Gabriel Suswan, former governor of Benue State, and officials of his administration have been recommended for prosecution and declared unfit to hold public office for involvement in industrial-scale fraud and financial mismanagement in Benue State between 2007 and 2015.
They have also been directed to return monies fraudulently obtained, with Suswam alone lined up to refund over N3billion. These are contained in the government whitepaper on the report of a commission of inquiry into government finances during the eight years of Suswam's governorship. The whitepaper conveys an acceptance of the recommendations of the commission, which beamed the searchlight on Suswam's tenure as governor.
The whitepaper, titled: Government Views and Decisions On Report Of the Judicial Panel Of Inquiry Into Funds Accruing/Received And TheUtilization Of Benue State Funds/Assets, 2015, exclusively obtained by Saharareporters, is a catalogue of financial opacity, outright theft, mismanagement and inefficiency among other indices of misgovernance under Suswam.
Aside from Suswan, the whitepaper recommends that that Mr. Omadachi Oklobia, Suswam's Finance Commissioner, and Mrs. Ruth Ijir, Permanent Secretary, Ministry of Finance, be barred from holding public office. It is also recommended that Ijir be compulsorily retired from the civil service. Others recommended for sanction include Emmanuel O. Atini, Asen Sambe, Andy Uwoukwu, Joseph Kpaakpa and Terfa Ihindan.
The listed public officials were the biggest actors under Suswam's administration in the state, which the commission's report and government whitepaper presented as resembling an ethical free-trade zone.
The six-member commission, headed by Justice E.N Kpojime was constituted by Suswam's successor, Governor Samuel Ortom last July to examine the report of the transition committee, which presented a depressing picture of the economic and financial position of the state. The transition committee had observed that the handing over notes submitted by the Suswam administration showed unclear revenue streams for the state, gross financial indiscipline within the agencies and among officials of government, zero balances in government treasury, huge debt burden and uncertain level of control in the ownership of government-owned enterprises and stocks, gargantuan corruption and waste in the business of governance. It also observed widespread decrepitude in physical infrastructure, abandonment of many government projects were abandoned as well as a protracted closure of schools in the state on account of non-payment of salaries and allowances to teachers and other civil servants, yielding a very low morale.
The Judicial Commission was, thus, mandated to identify all revenue sources and determine the aggregate of revenue that accrued to the state between June 2007 and May 2015 by specifically determining how much was received from these sources.
While carrying out its work, the commission identified 27 sources of revenue to the state during the period. Notably, they included statutory allocations from the Federation Account, statutory allocations from the Federation Account to the Local Government Councils (LGCs), Internally Generated Revenue (IGR), bonds, loans from commercial banks, micro, small and medium-scale enterprise (MSMEs) Loans from Central Bank of Nigeria (CBN). Also found as revenue streams were received funds from Bank of Industry, Excess Crude Receipts, Ecological Funds, Value- Added Tax (VAT), state component of Sure-P funds, local government councils component of Sure-P funds, Millennium Development Goals (MDGs) Funds, Proceeds from Sale of Shares, Proceeds from Sale of Government-owned Enterprises, Lease of Government Assets and Properties, Budget Augmentation Funds from the Federation Account, London Club debt refunds, Nigeria National Petroleum Corporation (NNPC) Refunds, Exchange Rate Gains and Additional Funds from Accountant-General of the Federation. Others were Universal Basic Education Commission (UBEC) Funds, Tertiary Education Trust (TET) Funds, National Economic Empowerment, and Development Strategy (NEEDS) Assessment Funds, United Nations Development Programme (UNDP) Funds and Board of Trustees (BOT) Grants to Tertiary Institutions.
Similarly, it was mandated to ascertain the quantum of stocks owned by the state in Dangote Cement Company Plc, Julius Berger Plc, Benue Breweries Ltd. and other companies or enterprises as well as uncover the circumstances that led to the sale of such shares / stocks and their worth or value, investors who bought the stocks/shares, determine whether the transaction conformed with due process and ascertained the where the proceeds of sale went among other things.
In the same vein, it was also directed determine if the funds realized from the sale of such were appropriated, ascertain how they were applied and utilized, establish misappropriation (where applicable) and identify those involved and prescribe an appropriate course of action to the government. The commission had within six months to work.
It commenced its public sittings last September but suffered a 21-day interruption on account on an interim order obtained by Suswam, who challenged its legality. The order was subsequently vacated on November 9, with the commission resuming its work two days later.
The aggregate of revenue which accrued to the state from all the listed sources during the period investigated, its report showed, was N1.02 trillion. A total amount of allocations from Federation Account (statutory allocations only) was N282.1 billion. Total receipts from VAT amounted to N56.2billion while N35.8billion came from the Excess Crude Account. From Ecological Funds, the state got a total of N2.5billion and N5.3billion from MDGs. The total amount of Sure-P Funds was N14.2billion while SMEs Funds amounted to N3.5billion. IGR accounted for N78.07billion while bonds and loans amounted to N69.843billion.
