The world has become numb to Nigerian corruption scandals, such is their frequency. Whilst the issue has been front and centre of the manifestos of both candidates, tackling corruption in Nigeria is nothing new. Let us not forget that it was corruption during the first republic that led to the military launching the country’s first coup in January 1966.
At the time Major Chukwuma Kaduna Nzeogwu, who plotted and led the coup, said “our enemies are the political profiteers, the swindlers, the men in high and low places that seek bribes and demand 10%...those that have corrupted our society and put the Nigerian political calendar back by their words and deeds”.
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We have just finished another hard-fought election campaign in Nigeria with President Buhari now set to be installed for a second term on the back of a campaign that continued to lead the fight against corruption. Yet despite the political posturing Nigeria is still weighed down by this endemic issue. According to a recent World Bank report, Nigeria is estimated to have lost over $500bn to corruption since independence.
Few will forget the images of former oil minister, Diezani Alison-Madueke, being arrested in London in 2015 accused of stealing, according to President Buhari, ‘a mindboggling sum of money’. The arrest was seen by many as a scalp that Buhari had promised during his election campaign, and he and his advisors have done what they can to reinforce the image of Buhari being the one who tackled corruption.
However, despite the narrative that the President enjoys for tackling corruption, rumours have been swirling amongst business circles of Lagos and Abuja for much of Buhari’s tenure that the truth is more nefarious. With the President’s much publicised ill health having led to periods of extended absence from the country, a vacuum of leadership has enabled the rotten elements of Nigerian society to carry on as normal. As one Lagos based oil executive explained to us: ‘Unfortunately it has been a case of when the cat’s away, the mice will play’. But the more serious question is whether the existing corruption scandals are taking place without the President knowing, or with his tacit approval.
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Although to date many of the high-profile corruption cases have largely focused on domestic issues, we are now increasingly seeing international businesses and individuals appear in the headlines. JP Morgan, the US investment bank, is currently embroiled in a case involving the transfer of $875mn from an account controlled by Dan Etete, a former Nigerian official convicted of money laundering. In September 20018 Italian businessman Gianluca Di Nardo was convicted of international corruption by a Milan court for his role in a $1.1bn deal for rights to one of Nigeria’s most promising oil blocks. Now, the spotlight has fallen on another oil industry player, Levene Energy, and how it has become part of the playing field thanks to the company’s political connections.
Questions have been raised within Nigerian business circles as to how a company which had no history of operating in the industry could have won one of Nigeria's lucrative oil lifting licenses.
According to sources within the Nigerian media, Levene Energy’s Managing Director, Jonathan Warshawsky, has for many years been responsible for the negotiation of oil rights on behalf of his clients in partnership with the Lagos-based lawyer and now business partner, Asue Ighodalo, who also acts as the group Chairman of Levene. Allegedly Warshawsky and Ighodalo began working successfully in Nigeria many years ago organizing meetings with government officials on behalf of their clients. These meetings are reported to have directly led to major oil contracts being awarded to operators across Nigeria.
In itself arranging meetings with government officials is not a crime, but when taken in the context of the highly corrupt and secretive Nigerian oil market deals are rarely done without inducement.
When questioned on the process of awarding oil lifting contracts, an unnamed employee of the Nigerian National Petroleum Corporation (NNPC) told us: “Crude oil lifting contracts in Nigeria are won only by the politically connected. The process is simply a method of enriching political sponsors and associates, relatives as well and the traditional heads, who wield influence in their respective kingdoms and locality.”
According to the rumours, Levene's Vice Chairman, Nasir Ado Bayero, is a person who has the trust of President Buhari and by this connection the company is useful to the regime. Bayero allegedly agreed to help Warshawsky although under what terms remain unclear. What is clear, however, is that President Buhari considered Bayero, and the latter's family relationship to the Emir of Kano, to be vital allies in cementing his grip over Northern Nigeria, the president’s main power base.
In return Levene's objective was to secure major oil trading contracts, apparently at the expense of the clients that Warshawsky and Ighodalo themselves has been acting on behalf of in the past. Despite reported concerns that Buhari had about being seen to award contracts to his circle of friends, he knew he needed the support base that Bayero and the Emir of Kano were able to provide, and therefore passed the deal through against the advice of some of his closest advisers.
When questioned on this, one official close to the Nigerian authorities speculated that the circumstances that enabled Levene to secure the contracts were the result of payments made offshore. Although it is not possible to substantiate these claims, the path of making offshore payments to government officials in return for oil contracts is a well-trodden one.
Now that President Buhari has been presented with a fresh mandate by the Nigerian people to continue his fight against corruption, it is likely he is going to need to start looking closer to home if he is to truly clean up the country, even if that means losing a few friends along the way. Only by taking action and bringing in policies that offer a far more transparent system of awarding contracts will he be able to truly say that he is the man who got serious about tackling corruption.
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