Feeling The Heat

This was succinctly captured by THISDAY columnist, Kayode Komolafe, in an article on the back page of the newspaper last Wednesday. “The pertinent question now is that, what exactly is the moral architecture of the Yar’Adua administration? The question is urgent for an administration that is perceived to be punishing and persecuting Ribadu for giving verve to the anti-corruption campaign of his predecessor. The question is imperative because those who have questions to answer in court for how they managed the people’s resources are the people gloating about Ribadu’s persecution and peddling influence. They boast that they are the ones now in charge.” Those ‘now in charge’ include James Ibori, the former governor of Delta State currently being tried for embezzling billions of naira belonging to his state when he was the chief executive.

He was also one of the chief financiers of Yar’Adua’s campaign for presidency. He consequently became one of the new power brokers in the Presidency with the assumption of office of President Yar’Adua on 29 May 2007. Ibori is considered untouchable, in spite of the fact that he has various allegations of corruption hanging on his neck both in Nigeria and abroad. Nevertheless, Ribadu, who as boss of EFCC had listed Ibori among former state chief executives the agency was investigating for corruption, was determined to bring him to justice.

Early indications that Ibori might turn out to be a bone of fish in the throat of the former anti-graft agency were attempts by the then new Attorney-General of the Federation and Minister of Justice, Mike Aondoakaa to frustrate the trial of Ibori and some companies linked to him by the London Metropolitan Police. Andoakaa was allegedly nominated for his position in the Yar’Adua cabinet by some former governors being investigated by the Ribadu-led EFCC led by Ibori. Apart from Ibori, another notable member of the club of ex- governors is George Akume of Benue State, now a Senator. Ribadu eventually moved against the former Delta State governor last year when he was arrested and arraigned on corruption charges in a Federal High Court sitting in Kaduna .

The arrest and arraignment was the beginning of Ribadu’s troubles. With the connivance of Mike Okiro, the Inspector-General of Police, another candidate of Ibori in the Yar’Adua cabinet, Ribadu was tacitly removed as EFCC boss last December when he was nominated for a controversial management course in Kuru. The initial understanding was that he would return to his job at EFCC after the course, but few months after, a new substantive head, Farida Waziri, a retired Assistant Inspector-General of Police was appointed to head the anti-corruption agency. Already, there are indications that Waziri, who is also said to have secured the job with the backing of ex-governors, is under pressure to probe Ribadu for corruption as final humiliation. Nigerians wait to see how this will turn out in the next few weeks. Sarki Mukhtar, National Security Adviser, NSA, to Obasanjo who was retained by Yar’Adua, according to sources, is another aide that served the ex-president whose position is now under serious threat. According to sources close to the Presidency, the pressure on Yar’Adua to remove Mukhtar is being championed by the former governors and aides of the President anxious to hijack the machinery of government and remove every vestige of the former administration from the Presidential Villa.

The ultimate aim is to distance President Yar’Adua from his predecessor in office as much as possible. Just recently, David Edvibie, a former aide of Ibori who is still answering charges of corruption in London, was appointed private secretary to President Yar’Adua. The emerging scenario is that elements interested in hijacking the presidency may have perfected a method of hanging corruption cases on the necks of aides close to Chief Obasanjo being considered for appointments by President Yar’Adua, as in the case of former Aviation minister, Babalola Borisade, who was reportedly being considered for the position of Chief of Staff in the presidency before he was picked up by the EFCC after his appearance before the Senate Committee on Aviation. This is to dim their chances of being appointed and keep so-called ‘OBJ Boys’ as far away from Yar’Adua as possible. The plot notwithstanding, the cases against associates of the ex-president are in no way diminished.

After a series of accusations and counter accusations, between Malam Nasir el-Rufai, former Federal Capital Territory minister and his successor in office, Usman Moddibo, the Senate’s FCT Committee, in a motion moved by its chairman, Senator Abubakar Sodangi, last March embarked on the probe of former ministers of the Territory. But el-Rufai immediately sensed that the motion was targeted at him, with a predetermined conclusion even before the sittings of the probe panel commenced. His fears were confirmed when the panel, in its report recommended that he should be banned from holding public office. In its interim report, laid on the table of the Senate President last July, the panel noted that “Malam Nasir el-Rufai is not a fit and proper person to hold public office in a democratic set up.”