From Local Government Funds, the state realized N348.2billion. From Universal Basic Education Funds, it took N92.9billion. From other sources, it earned N23.2billion. The commission observed that revenue opportunities from development partners were treated with indifference, the result of which "was little or no revenue from those areas especially those that required counterpart funding and special institutional structures to attract."
The commission also observed that on account of inefficient revenue collection machinery and administration, IGR was low relative to the opportunities available in the state.
"Some agencies of the state such as Radio Benue, Secondary Schools and Tertiary Institutions failed to disclose their IGR.
"The Local Government Councils (LGCs) recorded zero level IGR within the period under review," said the report.
While examining the appointment of the former chairman of Benue Inland Revenue Service (BIRS), Mr. Andrew Ayabam, the commission discovered that the terms of his appointment were unrealistic. Ayabam, for example, was given a bonus of 10% of the excess of the target set for him, a percentage not based on the revenue actually collected, as it covered all revenues, including the PAYE of civil servants, deducted at source from the Office of the Accountant-General and the revenue generated by other agencies.
Thus, the amount collected monthly was determined Ayabam, who was simultaneously chairman and consultant to the service, rather than the Accountant-General, whose responsibility it was to report revenues accruing to the government. This gave rise to the declaration huge, but phony figures.
Equally grim disclosures emerged from the commission's investigation into government-owned stocks in many companies. The commission found government-owned shares were sold on the directive of Suswam, who according to the Benue Investment and Property Company (BIPC), which managed the shares, summoned its Managing Director Mrs. Brigid Shiedu and the former Finance Commissioner Omadachi Oklobia to the Government House and informed them that government wanted to complete some development projects but had run out of funds. "Consequently, he directed the sale of part of the portfolio of shares held by the government through BIPC since it was the most viable option for raising funds internally," the report said.
This turned out to be nothing but a pretext for theft. According to the commission's findings, which have been accepted in the whitepaper by the government, some of the projects for which funding was sought through the sale of the shares were the basis for the earlier floatation of two bonds worth N18billion were documented as having been completed in the administration’s “First Term Report: 2007 –
2011”. Yet, these projects were consistently funded from the 2008 to 2015 budgets. Among these was the construction of Greater Makurdi Water Works, construction of the Otukpo Township Water Supply Scheme, construction of Otobi Water Works, construction of Katsina - Ala Water Works and construction of Benue State University Teaching Hospital, Makurdi.
Also, observed was a discrepancy in the figures given as the amount of proceeds realized from the sale of shares. While BIPC told the commission that N8.3billion was realized, Elixir Securities Ltd. said N9.4billion was realized. The 15 % discount was considered suspiciously high.
The sale of shares gave rise to a series of patently dubious transactions. In one of such, the sum of N1billion from the N9.4billion proceeds of shares sold by BIPC was directly paid into a GTBank Account No. 0027866325, with the beneficiary being BIPC. The sum of N5.3billion was paid into the Zenith Account No. 1013852648, which is operated by Benue State Ministry of Finance while Fanfash Resources received N3.1billion via its Zenith Bank Account No. 1013677218, which was presented as a project account of the Finance Ministry by Suswam's Finance Commissioner. However, the commission found that it is privately-run by Fanfash Resources, owned by a Bureau de change operator named Abubakar Umar. The amount was subsequently withdrawn, converted into foreign exchange and given to Suswam.
Similarly grotesque financial conduct was discovered with the sale of state-owned corporations such as Benue Breweries and Agro Millers, and lease proceeds of Taraku Mills and other enterprises. The sums realized, the commission reported, were paid into accounts of the respective reporting ministries and spent immediately, with most withdrawals being made in cash. and Agro Millers were sold, and the proceeds paid into the EcoBank and Skye Bank accounts of the Ministry of Commerce and Industries, headed by Ihindan. The entire amount spent without appropriation. Other sale and lease proceeds were similarly misapplied.
Equally depressing were discoveries by the commission that Dangote Cement, Julius Berger and other stocks being managed by BIPC were sold through Elixir Securities Ltd and bought by investors through various stockbrokers. Elixir Securities Ltd and BIPC, however, refused to divulge the identities of the buyers to the commission.
Benue Breweries Ltd, for instance, was sold at a giveaway price of N400million to M/S Consolidated Breweries Ltd. Agro Millers Ltd was sold for the same amount to to M/S Masco Agro Allied Industries Ltd, while Yuteco Foods Ltd was sold for an unspecified amount under receivership circumstances. The sale process was conducted with flagrant indifference to due process, as no pre-sale valuation was done to ascertain the true value of Benue Breweries Ltd. and Agro Millers before the sale, and neither were the sales consistent with the Benue State Privatization Law.
