The $9bn judicial scam against Nigeria (II)

Tribune Online
The $9bn judicial scam against Nigeria (II)

After our prolegomenon of last week, the global financial information giant, Bloomberg, corroborates our suspicion that the PI&D vs. FGN case may turn out to be one of the biggest scams of the century.

Oil mogul General Theophilus Yakubu Danjuma (Rtd.) confirms that it was in fact his company that made the proposal for a gas processing plant to the federal government.

The Irish school dropout hustlers that were working in his office, however, allegedly stole the idea and ran away with it. They also allegedly made away with US$40 million of his company’s funds which he had committed to the project. It would be the same amount that PI&D are now claiming to have invested in the project.

There is more than meets the eye on this matter. An obscure offshore firm that ostensibly had operated in Nigeria for the past 30 years could not have gone this far without the connivance of some corrupt Nigerians.

It has been alleged that the contract was signed by two-time oil minister Rilwan Lukman, now late. He had first served as petroleum minister under Babangida during 1986-1990. He made a come-back under President Umaru Musa Yar’Adua during 2008-2010. When Vice-President Goodluck Jonathan was acting for the bed-ridden Yar’Adua, Lukman treated him with unbelievable arrogance. Jonathan had to get rid of him when he reshuffled the cabinet in March 2010.

Umaru Yar’Adua returned to his maker on 5 May 2010 and was immediately succeeded by Goodluck Jonathan.

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During his brief tenancy of the high magistracy of our federal republic, Umaru made efforts to resolve the youth unrest in the Niger Delta, but the situation was not one that would miraculously change overnight. The gas project was thus programmed to fail ab initio. Having spent 30 years in the country, the duo of Cahill and Quinn would have understood all the weaknesses and blind spots in our governmental apparatus and decided to exploit them to the hilt.

I have never seen a financial statement belonging to that company. They have no active official website and no track record in the oil sector; their claim to fame being executing one or two contracts for refurbishment of dilapidated armoured tanks for the Nigerian military.

And to compound our suspicions, a hedge fund subsidiary of the V. R. Group has reportedly taken a 25% stake in PI&D; the strategy being perhaps to strengthen the legal war chest of this shadowy offshore entity registered in the British Virgin Islands.

The V. R. Group belongs to the species of vulture funds that have reaped iniquitous profits by shorting debt-distressed countries as Russia, Ukraine, Argentina and Greece.

The whole world agrees that awarding a staggering US$9.8 billion (N3.2 trillion) to a shadowy company in anticipatory income for absolutely no work done is not only unconscionable and extortionate; it is odious in the extreme. This amounts to 20% of our external reserves of US$44 billion. Coughing out such an amount could easily pull down our naira exchange rate while doing untold damage to our revenue-strapped public finances.

Interestingly enough, the court award is for anticipatory loss of income for the twenty-year duration of the project. It makes the implausible assumption that such a project is a risk-free venture; ignoring the volatility of global oil prices and the difficult fraught geopolitical terrain of the Niger Delta. The calculation of interest rates at 7%, when British and European rates have been at historic lows of 0.5% for more than a decade, smacks of Shylockism, if not financial illiteracy.

There is absolutely no evidence that PI&D had ever made any practical move towards building the gas processing plant. Their claim to have sunk US$40 million on the project is patently fraudulent.

Governor Godwin Emefiele of the CBN has testified that there has been no evidence of capital importation whatsoever by the shadowy entity called PI&D. Their claim that they were waiting for the government to lay down the pipelines only ends in a non sequitur: How could government have begun laying pipelines for a facility that did not exist? It would therefore be fair to conclude that both parties were in default.

The claim to have invested US$40 million was also fraudulent. If they had used it to bribe high officials, it would amount to a crime. But the truth is that CBN Governor Godwin Emefiele has declared that they have no records of any capital importation or transactions involving PI&D in Nigeria.

At the same time, former Attorney-General Michael Aaondoaka, who was in a position to know, has said that the standing rule was that any contract worth more than US$20 million would have had to be brought before the National Executive Council for final approval. And in line with federal procurement rules, it would have needed a Certificate of No-Objection on the part of the Director-General of the Bureau of Public Procurement. No such procedures were followed. What we have before us may have been an illegal contract.

The current crisis exposes some of the defects in our national system. Our civil service is characterised by incompetence, corruption and sloth. Government is never run on professional principles. We have nothing comparable to what the renowned Israeli policy scientist Yehezkel Dror terms “the central mind of government”.

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We do not have a central strategic coordinating framework that pools all government policies and strategies together to ensure effective coherence and effective implementation. We also have no central mechanism for documentation and monitoring of all international contracts. It is even unclear who has the ultimate authority for the signing of oil and gas contracts. This is obviously the kind of confusion that PI&D exploited to put us in the mess that we are today.

It is also disappointing that a country like ours, with its galaxy of star-studded luminaries, does not really have strong international lawyers, unlike a small country like Cameroon.

This is why they made us look like sophomores during the Bakassi trial at The Hague. The Yaoundé Institute of International Relations trains the bulk of the country’s international lawyers, diplomats and international civil servants. It is a centre of excellence in Francophone Africa.

In defending our corner in this legal case, we need to prove that the contract itself was fraudulent. And that it was structured to be unenforceable. We also need to show that PI&D is a shadowy offshore entity that had not invested a dime in our country, despite their fraudulent claims. At the same time we should pursue quiet diplomacy with the British and Irish governments, using both carrots and sticks. We should make a comprehensive inventory of British and Irish companies operating in Nigeria. We should work behind the scenes to appeal to their governments for a fair and amicable settlement. Failing which we should up the stakes.

The biggest lesson in this entire fiasco is the need far-reaching reforms in our oil and gas sector. We have it on authority that before his sudden death in April 1998, General Sani Abacha was planning to indigenise the entire sector by calling the bluff of the oil majors.

The Iranians are reviled in the West because they were the first in the emerging world disentangle themselves from the stranglehold of the oil majors. In 1951 Prime Minister Mohammed Mossadegh, a brilliant intellectual and jurist, took bold steps to nationalise the oil industry which since 1913 had been a monopoly of Anglo-Persian Oil (renamed British Petroleum). Britain took the matter to the ICJ in The Hague. The famous judgement by the world court in the Anglo-Iranian Co. Case was a landmark in international law. The ICJ reaffirmed the right of sovereign nations to exercise full control over their own natural resources. The losers orchestrated a military coup that overthrew Mossadegh in August 1953.

From January 1956 when oil was discovered in Oloibiri, the global majors have reaped staggering profits while destroying the ecological patrimony of the Niger Delta peoples through gas-flaring and uncontrolled environmental pollution.

Unlike Saudi Arabia, UAE and Kuwait, we do not operate a metering system. We rely on guesstimates for the quantity of crude lifted daily from our shores.

When inspectors from the Federal Ministry of Petroleum come for audits, they are kept in hotels and lavishly entertained. The grandest larceny of the millennium! Add to that the massive theft carried out by Lebanese, Indian and Ukrainian reptiles, in full connivance with our navy and other military and security apparatchiks.

There is a rainbow of hope even in this dark, ominous Tsunami. It offers us an opportunity to rethink our oil sector while reviewing all subsisting contracts with foreign firms.

We should explore alternative partnerships from the emerging economic powers and forget old decadent west that continues to treat us like mere tenants in our ancestral homeland, with all our untold natural resources.

The honour of our country and the welfare and destiny of our people depend on it.

The $9bn judicial scam against Nigeria (II)
Tribune Online