The report, entitled: Senate Joint Committee on FCT and Housing Interim Report on the Investigative Public Hearing on the Activities of the Past Administrations of FCT from 1999 to 2007; Findings and Recommendations, noted that el-Rufai continued to act as FCT minister after the Federal Executive Council was dissolved on 15 May 2007. The committee had accused el-Rufai of abuse of office in the purchase of the Guest House belonging to former vice-president, Alhaji Atiku Abubakar. The committee also recommended that el-Rufai should account for all funds collected during his tenure through ad hoc bodies he raised, namely, Abuja Geographic Information System, AGIS; Ad Hoc Committee on the Sale of Federal Government Houses, the Satellite Town Development Agency and Abuja Investments and Property Development Company Limited, among others. The committee also said in the report that about N32billion realised from the sale of Federal Government buildings during the ex-minister’s tenure was unaccounted for. It consequently recommended the prosecution of el-Rufai and other officers of FCT for disobedience of court orders in the demolition of buildings carried out in the FCT. The report will be considered by the Senate, which resumed from its two-month recess last Wednesday.

Even the daughter of the ex-president, Senator Iyabo Obasanjo, has been made to taste the bitter side of being out of power. She is currently undergoing trial at an Abuja High Court for allegedly receiving N10million illegal proceeds from the N300million unspent budget of the Federal Ministry of Health. The Senator, however, pleaded ‘not guilty’ to the charge when the case first came up for hearing. Until the coming of the Yar’Adua regime, Prof. Chukwuma Soludo had a reputation as an astute and unblemished financial administrator, Straight from the success of the Bank Consolidation exercise, Soludo was regaled as the arrow head of Obasanjo’s economic and financial reform agenda. But now the integrity and credibility of the once venerated Governor of the Central Bank of Nigeria, CBN, has been called to question.

Last month, the CBN governor watched helplessly as the report of the Presidential Committee set up to investigate the affairs of the controversial Africa Finance Corporation, AFC, passed a guilty verdict on him alongside other officials who participated in the setting up and funding of the corporation. Inaugurated by Aondoakaa, on 14 April, the five-member committee was mandated to ascertain the source of authority for the withdrawal of the sum of $480million in 2007 in respect of the purchase of equity in ACF by the CBN and determine whether there was relevant authorisation by the National Assembly or the President for the investment.

The committee which was headed by Tunde Ogunsakin, a former Director of Operations at the Independent Corrupt Practices Commission, ICPC, now at the EFCC, was also empowered to appraise the laws and procedures relating to the setting up of the AFC, ascertain its ownership structure and carry out other relevant functions that would help in the realisation of the committee’s objectives. In addition, the group was charged to determine the percentage equity holding of each investor and determine the representation of Nigerians on the board of the corporation.

An interim report by the panel, however, noted that CBN invested the sum of $462.923million and not the $480million originally reflected in the committee’s terms of reference. Ogunsakin said the amount invested was recovered and deposited at the JP Morgan Chase Bank in New York in an interest-yielding account pending a final determination by the federal government of whether or not Nigeria will continue to participate in the AFC project. The panel had earlier alleged that Soludo illegally printed N58billion to purchase the $463million equity investment in the AFC. In its conclusion, the panel recommended that six banks be sanctioned by the federal government for their involvement in the AFC affair and that the CBN pay $11m as interest on the money invested in the AFC.

During the probe, Soludo told the panel that N58billion was withdrawn from the Foreign Operations Department Naira Deposit Account to purchase the dollar equivalent. But the panel report stated that in debiting the AFC Equity Investment Account with N58billion, the CBN governor illegally printed the N58billion used.

According to findings in June, the United States of America anti-corruption and money laundering body linked the United Bank for Africa, UBA, to the AFC scandal. It was reported that AFC opened two accounts with the New York branch of UBA, and Soludo soon remitted AFC funds in the accounts in November last year and March this year. In all, Soludo was alleged to have deposited over $300million directly from the CBN into the two AFC accounts - numbers 68959001 and 68959013. The deposits came in two tranches, and the cash came from the more than $500million Soludo had created for investment purposes of the AFC. US regulators had slammed a $15million fine on UBA in April 2008 for the bank’s violations of the Bank Secrecy Act, BSA.

