From Oil To Bank... Corruption and Politics

The brouhaha about the bribery scandal quickly eclipsed discussion of the report and its findings. Indeed, the report seemed to have become tainted in the eyes of the public. It became clear that the report's important findings and recommendations might be abandoned, which would suit many of the protagonists. A great deal of pressure was being exerted on the Finance Ministry and on me personally to approve subsidy payments to the dozens of marketers making claims.

The dilemma I faced was on what basis would the Ministry make those payments, knowing that many of the transactions were possibly fraudulent? The Finance Ministry risked public scorn and legislative censure if it paid without having sound verification. My immediate staff and I determined that one possibility could be to conduct our own verification of the subsidy claims, but we worried that the issue had become so politicized that we would not be able to do so without interference.

In the end, I decided that we should take the risk and use the cover of the noise still ongoing at the National Assembly to set up a verification committee and find a very brave person to lead it In late May 2012, I asked one of the most respected private-sector members of our Economic Management Team, Mr. Aig Imoukhuede, Managing Director and CEO of Access Bank, if he could lead this project. Despite the risk, he saw it as a service to the country and agreed to do so. We formed a Technical Committee made up of various actors with a stake in finding the truth-Dr. Bright Okogu, Director General of the Budget Office in the Finance Ministry; Dr. Abraham Nwankwo, the Director General of the Debt Management Office; Mr. Jonah Otunla, the Accountant General of the Federation; and representatives from banks, oil marketing companies, the Central Bank, and the Ministry of Petroleum Resources.

The Technical Committee needed experts to perform field visits to petroleum tank farms and depots, ports, and other places where the subsidy-claim paper trail might lead, so it hired about fifteen forensic auditors, accountants, and bank examiners from Price water house Coopers and other accounting companies, the Central Bank, and elsewhere to assist with the work. We agreed that the Committee's goal would be to verify and reconcile the first N1.3 trillion (58.4 billion) in subsidy claims by the private oil marketers for 2011, identify all cases of over-payment or irregular payment, identify all likely fraudulent cases for criminal investigations, review any other pertinent issues that might arise from its work, and make appropriate recommendations. We estimated the work might take about five weeks, but it ended up taking almost double that amount of time. After I briefed the President about the Technical Committee and received his permission to proceed, many fraudulent transactions and other infractions were uncovered, so I briefed him on the interim findings. He decided to transform the Technical Committee into a Presidential Committee and move its activities to the Villa-the President's Office.

This would protect the Committee and give it more clout for the next stage of its work, which involved more detailed investigative and forensic work. The Committee was beefed up with State House lawyers and representatives from the Attorney General's office, the police, and the State Security Services. The Presidential Committee had its inaugural meeting on July 6, 2012, and building on the work already completed by the Technical Committee, it submitted a report of its findings in late July
Many of these findings mirrored the findings of the House of Representatives Ad-Hoc Committee to Verify and Determine the Actual Subsidy Requirements, but this time the findings were meticulously researched and well documented. The Presidential Committee found subsidy claims for shipments by "ghost vessels" that never supplied any products and for shipments by vessels that were in China and the South Pacific at the times it was claimed they were transshipping off the coast of Cotonou, Benin. These were verified by Lloyd's Register which tracks the movements of ships all over the world.