After over eight years of legal histrionics and technical subterfuges, Justice Angela Otaluka of the Federal High Court, Apo District, Abuja, on Tuesday sentenced former House Rep, Farouk Lawan, to seven years imprisonment for demanding a $3 million bribe from oil magnate, Chief Femi Otedola so as to exonerate his firm, Zenon Petroleum and Gas Ltd, from alleged complicity in the fuel subsidy scam under President Goodluck Jonathan’s administration. Lawan was also accused of receiving $620,000 hard cash from Otedola being part of the bribe. Lawan, former chairman of the House ad-hoc committee on petroleum subsidy, was found guilty on all three charges brought against him by the government. Sadly enough, fuel fraud has continued right under the nose of President Muhammadu Buhari who as substantive petroleum resources Minister; in addition to his presidential duties, has not made any concerted effort to stop it. Besides Lawan, none of the real actors have been indicted, punished or made to pay for this rip-off and blatant short-changing of Nigerians. The Buhari administration has an onerous task to confront this hydra-headed monster crippling the nation’s economy.
Delivering judgment, Justice Otaluka sentenced Lawan to seven years imprisonment on counts one and two and five years on count three. The sentences however, will run concurrently. The Judge also ordered Lawan to refund the $500,000 hard cash he collected from Otedola to the coffers of the federal government. Officials of the anti-graft agency (EFCC) and a special police unit who mounted the sting operation reportedly recovered only $120,000 from Lawan barely hours after he was caught on tape receiving $620,000 from Otedola, ostensibly to remove his company from the list of those indicted by the committee’s report as corruptly receiving subsidy payments. It is indeed ironic that, had it not been for the unprecedented six-day strike and national mass protests against the removal of fuel subsidy by the Jonathan administration, the revelations of spurious financial dealings and sharp practices over the fuel subsidy regime would have remained guarded secrets; and Lawan would still be in office, possibly as House speaker! It is equally curious that Lawan, who initially denied the allegation, admitted later that he collected the bribe, but only to expose Otedola. Either way, it reinforced public cynicism that in Nigeria, everything or everybody has a price or an exchange value.
Although the House suspended Lawan as the committee’s chairman pending investigations, the sordid affair was not only shocking and disappointing; it confirmed the worst fears of Nigerians that the huge amount the federal government claims it expended on fuel subsidy, was bogus and actually not paid for fuel consumed by Nigerians. A large chunk of the money was simply stolen by unscrupulous individuals through dubious deals. Those involved in the fraud deliberately exploited loopholes in the corrupt system to rip off the nation through over-invoicing, smuggling, excess importation, round tripping, payment for fuel not supplied, among other shenanigans. In effect, the federal government was subsidizing corruption, and not Nigerians.
Very few people disputed the fact that Nigerian public officials routinely engage in corruption. But they probably never contended with the scale of the fraud in which payments of petroleum subsidy by the Nigerian National Petroleum Corporation (NNPC) was shrouded, as revealed in the KPMG audit report and the House ad-hoc committee on the subsidy regime investigation. About $7 billion was estimated to have been lost to assorted fuel subsidy scams, most of it in the run-up to the 2011 elections. 24 million liters of subsidized fuel was said to be smuggled daily to other countries. At the time, this amounted to 8.8 billion liters of fuel annually; far in excess of the country’s then annual consumption projection of about 12.7 billion liters. When multiplied by the official 2011 subsidy figure of N76.38 per liter, it amounted to a whopping N672.14 billion lost by government to corruption yearly.
Nigeria was said to consume about 35 million liters of fuel daily. But marketers receive subsidy based on 58.9 million liters, giving an excess of about 24 million liters daily. In a year, that amounted to 8.7 billion liters of excess fuel imported with subsidy paid but not consumed by Nigerians. More questions arose as to where the fuel was stored considering that Nigeria had a total storage capacity of 1.4 billion liters. As if that was not shocking enough, the NNPC paid itself at source in contravention of existing financial regulations. According to the audit report by KPMG, SS Afemikhe and Co, the NNPC ripped off the nation to the tune of N11.8 billion as subsidy on lost petroleum products not consumed by anybody. The report further revealed that the NNPC collected subsidy on locally produced petrol against the regulations.
The intensive media coverage of the House probe enabled Nigerians to fully understand the assorted strategies that have been employed to fleece them by an ungodly alliance of oil importers, bureaucrats and politicians. It was clear that millions of dollars had been illegally paid out as oil subsidy, including to people who had not imported any oil. The exposure of these scams on the House floor in the course of the inquiry by the Lawan committee gave Nigerians hope that the national assembly and some elected officials could work in the public interest. Nigerians assumed that the privileged citizens who so brazenly steal from and impoverish them had, this time, grossly overreached themselves, and would be brought to justice. However, then President Jonathan opted instead to preserve and even deepen the nation’s unfortunate history of enormous promise, voracious rule and abysmal failure to tackle corruption.
The implication of Lawan in the bribery scandal and his subsequent imprisonment does not alter the fact that fraudulent practices in the murky oil sector have skyrocketed under President Buhari who has refused to punish the culprits. Rather, it appears Buhari is bent on protecting corruption, an impression that has seriously dented the credibility of his change agenda. It has also aggravated the sense of drift and helplessness that have been fostered by mass poverty and insecurity that has taken the country hostage. The enormity of the fraud in the oil sector is at best, evidence of gross negligence and incompetence on the part of the political and administrative leadership of the country’s oil sector under Buhari. The implications are even worse. Buhari needs to relieve himself of these symbols of corruption.
The longer term interests of government and the good of the nation should come above personal loyalties. Corruption and nepotism among other ills can only be significantly reduced when political appointees and top bureaucrats take ultimate responsibility for what happens under their watch. The buck must stop at someone’s desk! Ministers will bear ultimate responsibility for lapses in their departments only if the President demonstrates leadership and acknowledges responsibility for the quality and performance of national institutions. This is about setting powerful precedence by personal example. The President should ask questions and demand resignations at the very top in addition to making the police or anti-graft agencies perform their investigation and prosecution duties.
Ministers and heads of MDAs should be asked to resign when major cases of corruption need to be investigated. This change must start by altering the culture of doling out oil contracts to politicians who are expected to recover campaign expenditure in these positions. The President should set an example by promptly relieving himself from the micro-management of the Petroleum ministry and build a criminal justice system that assures speedy prosecution. Rhetoric on taking change to the next level is meaningless when the country preserves a system in which individuals convert public institutions and official responsibilities to personal gain. Time is running out for Buhari to signal to the anti-graft agencies that they should investigate and conclude corruption cases expeditiously no matter whose ox is gored.
Ultimately, a redesign of Nigeria’s political and institutional architecture is required if the country is to abandon the sporadic and selective approach to fighting corruption and seriously tackle this cancer. Sadly, the APC-led Buhari administration did not come to power with a plan for one. Corruption is a threat to the integrity of Nigeria’s democracy; it should be a motivation for sincere institutional reform.
The civil society, including the media and opposition parties, has a moral duty to expose and criticize corruption in government. There should be a rethink of policies that place excessive powers on politicians and bureaucrats over vast economic resources. But the ultimate responsibility rests on President Buhari. He can arrest the drift if he reaches out beyond narrow, self-interested circles, for ideas that will promote autonomous and effective functioning of national institutions.
