The State Security Agency (SSA) has allegedly spent more than a billion rand in irregular expenditure over the past five years – and now refuses to account for this because its operations are “classified”.  

A joint investigation by Rapport and News24 has found that National Treasury has increasingly been at loggerheads with the SSA over the mismanagement of what has been estimated to amount to about R1.5 billion.

The abuse of funds allegedly includes the suspicious use of the SSA’s covert fund as well as breaches of prescribed procurement procedures.

Seven independent sources who are directly involved or have insight into Treasury and the country’s intelligence services confirmed that, between the 2012/13 and 2015/16 financial years, Treasury repeatedly asked the SSA for clarity on its expenditure. 

But, according to the same sources, the SSA won’t account for how this money was spent because its activities are “secret”. 

These sources say money budgeted for less secret operations was inexplicably moved to the covert fund and the spies can’t explain why that was necessary.

Last year, Treasury apparently even threatened to cut funding for secret operations entirely if the SSA could not account for at least some of its tender processes.  

“There was a big problem with the SSA’s funds,” said one source. “Treasury officials kept asking them how they tender for goods and services and they kept saying that they can’t tell us, because it is classified information. But some Treasury officials have the same level of security clearance as top SSA staff.

“Treasury understood they couldn’t have open tender processes and disclose their covert operations, but they asked SSA to at least submit a list of suppliers so that there could be a degree of oversight.” 

A second source, familiar with the negotiations between the SSA and Treasury, confirmed that SSA had asked to be exempt from prescribed tender processes and the Public Finance Management Act (PFMA) and other laws. 

“We always questioned if this sort of exemption would be justified,” said the source. 

These revelations come amid recent scandals in which it was alleged that intelligence services were being abused for political purposes. Earlier this month, Mail&Guardian reported that the SSA’s covert fund was abused to spy on Deputy President Cyril Ramaphosa. 

In 2014, City Press reported the existence of a covert unit which was allegedly tasked with driving political operations for President Jacob Zuma. A spy with close ties to Zuma, Thulani Dhlomo, was head of the special operations unit between 2012 and 2015. 

In 2014, City Press reported that this unit was linked to the campaign to purge senior SARS officials including acting commissioner Ivan Pillay and group executive Johan van Loggerenberg. 

But Dhlomo was last month appointed ambassador to Japan. Five sources said that this move came shortly after the irregular expenditure of hundreds of millions of rands of covert funds.  

Former SSA DG queried expenditure

It is understood that Sonto Kudjoe, the SSA’s former director general, resigned after repeatedly questioning the mismanagement of the unit’s finances.

In its 2013/14 annual report, the joint standing committee on intelligence indicated that the Department of State Security’s internal auditors had already found that the SSA’s covert funds were being misapplied and that procurement procedures were being violated. Nothing came of these findings.

In addition, the SSA received a qualified audit in the 2012/13 and 2014/15 financial years.

These Auditor General reports were tabled in Parliament as part of the joint standing committee on intelligence’s 2013/14 and 2015/16 annual reports. 

Repeated attempts to reach Dhlomo at his office in Japan were unsuccessful. 

Gift Masina, Dhlomo’s personal assistant and third secretary at the South African embassy in Tokyo, undertook to answer questions by email but failed to do so.

Treasury referred questions to the SSA, saying: “Unfortunately, the National Treasury officials from all the divisions have indicated they have no information on this matter”.

SSA spokesperson Brian Dube denied that the special operations unit had access to any “covert fund”, and insisted that the SSA sends monthly reports to Treasury.

“There have never been any audit findings about these unsubstantiated allegations. The SSA’s budget is allocated on the basis of an approved annual performance plan,” he said. 

* Do you have information for our investigative journalists? Send an email to tips@24.com