The total amount overcharged since 2005 is believed to be at least 50 million pounds. (about 76 million US dollars). Since G4S is refusing to cooperate with the government’s investigation, the Jstice Minister, Chris Grayling, has called in the Serious Fraud Office (SFO), an independent department within the British public administration that investigates and prosecutes cases of major fraud and corruption.
The overcharging refers to the use by G4S of electronic tags. These are devices attached to criminals on parole or suspects awaiting trial. The tags monitor their whereabouts. But G4S invoiced the British government for tags supposedly placed on people who were back in prison, or who had left the country, or even suspects who had died.
One Ministry of Justice source cited in the British media, said that G4S was charging the government for 18,000 electronic tags, when the real number of people tagged was only about 15,000. The fraud came to light after an investigation by the consultancy and audit company Pricewaterhouse Coopers, which warned that overcharging might go back as far as 1999, which would substantially increase the losses to the government.
A second security company, Serco, is accused of the same overcharging. But unlike G4S, Serco is willing to cooperate with the government investigations. G4S simply declares that it has done nothing wrong, and has refused the government request for a further audit.
Addressing the House of Commons on Thursday, Grayling said that members of parliament “will share my astonishment that two of the government’s biggest suppliers would seek to charge in this way”.
Furthermore, some officials in the Justice Ministry “were aware of the potential problems, and yet did not take adequate steps to address it”. These officials are now facing disciplinary measures.
Grayling also announced an urgent review of the management of all his Ministry’s major contracts, which should report within a few months.
The scandal is likely to cost both G4S and Serco further contracts. Grayling is excluding G4S from bidding for a further electronic tagging contract, and the suitability of G4S and Serco for undertaking probation work has been thrown into doubt. The two companies were preparing to bid for contracts to supervise low to medium level offenders released on parole, much to the anger of the National Association of Probation Officers.
The Association’s general secretary, Ian Lawrence, said “we have long maintained that these companies are unfit for purpose when it comes to holding important public contracts. The outcome of the initial investigation into G4S and Serco suggests a good deal of malpractice has been discovered”.
A year ago, G4S was severely criticized for mishandling security at the London Olympic Games. It failed to hire enough security staff to cover the games, with the result that the government had to use troops who had just returned from Afghanistan to cover the venues.
G4S may also now face criminal charges in the case of an Angolan citizen, Jimmy Mubenga, who died while in GS custody. Mubenga died while three G4S guards were using excessive force as they thrust him onto a plane in order to deport him from Britain. An inquest this week ruled that Mubenga had been “unlawfully killed” – which makes it likely that prosecutors will now bring charges (of murder or manslaughter) against the G4S staff involved.
These scandals are highly embarrassing to the Conservative Party of Prime Minister David Cameron which is ideologically committed to outsourcing state functions to private companies, on the grounds that the private sector is supposedly more efficient than the public sector.
Mozambicans also have an interest in the fraudulent, incompetent and violent behaviour of G4S in its home country, since G4S is far and away the largest supplier of security services in Mozambique.
G4S has repeatedly clashed with its Mozambican workforce and with the Labour Ministry. So bad has the behavior of this company been that in 2006, Labour Minister Helena Taipo cancelled the work permit of the manager of its Mozambique, John Mortimer. In 2009, the work permits of other G4S managers were suspended, after workers accused them of racism. Bitter disputes also broke out over the G4S refusal to pay overtime, over shift work and over severance pay.
“G4S doesn’t respect Mozambique’s laws”, Taipo remarked at the time.
Post published in: Africa News