In a 10-page Executive summary report, the committee indicted Soludo, the CBN Board, Austine Ometoruwa, Managing Director of AFC and six banks. The committee’s findings established that the AFC was neither incorporated under the Companies and Allied Matters Act, Laws of the Federation of Nigeria 2004, nor as an international institution. Considering the background of the AFC, the report described it thus: “It is therefore, at best, an entity still in formation and at worst, an illegal entity.” The panel stated that although the CBN claimed that the agreements establishing the AFC were signed by the former Attorney-General of the Federation, Chief Bayo Ojo, on 25 May 2007, its Board approved the investment of $500m in AFC by a resolution dated 2 August 2007.

The report further said it discovered that as at 22 November 2007, when the first transfer of the funds sourced from the CBN’s $462m and other shareholders’ $288m was made to the AFC accounts, Nigeria was the only country that had signed the agreement to establish the corporation. This, the panel observed, “was contrary to Article 19 of the agreement which provided that two countries had to sign to bring the corporation into existence”. Additionally, as at the date of the transfer of funds sourced in November 2007, the presidential approval of the project had not been forwarded to the Federal Executive Council for ratification as required under section 1 (2) and section 3 of the Treaties Making Procedure etc. The report highlighted that as at the date of the purported commencement of operations by AFC, that is 22 November 2007, none of the relevant laws and procedures had been complied with.The committee concluded that it was of the opinion that an investment of such nature, being of an international character, needed approval of the Federal Government of Nigeria as provided for under section 26 of the 1991 CBN Act.

Prof. Babalola Borisade is currently facing trial for his role in the alleged misappropriation of N19.5billion Aviation Intervention Fund while serving as Aviation minister. Borisade alongside Chief Femi Fani-Kayode, his successor in the Aviation Ministry and Mr. Rowland Iyayi, former managing director, National Airspace Management Authority, NAMA, were recently docked by the EFCC for alleged criminal conspiracy, forgery and breach of official trust in the disbursement of the fund meant for the renovation of four international airports in Lagos, Abuja, Port Harcourt and Kano. The N19.5billion Intervention Fund was President Obasanjo’s response to the seemingly endless air disasters that occurred in 2005, prompting an outcry regarding safety in the skies. They included the Bellview Airlines crash on 22 October at Lisa; the Dornier Aviation crash on 28 November in Kaduna, and the Sosoliso Airlines crash on 10 December in Port Harcourt. Details of who did what, how and when still remain a subject of intense buck-passing between the two erstwhile ministers. A key component of the Intervention Fund that drew the wrath of the EFCC was the expenditure on the Safe Tower Project awarded by Borisade. Contract figures for the project were reportedly inflated from an initial N1.5billion in 2006 to N6.5billion, as alleged by Mr. George Eider, representative of Austrian company, Avsatel Ges MB H, Vienna, winner of the contract, during the Senate Hearing on the Aviation Fund. Apart from Avsatel, three other companies bid for the project. The companies and their quotations include: Aerovav Group of Canada (N2.03bn), Nav Control of France (N1.30bn), Viasala and Frequentis (N1.50bn) and NAMA itself (N1.03bn). While none of these quotations sailed through successfully, the contract was eventually awarded to Avsatel without advertisement or competitive tender. Also questionable was the speed with which the contract shot through the Due Process office.

Even more controversial is the manner in which a bank loan was arranged for the project. At the time the project was approved by the Federal Executive Council in 2006, about N47.5billion was supposed to be in the Natural Resources Development Account, NRDA, from which FEC recommended funding of the project. The N6.5billion contract (the hitherto approved figure prior to the present controversy), with a foreign component of 38 million euros and local component of N300million, could, therefore, be conveniently sourced from the NRDA as loan. Instead, the Aviation ministry sidetracked the FEC recommendation and chose to seek a N6.5billion loan from a bank that, curiously, offered a higher interest rate. The Federal Airports Authority of Nigeria, FAAN, was prevailed upon to sign the loan agreement on NAMA’s behalf. The contract received severe knocks from a technical sub-committee, headed by Captain Shehu Iyal, Special Assistant to the President on Aviation. The committee expressed misgivings about the glaring inconsistencies concerning the source of funding for the project, pointing out that the project exhibited the trappings of double funding, and called for a thorough review of the total cost element to ensure that the earmarked cost of 38 million euros had not been grossly padded. It hammered on FAAN’s curious borrowing of funds on NAMA’s behalf to execute the project against a presidential order that recommended sourcing from the NRDA. The committee emphasised that “the accumulated loss to the Federal Government could be in the region of 64.34 per cent of the borrowed amount”.

