Bukola Ogunyemi: An Inquest Into Nigeria’s Culture Of Corporate Corruption

According to public finance experts, Nigeria’s federally collected revenue from 1999 to 2014 stood at $690 billion. But you don’t have to live in Nigeria to know N138 trillion worth of human and infrastructural development does not exist anywhere. So how did Nigeria end up with stagnated development, less than appreciable growth, lower foreign reserves and higher debts after collecting an average of N9.2 trillion as revenue every year for 15 years? Corruption. An estimated $400 billion of the Nigeria’s oil revenue has been stolen or misspent since independence in 1960.

Nigeria’s Information Minister recently revealed that 55 people – government ministers, state governors, public officials, bankers and businessmen – stole $6.8 billion (N1.34 trillion) from Nigeria’s public purse between 2006 and 2013. He’s not the first to come forward with such damning revelations. Former Governor of Nigeria’s Central Bank, Sanusi Lamido, opened the lid on a $20 billion fraud in the account of national oil company, NNPC. A report by Global Financial Integrity shows in the 10-year period between 2003 and 2012, a cumulative amount of $157.46 billion left the shores of the country in illicit capital outflows, a total of $7.92 billion in 2012 alone.

Why is corruption and brazen theft of public funds so pervasive in Nigeria? Why is there such lack of restraint by public office holders, elected and appointed, when it comes to public purse? Corruption, going by the way and manner it is practised in Nigeria, is not just an act, it is a culture. A culture of corruption manifests in the act. A culture of corruption ensures all the proper ingredients to not only carry out the act, but also get away with it are in place. That culture of corruption is what politics and public service in Nigeria runs on. The corruption cycle starts with greed on the part of those with access to public revenue, but it certainly does not end there. There are the perpetuators of corruption – civil servant, ministers, law makers, governors. There are the enablers of corruption – the banks, the contractors, the construction companies, the multinational companies. Public outcry and most anti-corruption campaigns and legislations target the perpetuators, but the enablers are hardly ever in focus.

The $182 Million Halliburton Bribery Scandal

This is perhaps one of the most popular cases of alliance between government officials and corporate bodies to defraud the Nigeria people. It took about a decade for light to shine of the darkness that is the $182 million Halliburton bribery scandal involving several multinationals and Nigerian government officials. KBR, a Halliburton subsidiary, through British lawyer Jeffry Tesler used a network of secretive banks and offshore tax havens to funnel $182 million in bribes to Nigerian officials in exchange for a $6 billion turnkey contract for the Nigerian Liquefied Natural Gas (NLNG) project in Bonny, Rivers State. On one occasion he’s said to have dropped off a bag stuffed with $1 million in $100 dollar bills for an official at a foyer of a luxury hotel in Abuja.

In 2009, KBR pleaded guilty to multiple criminal counts of violating foreign corruption laws and agreed to pay $402 million as part of a settlement. In 2012 the company’s former CEO Albert Stanley was sentenced to 30 months in federal prison for his role in the scandal. Jeffry Tesler was also sentenced to 21 months in prison and forfeited $148.964 million from his Swiss accounts to the US government.

The $1.1 Billion Malabu Oil Scam

The $1.1 billion Malabu scam is a prime example of the synergy that exists corporate and political corruption in Nigeria. In 2011, multinational oil giants Shell and Eni paid $1.1 billion to the Nigerian government for oil bloc OPL 245 in what appeared to be a straightforward transaction. However, that money was transferred to a shady firm incorporated by a former Petroleum Minister, Malabu Oil and Gas. Shell and Eni claimed they were not aware the money would ultimately be diverted in such manner, but leaked email exchanges between officials of Shell and Eni obtained and published by Italian journalist, Claudio Gatti, showed that both companies actually wanted the money transferred to Malabu.

Diezani Alison-Madueke and Fidelity Bank

INEC officials in Rivers, Delta and Akwa Ibom states are alleged to have received N675.1 million as bribe to influence the results of the 2015 elections. During the course of investigations, the Economic and Financial Crimes Commission traced the disbursed funds to Fidelity Bank and uncovered a fraud involving former Minister of Petroleum Resources, Diezani Alison-Madueke, and Nnamdi Okonkwo, the bank’s Managing Director. According to details released so far by the EFCC, Diezani met with the MD in the build-up to the 2015 presidential election and enrolled his assistance in the collection of $115 million (N23.3 billion) which was then disbursed to a list of beneficiaries, including INEC officials, election monitors and several interest groups. Deposits were made into the bank by different companies while the MD himself received $26 million in cash.

Nigeria’s Anti-Money Laundering and Counter Financing of Terrorism Regulations require financial institutions to carry out enhanced customer due diligence and report transactions such as this to the Central Bank and EFCC’s Financial Intelligence Unit. Fidelity Bank claims these regulations were complied with, but in essence the bank, through its MD, was used as a conduit to facilitate bribery.

The Culture Of Corporate Corruption

Corruption in Nigeria comes in all forms and shapes. But political corruption cannot thrive without corporate corruption. When the men in agbada and babariga loot billions of public funds, it is the men in suit and tie who help them hide and launder such funds. Most corruption cases in Nigeria follow a typical pattern, the trail disappears as soon as the monies leave government coffers. Billions of dollars that should have been ploughed into developmental projects have thus vanished into thin air. Almost always, there is a corporate organisation involved, used as a shield to cover the illegality being perpetuated. Those are the enablers of corruption.

A report released in 2009 by Transparency International put the amount of bribes companies paid politicians and other public officials in developing and transiting economies annually at $40 billion. A breakdown of the N1.34 stolen between 2006 and 2013 given by Lai Mohammed shows the theft of N147 billion by 15 former state governors, N524 billion by bankers and N7 billion by four former ministers.

Corporate corruption in Nigeria is like organized crime. And politicians will continue to have no fear of retribution for stealing public funds as long as they have allies in the corporate world who help them perfect the process. According to a former assistant US attorney and professor at Notre Dame University, Jimmy Gurulé – If a bank has reason to believe that funds are in any way related to criminal activity, then any transfers in and out of the account should be reported. Banks should not permit their clients to benefit from dirty money”

In fighting the hydra-headed monster that is corruption, Nigeria cannot afford to ignore the culture of enablement made possible by the lack of ethics in the corporate circles. Without ensuring that when the hammer comes down, it comes down hard on those who made the theft of public funds possible, the potential remains that any anti-corruption drive will prove futile in the long term.

*Bukola Ogunyemi, a digital marketing executive, writes from Lagos.

**This column runs on AfricanLiberty.org every Thursday.