Extractive Sector Corruption Media Report: July 2017

In our monthly edition, we strive to collate media report on extractive sector corruption, and this is to ensure that discussion on the subject matter stays a national discourse that will spur effective reform in the extractive sector. It also helps to renew Publish What You Pay efforts in its work in ensuring transparency in the extractive sector.

In this edition, we encourage our readers and stakeholders to put pressure on the authorities to address issues in this July 2017 media trend.

By June 28, 2017, Reuters published Natural Resource Governance Institute (NRGI) study on Nigeria’s Excess Crude Account (ECA) summary report. The study showed how Nigeria’s sovereign wealth fund is the most world’s poorly governed.

The government discloses almost none of the rules or practices governing deposits, withdrawals or investments of the ECA,” it is so opaque that there is no way to know how much may be lost to mismanagement.” The study revealed.

In the same vein, by July 25, 2017, Tribune reported how N11 billion worth of crude got missing and also the recovery of N2 billion from capital oil by the Nigerian National Petroleum Corporation (NNPC) as part of the N11 billion missing fund.

The chief operating officer of the Petroleum Pricing and Marketing Company (PPMC) Nkem Obi said Mr. Andy Ubah returned N2 billion out of the N11 billion worth of products diverted.

By July 14, 2017, the United States in its press release disclosed that she has filed a suit seeking the forfeiture of illicit wealth acquired by the managers of Nigeria’s oil and gas. In the release by Mr. Kenneth A, the Acting Assistant Attorney General and his team, the US Department of Justice says it seeks the forfeiture and recovery of approximately $144 million in assets laundered in through the United States.

According to US government, from 2011 to 2015, two Nigerians Mr. Kolawole Akanni Aluko and Olajide Omokore in collaboration with other persons paid bribes to Mrs. Diezani Alison-Madueke, the Nigeria’s former Minister for Petroleum Resources.

Madueke utilized her influence using Strategic Alliance Agreements (SAAs) that allowed for worthwhile oil contracts to Atlantic Energy Drilling Concepts Nigeria Limited and Atlantic Energy Brass Development Limited; both companies belong to Aluko and Omokore.

The companies were to finance the exploration and production operations of eight on-shore oil and gas blocks. And in return, they are expected to receive a portion of the oil and gas produced.

The US government discovered that the companies made available only a small part of the agreed terms, while in some cases failed the agreed terms completely.

The companies refused to meet other obligations under the SAAs, which the payment of $120 million entry fee is part of them.

In spite of that, the companies had the permission to lift and sell more than $1.5 billion worth of Nigerian crude oil.

The US government discovered that some of the illicitly wealth laundered were used to purchase numerous properties including a $50 million condominium located in one of Manhattan’s most expensive buildings – 157 W. 57th Street – and the Galactica Star, an $80 million yacht.

“The United States is not a safe haven for the proceeds of corruption,” Attorney General Blanco the Acting Assistant Attorney said. “The US action demonstrates the country’s commitment to working with law enforcement globally to trace and recover the proceeds of corruption, no matter the source.

Corrupt foreign officials and business executives should make no mistake: if illicit funds are within the reach of the United States, we will seek to forfeit them and to return them to the victims from whom they were stolen.” The state warned.

America will not tolerate using her institutions to launder proceeds of foreign corruption and warned that this should serve as a warning to other corrupt foreign officials that the United States is not open for their business.”

In connection with Diezani, by July 20, 2017, Premium Times reported Mr. Igho Sanomi, the Managing Director, Taleveras Oil Group as the third actor who aided Diezani in laundering wealth.

Taleveras, in collaboration with oil traders Arcadia and Glencore, paid $1.2 billion into Kola Aluko’s account in Switzerland. The amount was proceeds from crude oil lifted from Aluko and Omokore’s company.

In a complementary media report, by July 19, 2017, daily post reported how a Federal High Court in Lagos gave order for the forfeiture of an estate in Banana Island, Lagos worth $37.5million belonging to Mrs. Diezani-Alison Madueke, the former Nigeria’s Minister of Petroleum.

Mr. Cuka Obiozor, the Chief Judge also ordered the temporary forfeiture of $2,740,197.96 and N84, 537,840.70, alleged to be part of rent collected on the property. The fund was traced to Zenith Bank and is domiciled in account number 1013612486.

The verdict was pronounced arising from the ex parte application filed before the court by Mr. Anselem Ozioko, a counsel for the Economic and Financial Crimes Commission (EFCC).

In view of the above media reports, we call on the Nigerians to hold governments to account for the ways in which their natural resources revenues are managed.

Publish What You Pay-Nigeria