Looting Spree at Police Pension Office is the second part of the series on the corruption in pension administration in Nigeria
An exclusive expose on the brazen looting of funds meant for retired police officers by civil servants.
An N18 billion fraud has been uncovered at the Police Pension Office, PPO, even as investigations continue into monumental fraud in pension funds administration in Nigeria.
The discovery of the fraud led to the arrest two weeks ago of seven persons including a permanent secretary, three directors and other staff of the accounts department in the PPO.
They were arrested by the Economic and Financial Crimes Commission, EFCC, for questioning but have since been released on administrative bail.
Those arrested include Abubakar Kigo, former director, PPO, now permanent secretary, ministry of Niger Delta; Esias Dangabar a retired director, PPO; Ahmed Wada, former deputy, PPO, now director in the ministry of sports and Abdullahi Umar, deputy director, ministry of works. Others are John Yusuf, an accountant and a lady named Vicky, a cashier, both who work in the PPO.
The arrested public officials allegedly colluded to plunder funds specifically meant for the pension of retired police officers. In a brazen and bizarre manner, on a daily basis, they recklessly withdrew millions of naira from Police pension funds, brought the cash to the office and shared it.
Investigations show that they used the name of the director of the PPO to withdraw the money. Between 2008 and June 2011, a total of N18.1 billion was illegally drawn from Police pension funds by the officials using some 13,874 check leaflets.
Documents and bank statements in the possession of icirnigeria.org show that from as far back as 2008 the conspirators wrote and cashed several cheques daily, sometimes up to 30, for amounts ranging from N2.8 million to N3 million.
Sometimes, it was reliably learnt, up to N250 million was withdrawn by the civil servants in one week. Vicky, the cashier, was the one who took the cheques to the bank. They operated this way with many of the banks where the PPO had accounts.
The senior civil servants did not even bother to disguise their criminal activities by awarding contracts or making payments to ghost pensioners as others have done but just wrote cheques payable to the director in the pension office.
Contrary to government regulations that all disbursements from state accounts be made through e – payment, the civil servants instructed banks to issue the pension office with cheque books which they used in the looting spree.
Wilson Uwujaren, EFCC spokesman yesterday confirmed the arrest of the civil servants although he would not give the names of those arrested. He stated that the commission was still investigating the fraud which he estimated at N14 billion but could not say when the suspects would be charged to court.
Uwujaren also declined to name the bank involved, revealing only that it was an old generation bank. Asked why no bank had so far been prosecuted in the gale of scandals sweeping pension offices across the country, the EFCC spokesperson stated that the commission was also working on prosecuting the banks involved.
But investigations show that the total amount is actually N18 billion. In fact, a source at the PPO confided that it might be more as it would be impossible for investigators to unearth the entire fraud because many of the accounts used had been closed while some of the transactions involved banks that had since collapsed.
“The scam goes back possibly to about 2005 but the problem is that many of the accounts used have been closed and the banks have since folded up,” the source stated.
From all indications, the fraud might also have involved persons higher in hierarchy than all the arrested public officials. It was gathered that it could have involved some top brass in the Nigeria Police Force and the ministry of Police affair.
For example, our source said that one Okafor, a deputy commissioner of police, DCP, partook in the thieving jamboree claiming that he was collecting money to “settle” the police hierarchy.
In the same vein, an official of the police affairs ministry is also said to have collected money which he claimed was going to the topmost level of the ministry.
The Police pension office has been a cesspool of corruption for years as it became a source of free funds for many senior public servants.
The situation forced Oladapo Afolabi, then Head of Service of the Federation, HOSF to second the Pension Reform Task Team, PRTT, in his office to the PPO in June 2011to reorganise it. That was when the bubble really burst on the years of looting.
The team led by Abdulrasheed Maina discovered that while the office had been collecting N1.593 billion monthly for payment of pensioners, the actual payment it had been making was N462 million.