The refusal by BIPC and Elixir Securities Ltd to disclose the identities of the new investors was considered an attempt to shield those who had bought state-owned enterprises at rock-bottom prices from sanctions, particularly given the heavy discount that attended the transaction.
A clear indication that Suswam and officials of his administration treated state funds like a buffet on which they gorged is supplied by the difference between total revenues that accrued to the state and total approved estimates within the period under investigation.
With a total of N1.02 trillion received during the period, total approved estimates turned out to be N802.04billion. This implies that expenditures totaling N219.8billion were made without appropriation. In specific terms, over N10.9billion, the entire amount realized from sale and lease proceeds of government enterprises, was spent without appropriation. Similarly, the entire SURE-P fund proceeds of over N14.2billion was expended without appropriation.
Expenditure arising from the entire bond proceeds of N18billion realized in 2011 and 2014 were not appropriated for. The same way, the sum of N35.02billion expended on “logistic funds for Security Surveillance” was not appropriated just as the spending of N5.89billion presented as “Cost of Running Government,” a phrase alien to public sector budgeting, did not appear in any Appropriation Act during the period under review.
The commission noted that the floatation and utilization of the two bonds lacked transparency and described the amount expended on security as too high.
Despite Suswam's long and loud claim that he was developing the state, evidence provided by application and utilization of funds declines to support him. Of the total revenue of N1.02trillion from various sources in eight years, 85% went on recurrent expenditure, while about 15% was spent on capital projects, the obvious reason for the decrepit condition of physical infrastructure in the state.
The administration of capital expenditure was marked by absence of due diligence in contract billing, which resulted in contract padding and inflation; lack of due diligence in contract award, use of substandard materials, poor quality of jobs executed, abandonment of projects after collecting payments, payment for jobs not executed and multiple payments for the same contracts. These factors yielded a massive capital expenditure profile, which did not correspond with physical development.
In a similar vein, the huge recurrent expenditure profile was found to have been occasioned by verbal contract awards and cash payments. Such contracts, usually without timelines were used as instruments to siphon government funds as they were endlessly paid for. Salaries and wages were also found to have increased astronomically, with the total amount spent on salaries for civil servants and political appointees (excluding local government staff and primary school teachers) amounting to N253.7 billion. The big jump in wages was provoked by salary adjustments and dodgy payroll management. The latter manifested in the abuse of the manual payroll system, which was not completely curtailed with the introduction of e-payment and biometric payroll system.
Another feature of the Suswam administration was the release of overhead allocations to MDAs. This was exploited by commissioners and their permanent secretaries to violate financial regulations to run their offices, a system some witnesses referred to as “doctrine of necessity”. "These violations ranged from the illegal placement of government funds in fixed deposits accounts with banks and withdrawal of monthly accrued interests, diversion of funds meant for specialized purposes, corruption in contract administration and outright cash withdrawals and disbursements from accounts of MDAs without approvals," the report said.
Also found to be rife was the practice of huge cash transactions, which with its lack of documentation, made embezzlement easier. About 80% of transactions by the Bureau of Local Government and Chieftaincy Affairs, for example, were done in cash. From its FBN account 2017241513 which commenced operation in June 2011, the Bureau made withdrawals of N9.2billion in 2011, N12.2billion in 2012, N10.5billion in 2013, N8.5billion in 2014 and N2.5billion by May 2015.
Staff of the Bureau, on the instruction of Suswam and his Special Adviser on Local Government and Chieftaincy Affairs, Solomon Wombo, withdrew over N500million in cash per transaction.
Even the Ministry of Finance was involved, with the commissioner, permanent secretary, staff as well as bankers dealing in high- volume cash transactions.
The concept of security vote provided an endless invitation to abuse, as there was no security vote appropriated for in the budgets. Officials of the Ministry of Finance and the Bureau of Internal Affairs and Special Services simply took cash to the governor on demand. This was dressed up as “logistics funds for security surveillance,” a monthly expenditure that ranged from N100million to over N1.2billion in some months.
There was also the not exactly small matter of the Central Bank of Nigeria Commercial Agricultural Credit Scheme (CACS) loan of N1billion.
This was accessed from CBN in 2012 to finance small-scale farmers to boost agricultural production. However, it was found to have been mishandled. Of the amount, the sum of N806, 6million was given as loans mostly to politically exposed persons, friends and relations of Suswam, using non-existent businesses.
As a result, little repayment has been recorded since 2012. The sum of N193, 700,700.00 was entirely diverted to MDAs without any record of repayment as yet. The Ministry of Finance got N163.4million, Government House N5.3million, Bureau of Internal Affairs and Special Services N25million.
Remarkably, various sums were withdrawn from the MDAs’ accounts in cash on the approval of Oklobia, Ijir and other associates of Suswam, who were the biggest names on the list of those said to have participated in the biggest financial malfeasance in the history of the state.