The embattled State Security Agency (SSA) has been rocked by yet another potentially embarrassing episode: the appointment of tainted senior spy Graham Engel as head of operations in the domestic intelligence branch. 

Engel is a close confidante of former spy boss Arthur Fraser, who was moved to correctional services in 2018 by President Cyril Ramaphosa after Fraser was implicated in several allegations of malfeasance at the SSA. 

Top of the charges against Fraser is that he ran an illegal parallel intelligence structure, called the Principal Agent Network (PAN), as director-general of the SSA.

A high-level panel investigation into the SSA under Fraser found that the PAN was involved in "serious criminal behaviour... under the guise of conducting covert work and that this behaviour may have involved theft, forgery and uttering, fraud, corruption and even bordered on organised crime".

Engel managed the PAN project for Fraser and was suspended for a number of years while the project was under investigation.

He has now made a stunning comeback to the SSA in a move that many interpret as a sign of Fraser claiming back influence in the intelligence agency.

Engel is viewed as Fraser's "lieutenant".  

News24 understands that Engel's appointment this month as deputy director-general (DDG): operations for domestic intelligence has raised eyebrows in the security cluster. 

The PAN gained notoriety in 2018, with the publication of journalist Jacques Pauw's book The President's Keepers, that blew the lid off Fraser's role in the Jacob Zuma state capture years.

Pauw claimed that Engel was Fraser's brother-in-law, but this was denied by the former spy boss post-publication.

Engel's appointment was part of an instruction given by Ramaphosa to Intelligence Minister Ayanda Dlodlo during a meeting with the ANC's top six leaders earlier this year to fill vacancies in the troubled agency. 

Dlodlo's detractors have accused her of allowing "Fraser's people" to return to their positions in the SSA.

Fraser was moved from the SSA in 2018 amid allegations that he presided over corruption and the politicisation of the agency.

He has denied the allegations made against him. 

Sources critical of the appointment said this would see "Fraser's hand return" to the SSA and that Engel had remained close to Fraser. 

There are also concerns about the outcome of Engel's suspension and what had happened to the allegations against him for his role in the running of PAN. 

During his evidence at the Zondo commission, the chairperson of the high-level panel, Dr Sydney Mufamadi, testified that, although the concept of a PAN is not unusual, the way it was structured and operated under Fraser and Engel "evolved into a methodology designed to avoid or bypass the procedural requirements for recruitment of staff, disbursement of funds and procurement".

Various allegations of criminality with the running of PAN were made to Mufamadi's panel, including the signing of fraudulent contracts, payments to people without valid contracts, the employment of family members and missing funds and assets.

Fraser confirmed his own son was employed by a front company that ran a warehouse for the SSA.

Mufamadi noted in his evidence that, despite PAN being shut down in 2011, there had been no formal action or consequences for the people who ran it. 

"How is Dlodlo cleaning up the agency if someone like Engel is appointed," a source critical of his appointment told News24. 

Dlodlo's supporters have argued that the minister had made appointments in consultation with her deputy, Zizi Kodwa, and the acting director-general Loyiso Jafta. 

A source sympathetic to the minister said: "The minister was appointed a year after Fraser left. She does not know who are Fraser's people and who are not. What she sees are people who have been sitting at home for years and there are no conclusions to the action taken against them by the DG. You cannot have an organisation where there are so many vacancies. DDG domestic intelligence is a critical position that needed to be filled." 

The source said the criticism about Engel's appointment was linked to a "turf war" between Dlodlo and Jafta. 

SSA spokesperson Mava Scott said the agency would not comment on the matter.

News24 spoke to a third source, who sought to disprove the assertion that Dlodlo was in favour of Fraser.

"If we say we can't appoint Fraser's people, we would probably have to shut down the 'Farm' (the SSA headquarters)," the person, who requested anonymity, said. 

The person further noted that "almost every senior person in that building has their hands dirty". 

"You can't say one person is dirtier than the next. There are allegations all over. That is why we are hoping, once you have a forensic investigation, you will get to the bottom of it," he said. 

News24 reported last week that Dlodlo had appointed law firm Bowmans to conduct a forensic investigation into allegations of corruption and wrongdoing at the SSA. 

This was after shocking revelations were made by Mufamadi and Jafta to the Zondo commission, which Dlodlo unsuccessfully tried to stop. 

The evidence also prompted an attempted raid by the National Prosecuting Authority's Investigative Directorate on Thursday at the 'Farm', which failed after the SSA refused prosecutors and investigators access. 

The commission heard how Fraser was at the centre of misconduct and corruption at the agency. He has denied the allegations and has laid perjury charges against his accusers. 

Last week, Fraser also launched an application to the Zondo commission to compel the SSA to declassify information he wants in order to testify.