Sources in Washington DC have told Huhuonline that the United States government is mounting pressure on President Muhammadu Buhari to reopen the bribery case relating to the $6 billion liquefied natural gas (LNG) project at Bonny Island in the Niger Delta involving several companies that led to one of the highest ever bribery settlements in corporate history. Halliburton and its former subsidiary Kellogg Brown & Root (KBR) paid a record $579 million in fines after the TSKJ consortium -comprising Japan’s JGC Corp (1963.T) Italy’s Snamprogetti, KBR Inc. (formerly part of Halliburton) and France’s Technip admitted to offering bribes to secure the Nigerian LNG contract.
According to the US Justice Department, the bribes- some delivered in briefcases stuffed with $100 bills – were paid to Nigerian government officials as well as officials in the Nigerian National Petroleum Corp, (NNPC). France’s Technip, the US group KBR, Japan’s JGC and the Italian group Snamprogetti all paid bribes amounting to $180 million to Nigerian officials to win the contract to build the facility. The bribes were shelled out during the administration of late Gen. Sani Abacha, Gen. Abdulsalami Abubakar and President Olusegun Obasanjo. The scheme involved money wired through banks in Amsterdam and New York to accounts in Switzerland and Monaco and KBR used shell companies in Portugal to hide the operations. The scheme was masterminded by UK-based consultant Jeffery Tesler, who was hired to administer a slush-fund created “to maintain favorable relationships” between the TSKJ and government officials. Tesler was paid an outrageous $32.5 million for his services in administering the consortium slush-fund via two personal bank accounts in Switzerland and Monaco.
The US Federal Bureau of Intelligence (FBI) which investigated the scandal noted that it reached the highest levels of the administration of former President Olusegun Obasanjo. According to the FBI, Tesler’s Gibraltar-based firm, Tri Star, paid TSKJ bribes to Nigerian government officials in several installments: $40 million in 1994, $60 million in 1995, $37.5 million in 1999, $21 million in 2001 and $23 million in 2002. From these amounts, there have also been revelations about the recipients of some of the payments: $40 million to Gen. Sani Abacha in November 1994; $2.5 million into Swiss bank accounts held by Petroleum Minister Dan Etete; under a false name between 1996 and 1998; $75,000 (in two installments) to a former Inspector General of Police; $2.4 million to officials of Nigeria’s Federal Inland Revenue Service (FIRS) in 2001 and 2002 to obtain favorable tax treatment; $1million to NNPC officials in August 2002; $500,000 worth of Nigerian Naira to an NNPC official; and in excess of $1.8 million for visas between 1997 and 2004.
To avoid trial in the US, Technip and ENI, parent company of Snamprogetti, chose to pay a fine of nearly €500 million. KBR and Halliburton agreed with the Justice Department to pay $402 million fine, with Halliburton paying $382 million. Halliburton agreed with the US Securities and Exchange Commission (SEC) to disgorge $177 million in profits to settle parallel criminal charges that KBR violated the Foreign Corrupt Practices Act. But although the companies admitted to bribing Nigerian officials and paid the hefty fines, not a single Nigerian official has been prosecuted, even after the Nigerian Senate passed a motion on March 24, 2009, urging the Federal Government to take all necessary steps to expose and prosecute citizens involved in the Halliburton bribery scandal.
According to sources in Washington, the American government is bringing what one Justice Department official qualified as “amicable pressure” to bear on President Buhari, to reopen the case. The American authorities hope that in taking office Buhari, who was elected largely on his promise to eradicate corruption, will re-open the case. Officials in the Justice department under the new no-nonsense Attorney General, Loretta Lynch, confided to Huhuonline that the US will pursue a more aggressive policy in combating trans-national corruption. Asked why the US was targeting Nigeria, a source pointed to the election of Buhari and his reputation for zero-tolerance on corruption.
The source noted that the Obama administration was miffed that while US corporate executives who bribe foreign officials for lucrative contracts face prosecution and conviction in America, their partners in crime in Nigeria freely enjoy the proceeds of corruption and graft with impunity. As if that was not provocation enough, Nigerian officials have continued to grant more contracts to these foreign companies even after they faced conviction and fines in their home countries. Not even the sentencing of Nigeria’s former petroleum minister, Dan Etete, for laundering Halliburton bribes in France was sufficient to attract the attention of Nigeria’s government. “We have made it clear to the new administration that this kind of impunity is unacceptable,” the source said.
