Presidency ‘unaware’ of Hulley’s secret grants meetings

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Presidency ‘unaware’ of Hulley’s secret grants meetings

The Presidency claims to be unaware of secret meetings that President Jacob Zuma’s lawyer Michael Hulley had with SA Social Security Agency (Sassa) officials on the payment of social grants, notes Legalbrief. Yet, according to the Sunday Times, President Jacob Zuma’s special adviser played a key role in ensuring that Cash Paymaster Services (CPS) would keep the lucrative contract to deliver more than 17m social grants to recipients. It says his intervention coincided with Social Development Minister Bathabile Dlamini flatly rejecting any payment option that did not involve CPS, raising questions about why the Minister was so intent on retaining the company. Secret meetings between top Sassa managers and Michael Hulley, Zuma’s special adviser, have raised questions about the Presidency’s role in the fiasco, suggests the Sunday Times. But in a brief statement yesterday, it said: ‘The Presidency is not aware of the said meetings.’ Hulley has been named as the person who advised Dlamini to go against Advocate Wim Trengove SC and three other independent legal opinions that recommended that she should let the Constitutional Court decide the fate of the CPS contract. Sassa has to respond to the Constitutional Court by today on who was responsible for deciding it would not be able to pay grants itself and whether a deal had been concluded with CPS. Arguments on the issue will be heard on Wednesday.

The Sunday Times says it was told by four independent sources that Hulley had two meetings with Dlamini and top Sassa officials in December last year, when he is said to have advised them to continue with the CPS contract. ‘His participation was very skewed towards CPS and extending their contract and (finding) ways of dealing with the legalities around it. He was very dismissive of Trengove’s opinion and that of three other senior counsel,’ an official who attended the meeting reportedly told the Sunday Times. Lawson Naidoo, executive secretary of the Council for the Advancement of the South African Constitution, said Dlamini needed to tell the Constitutional Court what Hulley’s role was in the matter and who had sought his legal opinion. ‘Hulley has a wide range of business interests. The Minister must explain what was his role as we all know that the (Department of Social Development) has its own legal advisers, as does Sassa.’ Advocate Paul Hoffman, of the Institute for Accountability in Southern Africa, said there was no way Hulley could give an objective opinion on the matter. ‘Michael Hulley is wrong and Wim Trengove is right. It is mind-boggling that the Minister can use Hulley’s opinion to overrule Trengove’s legal opinion. Hulley is the last person to give an objective opinion on this matter as he is also the President’s legal adviser.’ The Sunday Times says Hulley failed to respond to specific questions sent to him. And Zuma’s spokesperson, Bongani Ngqulunga, failed to respond to questions sent to him about Hulley’s role, or whether he was representing the President or acting in his personal capacity.

The Sunday Times report offers some detail about the secret meetings with Hulley, including the names of those in attendance. It says Dlamini and her top officials met Hulley at his Durban office on 30 December, when the contract with CPS was discussed. ‘Sassa’s controversial contract with CPS was top of the agenda and the Minister was chairing the meeting,’ an official who was present is quoted as saying. The newspaper says its sources also claim that Social Development DG Zane Dangor refused to attend the meeting because he wasn’t happy with Hulley meddling in the affairs of the department. Prior to the Durban meeting, Hulley had had a meeting, on 18 December, with Dlamini, Dangor and other high-ranking Sassa officials at the Intercontinental Hotel at OR Tambo International Airport. ‘The Minister had summoned us to an urgent official meeting at the airport and out of the blue Hulley, obviously with a prior arrangement with the Minister, arrived and told us that he was coming to see if he can offer his legal assistance about the Sassa and CPS matter,’ another official reportedly told the newspaper. The official said Sassa CEO Thokozani Magwaza and Dangor had a serious argument with Hulley. They were also not clear what his role in the matter was as Dlamini had not explained it. The official added that when Magwaza called for a special Sassa executive meeting at Emperors Palace on 20 February, Dlamini arrived uninvited and caused a scene, accusing the CEO of being a ‘traitor’. ‘The Minister accused Magwaza and some of the officials of stabbing her in the back by having meetings with the Treasury. She added that people should stop questioning Hulley’s role as there was nothing wrong with him as he is President Jacob Zuma’s legal adviser. ‘But Magwaza asked the Minister to explain what was Hulley’s role and mandate on the Sassa matter. She took her bags and left.’

Full Sunday Times report (subscription needed)

Adding to the ongoing confusion, it turns out there is no new contract between CPS and Sassa. DA spokesperson Bridget Masango said the party had received confirmation from the Social Development Department in response to an application in terms of the Promotion of Access to Information Act (PAIA) that no new contract existed between CPS and Sassa, according to a report on the IoL site. The DA is also concerned about the Hulley revelations. ‘This may point to improper actions by him with the aim of thwarting a judgment of a Constitutional Court and the DA will therefore report him to the Law Society for investigation,’ Masango said. ‘For some time the DA has been of the opinion that Dlamini has manufactured this crisis to ensure that CPS would be allowed to continue distributing the roughly R10bn in social grants. The vital question which must be asked is why is Dlamini so hell bent on making sure CPS continues to distribute grants?’