This meant that over N1 billion was misappropriated monthly by officials who manage the office.
It was gathered that the fraud was reported to the EFCC in July 2011under Farida Waziri, the commission’s former chairman but no successful investigation followed.
Till date nobody has been arrested or prosecuted for the billions of naira that must have been stolen over the years.
However, that is not the only scandalous discovery made by the task team. While examining the books of the police pension office, it discovered N28 billion in a secret account that had been there unused for over six months.
However, curiously, when the task team commenced the process of returning the funds into government treasury, it was told to stop its work by Afolabi who commissioned them to reorganize the PPO in the first instance. That was just a month into its three month mandate.
In an interview with icirnigeria.org in early January when Maina was asked why his team’s work was stopped he said he could not explain it.
“I really don’t know. There was no formal letter. The task team was given a letter to go and reorganise the Police pension office between June 9 and September 9, 2010. We went out on June 9 and on August 18 I was called and told to hand over to a new director of pension. We requested for a letter to that effect but we were not given any.”
See full text in Interviews section.
But before the task team was asked to hands off Police pension matters it had also discovered what it called an illegal withdrawal of N119, 979,952.85 from Police pension office account.
The withdrawal was done without the authorisation, consent or mandate of members of the task team who were signatories to the account. It was also made at a time when the administration of the Police pension office was in confusion as to who was in charge.
As Afolabi asked Maina and his team to leave the Police pension office he appointed Kolawole Adeyemi to replace him. But as there was no official communication to the task team to leave it stayed put.
However, Adeyemi wrote to banks trying to make himself a signatory to the Police pension accounts but was rebuffed by the banks. It was at this time that the N119 million was withdrawn. It was gathered that the Independent Corrupt Practices and other related offences Commission, ICPC, has commenced investigation into the alleged illegal withdrawal.
Investigations by icirnigeria.org show that Adeyemi signed the mandate card for the transaction using the old system that was employed in the past to pay pensioners.
It was discovered that when the task team started its work, it disengaged System Specs, a firm of financial consultants which devised the payment platform used in paying pensioners in the Police pension office.
However, Adeyemi, it was discovered, took recourse to the old system used by System Specs to effect the N119 million transaction.
The money was withdrawn from the pension office’s account with First Bank and the reason given for the withdrawal was “salaries/supplementary pay/June 2011.”
(Read more about the confused state of the administration of the Police pension office in “The Big Cover Up” the first part of the series on pension scams in Nigeria, “Feasting on Pension Funds.”)
Further investigations revealed that Adeyemi acted on the authority of the minister of Police affairs.
It was gathered that the minister had received a memo from Anyim Pius Anyim, secretary to the government of the Federation, SGF, forwarding a complaint by some retired police officers about none payment of their pension arrears. It was the minister who directed that the HOSF (then Afolabi) look into the matter and resolve it.
Adeyemi, therefore, acted on the orders of Afolabi to withdraw the said amount for the payment of supplementary salaries.
A lot of questions are still begging for answers over this transaction. It is curious why Afolabi did not instruct Maina and the other members of his team who are signatories to the account to make the payment.
If the argument was that he had instructed the team to hand over to Adeyemi why not tidy up the issue of a rightful signatory to the account instead of using a moribund system to effect the transaction.
But there are more critical questions as investigations show. There are queries being raised over the claim that the money was withdrawn for payment of supplementary salaries.
Maina contends that all pensions for June 2011 had been paid by his team before it was asked to leave.
Also, he said that the money could not have been meant for the payment of arrears or gratuities because money had also been released for the specific purpose of paying the arrears.
Besides, but forensic examination of the payroll has shown that many of the names on the payroll do not belong to retired policemen.
The ICPC invited Adeyemi and others for questioning but was still investigating the matter when the most recent scandal blew open in the pension office.
Those arrested in connection with the N14 billion fraud have however been released on administrative bail by the EFCC.