Lebanon's National Social Security Fund comes under fire for alleged corruption
It is no longer a secret, in the past few months it has become evident that there is widespread corruption and waste in the National Social Security Fund (NSSF). There is a network forging quittances (documents releasing a person from debt) that intended to burn down social security warehouses to cover its tracks. The network in question embezzled about one billion Lebanese liras (LL) ($661,726) and its members were treated during preliminary investigations as though they had committed simple administrative violations. And finally, recreational trips to Geneva at the expense of social security recipients have become commonplace.
Is it a matter of corruption or waste at the NSSF? The public prosecution of the Audit Bureau will have the answer soon, after its investigations of two issues - forging quittances and travel to Geneva - are over.
At the NSSF, uneasiness and anxiety prevail as it became evident that there is widespread corruption at social security offices. The last example was an embezzlement network at the Chekka office that took LL 932 million ($616,728). Internal audits of other networks are underway but the problem is that the investigation and audits have been slow, taking more than five months in the Chekka case.
On June 4, the public prosecution of the Audit Bureau sent a letter to the NSSF demanding a detailed statement of information about its members’ travels to Geneva. The investigation into the “circumstances of the travels of some of the officers of the board of directors” is centered on the possibility money of social security recipients is being wasted.
But the information it is demanding is far-reaching, to the extent that it wants to view the minutes of the officers of the board of directors and the board’s meetings concerning the decision to travel to Geneva. It also wants to inspect the professional duties of each person who left Lebanon at the expense of the NSSF.
It is natural for the Audit Bureau’s public prosecution to demand to know the legal basis upon which the decision to travel was taken, to have a statement of the financial costs of these trips, and to know the official capacity of everyone who finalized the necessary procedures and gave money to those who travelled.
The issue of traveling to Geneva goes back to early last May. At the time, officers of the NSSF’s board of directors convened a meeting to discuss a suggestion made by the fund’s director-general that three representatives of the fund travel to the International Labor Conference in Geneva. The three people were the Director-General Mohammed Karaki, head of the technical committee Samir Aoun and Administrative Director Nabil Samaan.
The only person among the officers of the board of directors who opposed the decision was Fadlallah Sharif. A week later, officers of the board held another meeting in which the board’s chairperson, Tobia Zakhia, asked to add his name to represent the fund. In addition, president of the General Confederation of Lebanese Workers, Ghassan Ghosn, suggested adding the name of the workers’ representative at the board, George Alam.
These proposals provoked seven members of the board of directors who argued that the officers of the board are confiscating the board’s powers by approving these trips to Geneva. They signed a letter addressed to the board demanding that it reclaim its powers. This letter, however, was not presented at the board of directors’ meeting.
Later developments did not coincide with the deliberations of the officers of the board. Karaki, under pressure from the Amal Movement’s labor office, decided not to travel to Geneva. Especially after it was revealed that the cost of the delegation’s trips to the Swiss city exceeded $155,000 and may have cost $200,000. Besides, there were no issues related to social security on the conference’s agenda, which meant there is no need to travel and the trips were going to be more recreational in nature.
Karaki forced Samaan, the administrative director, not to travel while Zakhia, the board’s chairperson, cancelled his travel plans. But Aoun, the head of the technical committee, insisted on traveling despite warnings by the fund’s finance director that he cannot issue the necessary funds allowing him to stay at a five-star hotel.
At this point, board member George Alam was told that if the NSSF did not pay for the travel expenses that the General Confederation of Lebanese Workers Fund would.
The issue now is in the hands of the Audit Bureau’s public prosecution. The investigations there will be different. Perhaps they will expand to include previous travel expenditures and put the brakes on future travels and all recreational trips at the expense of social security benefit recipients. The results of the investigations will also clarify the powers of the board of directors versus those of the board’s officers.
The other issue that preoccupied the Audit Bureau’s public prosecution is the network forging financial quittances at the NSSF. This is not new. The Information Branch was handling this issue when it was pursuing an investigation of the fire at the fund’s warehouses months ago. It found out that some NNSF employees are issuing quittances for companies that do not reflect the real data about their financial standing at the NSSF.
When all this came out, the financial public prosecution took legal action against one of the fund’s employees and a number of its inspectors. The Audit Bureau’s public prosecution, which is different from the financial public prosecution, decided to conduct separate investigations to determine the financial crimes committed and unearth the sources of corruption [at the NSSF] which has produced these financial violations. The Audit Bureau's public prosecution asked for information about the fraudulent quittances, the procedures that precede issuing them as well as the people responsible for these procedures.
The third item concerning corruption and waste is the internal audit at the Chekka office and the LL 932 million ($621,333) fraud and embezzlement operations which benefited a group of people, including physicians and staff at the fund. Management exposed this case a few days ago in an attempt to appear as the hero after the investigation lingered in the offices of internal audits for five months, according to some senior staff at the NSSF. The preliminary procedures taken against those responsible for this theft were customary and did not even include temporary suspension from work. Instead, these people were transferred to other offices where they will carry on with their professional responsibilities.
According to informed sources, there are whispers behind closed doors at the NSSF about widespread waste in more than one professional position and office. But “the investigations are slow and are unlikely to expose such activities. There is no political will to reach real results.”
- As American decade of easy money ends, Gulf currencies brace themselves for a 'nervous breakdown'
- More money to be taken care of: private wealth growth in the GCC exposes need for prudence
- With $100 billion in foreign reserves: is Libya's central bank monopolizing the country's economic potential?
- After 23 years in office,why was the UAE's central bank governor replaced?
- Why Turkey's 'tense' relations with rating agencies is damaging