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FRONTPAGE VIEWPOINT MAGAZINE BY SECTION Special Report Business Nigeria COVER POLITICS BUSINESS & ECONOMICS BACK OF THE BOOK REGULARS NEIL FORD LETTERS PUBLISHERS NOTE AROUND AFRICA POLITALK WILMOT ADVERTISING Email us for advertising information COMPANY PROFILE MISSION TEAM EDITORIAL BOARD DIRECTORS |
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Click here for the NewsAfrica Special Focus Article When it takes two to tango ON SEPTEMBER 25 British bridge-building company Mabey and Johnson became the first major company to be convicted of foreign bribery at Southwark Crown Court, London. John Hardy QC for the Serious Fraud Office (SFO), revealed the names of 12 individuals in six countries alleged to have received bribes from the Reading-based company. The corruption offences, which primarily occurred in the 1990s, saw the firm try to influence officials when bidding for public contracts. Ministers and officials in Angola, Madagascar, Mozambique, Bangladesh, and Jamaica were also bribed, Hardy told the court. Over a period of eight years, the firm gave £100,000 ‘to buy the favours’ of Joseph Hibbert, a key Jamaican official in awarding contracts, one of them worth £14m. He stated the company paid ‘a wide-ranging series of bribes’ totalling £470,000 to politicians and officials in Ghana. He identified five who travelled to Britain to collect sums of money – ranging from £10,000 to £55,000 – from bank accounts in London and Watford. The court was told how the firm, owned by one of Britain’s richest families, paid bribes totalling £1m to foreign politicians and officials to get export orders valued at £60m to £70m through covert middlemen. The company also broke UN sanctions by illegally paying £363,000 to Saddam Hussein’s government between 2001 and 2002. Peter Lloyd, Mabey and Johnson’s new managing director, said after the case, ‘What our company did in the past is a matter of deep regret. We have now made a fresh start, having wiped the slate clean of these offences.’ Sentencing, Judge Geoffrey Rivlin QC said the ‘unusual case’ came to light after five of the company’s directors stepped down and the new board decided to ‘dramatically’ turn itself into the SFO. The SFO investigation of Mabey and Johnson began in early 2008 after the firm voluntarily disclosed evidence that it may have engaged in corrupt purposes. By pleading guilty, there could be no trial and no witnesses called. In effect, Mabey and Johnson did a damage-limitation exercise in turning themselves in and secured a US-style plea bargain, which also guaranteed their officials anonymity. All the Ghanaian officials alleged to have been involved were named. This has resulted in a political storm in Ghanaian political circles, with some arguing that asking these officials to resign is acceptance of a master-slave relationship with the former colonisers. This leaves many African officials open to charges of corruption from any corner of the globe, with no right of redress, whilst those complicit in the crimes in developed nations continue business without tarnished reputations. So what is Ghana to do now? Will those named be prosecuted in Ghana? And what if one of those named had been the head of state? Commenting on the conclusion of this prosecution, SFO chief Richard Alderman said, ‘This is a landmark outcome. The first conviction in this country of a company for overseas corruption and for breaking the UN Iraq sanctions and, satisfyingly, achieved quickly. ‘The offences are serious ones but the company has played its part positively by recognising the unacceptability of those past business practices and by coming forward to report them and engage constructively with the SFO. I urge other companies who might see some parallels for them, to come and talk to us and have the matter dealt with quickly and fairly.’ To many, the statement sounds like an invitation to more potential plea-bargains and the opportunity for other companies complicit in corruption scenarios to jump before they are pushed just like Mabey and Johnson did. Corruption has become a fact of life in many African communities, threatening development processes and severely restricting growth. While the levels of corruption vary from country to country, the political and social conditions in the continent as a whole provide an ideal environment for its spread. It is easy to point the finger at former colonial powers, but many believe Africans have to take responsibility for cultivating an attitude of “if you can’t beat ‘em, join them”. Nigeria is often cited as the worst example, and most articles you read about corruption in Africa point straight to Abuja. According to a report in Nigeria’s Guardian newspaper in 2002: ‘Corruption has taught the Nigerian a dangerous and wrong lesson that it does not pay to be honest, hardworking and law-abiding. << Through corrupt means many political office holders acquire wealth and properties in and outside Nigeria; and many display their wealth (which is beyond the means), but the society does not blink. This has made politics a big business in Nigeria, because anything spent to secure a political office is regarded as an investment, which matures immediately one gets into office.’ A case in point is the saga of German company Siemens, which entered Nigeria in the mid-seventies and immediately became a key player in the telecommunications sector, then dominated by International Telephone and Telecommunications (ITT). It did not take Siemens long to master the Nigerian way of doing business and it eventually displaced ITT by acquiring massive government contracts in the telecoms and power sectors. During the Obasanjo administration, the company secured the Geregu Gas Power Plant in Geregu, Kogi State, part of an initiative to boost the national power supply. But the bubble burst in October 2007, when a Munich court convicted Siemens of paying bribes to Nigerian ministers and fined it $248m. The Nigerian government cancelled a $1.1m contract with Siemens for the supply of circuit breakers and other power generation accessories. Both the chair and chief executive officer of Siemens then quit their positions over the scandal and at least two employees were given suspended sentences for bribery and breach of trust. The Munich court named Siemens’ Nigerian collaborators as Cornelius Adebayo, the late Haruna Elewi, Tajudeen Olanrewaju and Bello Muhammad, all former ministers of communications, and Jubril Aminu, chair of the Senate Committee on Foreign Affairs. They were alleged to have received bribes of about $4.5m from Siemens. Aminu and Olanrewaju have denied involvement. Although the Nigerian government launched an investigation into the scandal, no Nigerian has been charged over it. A few months later, the Nigerian government signed a memorandum of understanding with Siemens in which it would be leading four other German companies to undertake 10 major power projects in Nigeria. The agreement angered many Nigerians who queried the rationale for re-engaging a company that had been expelled from the country in 2007. Another major scandal involves the US’ biggest and most profitable gas and oil services company Halliburton. On February 11, the US Securities and Exchange Commission (SEC) indicted Halliburton, its former subsidiary Kellogg, Brown and Root (KBR) and the latter’s former managing director, Albert Jack Stanley, for his activities in connection with bribery racket in Nigeria worth $180m. The illegal payments were to facilitate contracts in respect of the Nigerian Liquefied Natural Gas (NLNG) terminal expansion project worth more than $6bn. Nigerian government officials were reportedly paid about $150m of the $180m agreed on by KBR. The money was allegedly paid to the presidency and the Nigerian National Petroleum Corporation (NNPC) officials between 1995 and 2004 for four trains for Bonny NLNG project in Rivers State, south east Nigeria. The SEC also charged that KBR and Halliburton engaged in accountancy and internal control violations related to the bribery. Under the deal reached with the US Justice Department, KBR and Halliburton agreed to pay a $402m fine of which Halliburton has agreed to pay $382m. In a separate settlement with the US SEC, Halliburton agreed to forfeit $177m in profits to settle parallel criminal charges that its former subsidiary violated the Foreign Corrupt Practices Act. According to the SEC, the $579m in sanctions is the highest combined settlement ever paid by US companies under the act. Stanley had pleaded guilty in September 2008, to charges in connection with the bribery scandal and agreed to cooperate with investigators. Among those questioned about the scandal, which first surfaced in 2003, were Jackson Gaius-Obaseki and Funso Kupolokun, both former group managing directors of NNPC, Dan Etete, former minister of petroleum, Umaru Shikafi, former intelligence chief, Ibrahim Aliyu, former permanent secretary, Abdul Dominic Bello, former airforce chief, MD Yusuf, former police chief, and Edmund Daukoru, former petroleum minister. They all deny wrongdoing. Gaius-Obeseki and Dan Etete were arrested On June 3, as suspects in the Halliburton scandal but