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ICIR Investigations of 2012: How Civil Servants Stole N60 Billion Pension Fund
An exclusive report on how over N60 billion was stolen from the pension funds of the Office of the Head of Service
This is the second in the series of our best investigative reports from last year. We are revisiting four of our best investigations in 2012 throughout January. This week, we revisit our story on the mindless pillage of pensioners’ money at the Pension Office of the Head of Service of the Federation.
The story, which was published on March 8, 2012, was the first in our series on pension fraud in Nigeria. Reports on fraud at the Police Pension Office and an attempt to cover up the scams have also been published.
Investigations into the fraud at the pension office of the head of service show that the director of the office, Sani Teidi Shuaibu, and his deputy, Phina Ukamaka Chidi colluded with bank officials and siphoned more than N60 billion of the funds meant for pensioners.
This they did by opening several illegal accounts into which they moved funds form the pension office. Thereafter, by a cobweb of dubious means including payment of ghost workers, award of bogus contracts, payment of collective allowances and outright stealing, the crooks at the pension office depleted monies meant for payment of pension and gratuity of retired civil servant.
At the time our story was published Shuaibu, Chidi and 30 others had just been charged to court on a 134 – count charge of conspiracy, fraud and corruption before Justice Adamu Bello of the Federal High Court, Abuja.
The monumental fraud had been discovered by the Pension Reform Task Team, PRTT, set up by former head of service, Steve Oronsaye, to reform the pension office. The PRTT, headed by Abdulrasheed Maina, reported its findings to the Economic and Financial Crimes Commission, EFCC, which investigated the matter and subsequently charged the culprits to court.
Our report was based on the EFCC investigation and our own independent enquiries. The findings were, indeed, mind boggling. Shuaibu alone was discovered to have more than N12 billion in his accounts. This is apart from assets worth several billions. All have so far been seized.
Also, investigators discovered more than N2.5 billion in Chidi’s house while over N35 billion was found in the illegal accounts opened by her and her boss.
One of the ways by which they pilfered pension funds was by putting ghost workers on the payroll of the pension office. The task team discovered that of 141,000 pensioners on the payroll, more than 71, 000 were ghosts.
The office had been collecting N5 billion every month for payment of pensions and gratuities but it was discovered that only N825 million was required for the purpose.
To perpetrate the fraud, Shuaibu, Chidi and others recruited several unscrupulous bank managers who helped them to open accounts without proper documentation so that the funds would not be traced to them.
The ICIR story gave details of several bank managers and how they helped register fake businesses and bank accounts for the pension crooks without the necessary know Your Customer, KYC, documentation.
Some of the bank managers even recruited other account owners they managed to pose as pensioners in order to receive illegal payments from the pension office, monies which were then paid back for a fee.
For their many illegal acts the bank managers were handsomely paid.
Curiously, though, while all the others involved in the scam have so far been charged to court, none of their collaborators in the banks without which the scheme would have failed has been brought to book. Officials of the EFCC keep telling our reporter that they are working on the case. The ICIR is set to do another story on the bankers who helped defraud the pension office.
There were four stories in the series on pension fraud in Nigeria and their impact can only be assessed collectively. The stories in the series included The Big Cover up, an expose on the attempt to cover up the pension scam; Looting Spree At Police Pension Office, a report of the pilfering of nearly N20 billion at the Police Pension Office and Pension Scam: How the Senate Betrayed Nigerian, which examined the Senate probe of the fraud.
First, the stories helped focus media attention on the pension fraud running into billions, thereby preventing a cover up. Investigation had actually shown that the stealing from pension funds had gone on for many years and the proceeds had been spread round to benefit civil servants, influential government officials, including those in the Presidency, as well as political parties. Infact, one of the pension rogues confessed that some of the stolen funds were used as slush funds for the election campaign of a major political party.
This informed why very powerful persons in the corridors of power tried to snuff life out of the investigations into the monumental scam.
Our story also helped to expose the bogus investigation carried out by the Senate, Some of the accused persons being tried in court had alleged that that the Senate committee on pensions and establishment collected a bribe of N3 billion from the money they stole. Although the chairman of the committee, Aloysius Etok, denied the charge, it had put a credibility slur on the body’s work. But the committee continued with its stained investigations.
In a cruel irony, the Etok – led committee appeared to want to protect the interest of the pension thieves but it has so far failed.