Full report on the IoL site

Magwaza has broken his silence on the issue, saying Dlamini blocked him from reporting back to the Constitutional Court. According to a City Press report, he listed a number of occasions – dating as far back as early February – when his office was ready to petition the court for guidance, only to be abruptly halted by last-minute instructions from Dlamini. Magwaza, who has been on sick leave for more than a week amid speculation that he may be suspended, reportedly told City Press that:

Dlamini got in the way of papers being filed in the Constitutional Court three times.

* The research report, submitted in October, which detailed Sassa’s inability to take over grant payments from CPS in April, was initially withheld from him when he took office in November.

* Dlamini’s aides told Sassa staff to take instructions from her attorney.

* Dlamini torpedoed plans to involve the SA Post Office in the distribution of grants.

* He was being victimised for recommending a 12-month temporary contract be secured with CPS, instead of the 24 to 36 months preferred by others.
Sources close to Dlamini reportedly told the newspaper that questions posed by the court last week – including whether Sassa and the Minister had ‘any objection to independent monitoring of any agreement’ – would be answered in a way that demonstrated ‘commitment to transparency’. Tim Sukazi, Dlamini’s attorney, was working around the clock to draft a contract that would be acceptable to all parties, including the Treasury. He said the information requested by the court would be answered candidly ‘to clear up a lot of things’.

Full City Press report

The Treasury’s position on the crisis will be reinforced by Finance Minister Pravin Gordhan tomorrow when he appears at a Scopa meeting. A News24 report notes committee chairperson Themba Godi said the meeting would help clear up Treasury’s stance on the proposed new contract with CPS. ‘The committee is looking forward to this engagement to get a complete picture of what led to this crisis and how it is being resolved,’ Godi said. He added the committee’s main concern was that the approval of grant payments for 1 April be done according to the prescripts of the laws governing public procurement. He also insisted that those responsible for the current crisis must be held accountable.

Full News24 report

The SA Post Office says it could be ready to take over the social grants payment contract from CPS in six months, according to a GroundUp report. Attorneys for the Post Office have written to the Black Sash asking for approval for an application to intervene in the case brought by the organisation, which is asking the court to take back oversight of social grant payments when the Sassa contract with CPS expires on 31 March. In the letter to the Black Sash, the attorneys say the Post Office would like the opportunity to show the court that it has the administrative capacity to take over from CPS. They say the Post Office would propose a six-month transition period. Granting the contract to the Post Office, an organ of state, would ‘be of benefit to the citizens of the country’ as a costs saving to the fiscus, they say.

Full GroundUp report

See also a TimesLIVE areport

The crisis has taken another unpleasant turn with the revelation that millions of Sassa bank cards will expire at the end of the year, says a Weekend Argus report. It is understood that it could take up to two years to replace all the cards – at ‘substantial’ cost – and grant beneficiaries would need to be re-registered. According to correspondence between Net1 and Sassa, it will take up to two years to replace all the beneficiary cards. Net1 has the technological systems to extend the cards’ longevity. Weekend Argus says it has seen correspondence, dated between May and December, between Net1 and Sassa where Net1 highlights the expiry date issue. In a letter to Sassa, Net1 director Serge Belamant said the company had conducted tests to establish how the lifespan of the cards could be extended for another 18 to 24 months, during which time Sassa was to have taken over the grant payment system. However, he said in the letter, ‘this issuing process, in our view, will prove difficult to achieve in less than 24 months’. Belamant said hundreds of Sassa branches would need to be upgraded. ‘We believe that 50% of all cards could be updated by 1 April 2017.’ In a letter sent in May, Belamant said the process would also require the registration of grant beneficiaries. He pointed out the initial registration process had involved complex logistics and had cost CPS more than R1bn.

Full Weekend Argus report (subscription needed)

The department’s approach to the Constitutional Court is an attempt to set the court against the poor masses, who might be affected by a negative ruling, political analyst Ralph Mathekga argues. According to a report in The Citizen, he said it was shocking that Dlamini wanted the court to accept CPS as the grants payment service provider when the court had declared its previous contract to be invalid. ‘Why on earth do they want to continue with a company that is a liability and whose contract was proved to be irregularly awarded by the same court,’ he asked. The analyst concluded that the reason must be that the department wanted the beneficiaries to blame the court if they did not get their grants on 1 April. ‘They are setting up the court for failure and that is not good,’ he added.

Full report in The Citizen

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