Asked what specifically, the US wanted Buhari to do, the source said the US Justice Department wants Buhari to implement the findings of the House Committee on Public Petition that investigated the Halliburton scandal in August 2004, and unanimously recommended that “all companies forming part of the TSKJ consortium and all Halliburton companies in Nigeria should be excluded from any contracts and businesses. That Committee, which was headed by Chudi Ofodille, lambasted Halliburton for its refusal to cooperate, describing its attitude as a contemptuous “hide-and-seek game” to avoid revealing the names of Nigerian officials who received the bribes.
The possible implication of President Obasanjo, under whose government a huge chunk of the slush-fund was paid, raises fundamental questions about corruption during his tenure as President from 1999-2007. US officials took umbrage at OBJ’s self-righteous indignation after Halliburton and its corporate partners pled guilty and agreed to the staggering $579 million settlement, the then Attorney-General and Minister of Justice, Michael Aondoakaa, instead chose to sued Halliburton and its partners seeking $10 billion in damages as remedy to the harm done to Nigeria’s reputation. US Justice Department officials are at a loss to understand why instead of prosecuting the Nigerian government officials who received the bribes –and by implication, violated Nigerian anti-graft laws, “no mutual legal assistant requests were filed from the Attorney General’s office” to obtain the names of the officials. Aondoakaa’s strategy was to” play to the gallery” noted the source.
American officials want Buhari to probe the Nigerian side of the scandal in view of the assertion of Chudi Ofodille, Chairman of the House of Representatives Committee on Pubic Petitions, which investigated the matter in 2004, that “the forces of reaction in Government and NNPC were bent on shielding Halliburton and by extension, themselves. Every attempt to seek collaboration with the Executive branch failed.” At the height of such frustration was the June 8, 2005 proposed meeting with President Obasanjo, during which Hon. Ofodille was barred from participating in a meeting with the Halliburton team (led by Andy Lane) and the NNPC team (led by then-Group Managing Director, Funsho Kupolokun).
The Obama Justice Department has expressed bitter disappointment that while appropriate legal measures were taken by the US, the issue was never on the agenda of neither President Yar’Adua nor Jonathan’s administration. In their view, the Halliburton-KBR scandal begs the question of how aggressively the new administration will tackle the Nigerian corruption industry; and is a litmus test to the credibility and anti-corruption credentials of the new President. If Buhari does not reopen the bribery investigation, it will illustrate the extent to which Nigeria has lost its capacity for self-regulation and exposed the country as a place with highly dysfunctional institutions where “anything goes” in terms of business practices.
In addition, the US government wants the Buhari administration to undertake a review of the contracts awarded to Halliburton and its consortium partners, including the building of the Topsides of the FPSO for Agbami Deep offshore field, owned by NNPC, ChevronTexaco, Petrobras and Statoil, which was awarded to KBR, as well as the contract for the construction of the Escravos Gas to Liquid Project owned by NNPC and ChevronTexaco, which was awarded to Halliburton’s KBR and other partners in the scandal: Snamprogetti SpA and Japanese Gasoline Corporation (JGC). Revisiting the Halliburton scandal will identify and bring to justice culpable Nigerian officials. Such actions would be consistent with the ICPC and EFCC Acts, as well as the UN Convention against Corruption, which requires countries to take proactive steps to investigate allegations of corruption, prosecute suspected perpetrators and fully recover the money involved. Such efforts will not only demonstrate the extent of President Buhari’s commitment as truly harboring “zero-tolerance for corruption,” but will also prove that it takes more than being the good man Buhari is often touted, to be an effective president.
Nigeria’s liquefied natural gas project was conceived to build the world’s largest gas export plant, in Bonny Island in the eastern part of the Niger Delta. Its purpose was to mitigate the waste and pollution created by gas flaring during oil production and to increase the country’s export earnings and revenue base. The initiative, known as the Nigeria Liquefied Natural Gas (NLNG) project, was incorporated in 1989 as the Nigeria Liquefied Natural Gas Limited. It has four main shareholders: Nigerian National Petroleum Corporation (NNPC) with 49%, Shell Production Development Company (SDPC) with 25.6%, TotalFinaElf with 15%, and Agip International-ENI with 10.4%. The contract for the construction of the gas export project was awarded in 1995, while the work was undertaken between 1996 and 2004.