Shortcomings of the Avsatel Safe Tower model being put on ground in the airports also came to light. Several crucial vital services did not come in tow with the provision. These include area/radar control services, low-level wind shear alerting system (responsible for several accidents), automated aeronautical information services for pilots and long-range VHF communication with en-route flights, among others.

Expectedly at the Public Hearing, Borishade and Fani-Kayode seized the moment to trade accusations. While Borishade insisted that he did not authorise the withdrawal of any amount from the fund before he left office, Fani-Kayode claimed that not all the funds in question was in the Ministry’s coffers when he assumed duty. Borisade’s insisted that the Safe Tower received due process certificate and was fast tracked to avert ignominious delisting of Nigeria’s four major airports for major safety lapses. The former minister himself said his regime spent only N2billion of the Intervention Fund and it was for payment to FAAN retirees. Three of the four towers, he said, have been completed already while equipment for the fourth is on ground but cannot be installed yet due to defects in the tower.

Fani-Kayode strove to put a lie to Borisade’s assertion when he declared that bank statements can be produced which confirmed that the sum of N6.5billion was withdrawn on 1 and 4 September 2006 during the tenure of his predecessor, Prof. Borishade. “All what I met when I assumed office was N11billion and not N19.5billion as my predecessor wants to make this committee believe. My predecessor had disbursed N8.5billion before I assumed office,” Fani-Kayode said. He also argued that of the N2billion from Rivers State granted the Ministry and FAAN towards rehabilitation of the Port Harcourt Airport runway, he met only N1.5billion. He expressed shock that N6.5billion was sourced from the bank, which had already led to the loss of N1.3billion, as NAMA pays N222million monthly servicing the loan.

Indeed, when Chief Femi Fani-Kayode was redeployed from the sedate Culture and Tourism Ministry to the Aviation Ministry as the minister of State, Air Transportation in November 2006, he insisted on the implementation of the Paul Dike Presidential Committee on Aviation and the technical sub-committee report on the Safe Tower project. The two reports detail anomalous conduct by both middle and top-level aviation staff in past administrations, some indicted outright. Fani-Kayode consequently launched a probe into the utilisation of the N6.5billion released from the Federal Government Intervention Fund. This led to the sack of Roland Iyayi, former helmsman of the Nigerian Airspace Management Authority, a move that sparked controversy as Iyayi was said to be Borishade’s confidant.Meanwhile, the release of the remaining N11billion of the N19.5billion intervention fund granted the ailing industry by the federal government in 2006 generated widespread reports that the money had been tampered with by the minister. Fani-Kayode denied this, insisting that no amount from the Intervention Fund would be spent on any project in the industry without the knowledge of the Presidential Implementation Committee and in strict observance of due process.However, the Intervention Fund palaver simply refused to be swept under the carpet. On his part, Fani-Kayode, who regarded himself as being on a cleansing mission, exhumed some irregularities he observed regarding the execution of the Safe Tower project initiated during Borishade’s administration. He notified former President Olusegun Obasanjo of these and sent the report to the National Security Adviser, NSA, General Sarki Mouktar (retd) for further action. According to the NSA’s report, the contract agreement was signed on 13 June 2006, during Borishade’s tenure. The agreement was between NAMA and Avsatel GMBH of Vienna, represented in Nigeria by Avsatel Communication Limited. Though it was Fani-Kayode that brought the irregularities in the Safe Tower project contract to light, he found himself in the dock on 2 July 2008, along with Borishade and Iyayi.He appeared to have been caught in the fussilade meant for Borisade by those in the corridors of power who wanted Borishade indicted, thereby sealing his political ambition. Fani-Kayode was stunned by his arrest by the EFCC, as he had assumed he would only be made a witness against his predecessor. Instead, he was arraigned for alleged criminal conspiracy, breach of trust, forgery and misappropriation of N19.5 billion federal government fund meant for the renovation of the four international airports of Lagos, Abuja, Port Harcourt and Kano.

– Additional Report by Funsho Balogun.