In clearing the system of Kramers, the Ismail government claims to have busted c. 70,000 counterfeit smart cards used in the commodity subsidies program, government sources tell Al Borsa. The cards were allegedly used by government employees and distributors of Supply Ministry-provided goods, the source added. Data from the company making the smart cards was stolen by employees, who then produced the cards on a wide scale. The government has reportedly withheld tens of mns of EGP in payments owing to two card suppliers. Back in March, Reuters’ Eric Knecht — who broke the story of systemic fraud in the subsidy smart card system — had identified SMART, a private company operating in Cairo, as one of the main producers of ration cards. Knecht had correctly pointed to this little discussed element of the commodities subsidies system as one of the leading drain in the government’s subsidy budget. To give you a gauge: 70,000 smart cards would have provided families with EGP 1.4 mn worth of goods per day, representing north of EGP 500 mn state spending a year — and that’s not counting the bread points tacked onto the cards.