VZCZCXRO2267
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #0532 1571531
ZNR UUUUU ZZH
R 051531Z JUN 08
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 8971
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLO/AMEMBASSY LONDON 0180
UNCLAS MAPUTO 000532
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: KCOR PGOV PHUM PREL MZ
SUBJECT: LABOR MINISTRY REPORTS THEFT OF $8 MILLION FROM
SOCIAL SECURITY FUND
1. (U) On June 2, a commission of inquiry established by the
Ministry of Labor (MOL) announced that USD eight million had
been stolen from the National Institute of Social Security
(INSS) between 2002 and 2008. The commission's findings
indicate that the theft involved a series of fraudulent
operations, including over-invoicing, double payments,
kickbacks, and preferred direct tenders. According to the
commission, the fraudulent operations occurred in six of the
country's 11 provinces and were headed by the former director
of the INSS, Dulcinio Loforte.
2. (U) The INSS enjoys administrative autonomy but is
answerable to the MOL. Press and civil society openly and
publicly refer to it as one of the most corrupt government
entities in the country because of the perception that money
contributed to the fund is rarely used for its intended
purpose. In fact, this is the second time in three years
that the INSS has come under public scrutiny. In 2005, the
then-newly appointed Minister of Labor Helena Taipo fired a
previous INSS Director for allegations of corruption. By
law, employees in all sectors pay a percentage of their
salary to the INSS, which entitles them to paid benefits
during maternity leave, in the event of incapacitation, for
funerals, and to receive a retirement pension. Accessing
such benefits traditionally has been difficult and often
impossible. The media has reported cases whereby retirees
died before receiving a single pension payment.
3. (SBU) COMMENT: On the surface, the MOL's establishment of
the commission, its apparently thorough investigation, and
public announcement of findings is a positive development,
particularly as it relates to the government's announced
desire to fight corruption at all levels. However, the
Ministry only called the press conference because journalists
began questioning recent critical statements by the MOL
regarding the INSS. In the meantime, the MOL is taking
disciplinary action against Loforte and the Attorney
General's Office has initiated criminal proceedings. If the
proceedings are handled well and the investigation is made
public, the case could serve as a rare positive example of a
government ministry working to root out corruption in its
ranks. End Comment.
Chapman