total of nearly N3 billion from pensioners’ funds. All the accused persons are out on bail while their trial continues.
However, it is the same corrupt leadership of the NUP being prosecuted in court for diversion of funds that the pension office of the HOCSF has paid N90 million with the President’s approval.
Pensioners believe that, like before, the money would not be used for the welfare or issues concerning them but would end up in private pockets.
Another strategy employed in stealing pensioners’ funds in the HOCSF’s office is by organising local and international training for staff. In many cases, the vouchers for the payments for the training programmes never passed through the audit department.
In a lot of cases, payments were made and vouchers raised long after that.
In one such training programme involving about 40 persons, officials collected payments to organise the sessions for five days but ended up spending only two days, pocketing the money for organising the event as well as stipends to staff for three days.
It was equally gathered that officials of the pension office also claimed that they were sending about 20 people overseas for training and collected sums running into several millions but the programme never held and no money was returned.
For these dubious payments, Wali and Zafi are alleged to use Atume, an auditor recently transferred to the pension office from the Federal Pay Office in Bayelsa.
He is the one who approved dubious vouchers that every other auditor refuses to clear. Although there are four or five persons who can sign vouchers, Atume’s signature appears on most of the vouchers approved for payment, many of them questionable.
Sources in the office said that when he just resumed and did not have the official audit stamp of the office of the HOCSF, Atume used the one he brought from his former office in Bayelsa until he was cautioned.
Pension funds administration in Nigeria came under close scrutiny last year with the discovery of monumental looting in the pension unit of the office of head of service and the police pension office.
While Shuaibu and other former officials of the HOCSF’s pension office are being prosecuted for stealing over N30 billion, at the police pension office, a former director who became a permanent secretary and others are being tried for pilfering over N40 billion.
Those being tried at the Federal High Court, Abuja include Abubakar Kigo, former director in the pension office and permanent secretary, ministry of Niger Delta; Esias Dangabar a retired director; Ahmed Wada, former deputy director, PPO, now director in the ministry of sports and Abdullahi Umar, deputy director.