later released. Nigerian investigators later discovered $150m of the $180m bribe deal in a Swiss bank account. The remaining $30m has not been found or accounted for. The government’s anti-corruption watchdog, the Economic and Financial Crimes Commission also probed a number of public officials linked to the Halliburton bribe scandal but did not name any of them, unlike those at the US end of the case. Abdulwaheed Omar, president of the Nigeria Labour Congress, commented, ‘We believe that given the international dimensions the case has assumed including the involvement of the American, Swiss and French authorities, any attempt to clothe the culprits in the borrowed robes of decency will backfire.’ In a twist to the whole saga, former US vice-president Dick Cheney was chief-executive and chair of Halliburton from 1995-2000, immediately prior to his election to the post under George W Bush. When asked about the emerging scandal in the 2004 election campaign, Cheney dismissed the allegations as ‘a smokescreen’, adding, ‘the charges are false.’ It was Cheney who appointed Stanley as president of Halliburton’s wholly-owned Kellogg Brown & Root (KBR) subsidiary in 1998. ‘We took Jack Stanley to head up the organisation and that has helped tremendously,’ Cheney said at the time. Dick Cheney was Secretary of Defence in 1991 when he created a contract vehicle for Halliburton that resulted in millions of dollars of revenue. After leaving the administration, Cheney served as CEO of Halliburton from 1995 to 2000. Then he became vice-president and Halliburton was awarded hundreds of millions of dollars of non-competitive contracts as part of the Gulf War in 2003. Britain’s Serious Fraud Office is considering civil claims or criminal prosecution in its probe into the Nigerian bribe scandal. The SFO has been investigating a UK-based KBR joint venture that held a stake in KBR’s multinational consortium which was involved in the bribery scheme. Five years have past since the scandal broke, and in the meantime many Nigerians are clamouring for some accountability. The case which had been relatively dormant in Nigeria, was revived again after the BBC interviewed former President Olusegun Obasanjo in March. Obasanjo denied everything, but the BBC interviewer insisted, ‘If one cross-checks with the testimony before French prosecutor, Jeffrey Tesler, another Halliburton agent involved named you as one of the three Nigerian successive heads of state [who had been involved in negotiations with the Halliburton subsidiaries which were later, in a US court, found guilty of bribery and corruption on massive scale.’ The other heads of state referred to were General Sani Abacha and General Abdusalami Abubakar. There are some key social factors that make smoother sailing for those inclined to abuse power – great inequality in distribution of wealth; political office as the primary means of gaining access to wealth; conflict between changing moral codes; the weakness of social and governmental enforcement mechanisms; and the absence of a strong sense of national community. Of course, the fact that Nigerians have been under the thumb of military rule since independence in 1960 is also a key factor in fracturing existing civil infrastructure leaving the country much more vulnerable to corruption. Nigeria’s EFCC is leading the push against corruption in Nigeria. But just how serious are these investigative bodies and commissions on corruption? The former head of the EFCC Nuhu Ribadu, was lauded internationally as a beacon of hope in Africa’s fight against corruption when he recovered billions of dollars in stolen public funds and successfully prosecuted scores of international fraudsters and top government officials. When his investigations seemed to get too close for comfort, he was ordered in November last year to take a one-year course at the National Institute of Policy and Strategic Studies to ‘increase his proficiency’. He was later demoted from the rank of Assistant Inspector-General of Police to Deputy Commissioner of Police, and then sacked for ‘indiscipline, insubordination and absence from duty’. The ex-EFCC chair then went exile in the UK, prompting Nigerian security agencies to place him under watch. In an interview with the BBC’s Hausa Service Ribadu stated, ‘The way we worked in the past, this government doesn't want it. They said I should go to school. I was in school, they followed me, and they had me sacked. I was forced out with my children and family. The President knows and he has sent me out of the country on exile.’ |
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