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OBJ/Atiku scandal: What EFCC failed to disclose-TheNEWS/Saharareporters

September 24, 2006

Fresh evidence reveals that the Economic and Financial Crimes
Commission’s probe into Vice President Atiku Abubakar’s handling of money
belonging to the Petroleum Technology Development Fund did not disclose all

Three weeks ago, when the Economic and Financial Crimes Commission
(EFCC) submitted the report of its probe into the affairs of the Petroleum
Technology Development Fund (PTDF), the name of Deputy Senate
President, Ibrahim Mantu, was conspicuously missing from the list of those
interrogated. And up to now, Mantu, one of the arrowheads of President
Olusegun Obasanjo’s aborted third term project, has not been mentioned as a
beneficiary of the corruption that has turned the Presidency into an
open sewer.
As a matter of fact, Mantu was not quizzed. Yet, the Deputy Senate
President who, as head of the 2005 Hajj operations, has been indicted for
mismanaging money meant for that year’s Muslim pilgrimage by the Usman
Bugaje-led House of Representatives Committee on Hajj, was recommended
for interrogation by an audit report on the activities of PTDF
activities between 1999 and 2006.
The report, exclusively obtained by TheNEWS, is titled: Special Audit
Report On The Operations Of The Petroleum Technology Development Fund
For The Period Between 1999 To May 31, 2006.
The audit was carried out by Emeka Ifezulike & Co., a firm of chartered
accountants appointed by the EFCC. In its investigations, the firm was
assisted by two EFCC operatives–James Garba, Senior Financial
Analyst/Adviser, and Abdullahi Usman Bello.
A section of the report titled ‘summary of findings quantified,’ reads:
“We have prepared a comprehensive schedule of transactions assessed to
be very suspicious–DISCOVERIES. The schedule shows the details of
transactions and the persons that should be subjected to fraud
investigation.” Attached to the section is a long list of persons to be
interrogated, on which Mantu was the 17th entry. His interrogation was prescribed
because he was found to have collected contingency allowance of $10,000.
But the Deputy Senate President’s name was not the only one missing
from the list of beneficiaries of PTDF money as rolled out by the EFCC in
its report. Also recommended for interrogation was Senator David
Brigidi. In the PTDF’s books, Brigidi was deemed to have received N2.42
million as refund for attending a seminar. However, the auditors found no
evidence of attendance and the EFCC report did not also show that he was
quizzed.
Another name on the list of beneficiaries is that of Alhaji Lamidi
Adedibu, the controversial Ibadan politician, who got N1million for an
undisclosed purpose. However, he was not recommended for investigation.
But a curious omission from the EFCC report was Bodunde Adeyanju,
Special Assistant to the President on Domestic Matters. The audit report
listed Adeyanju as the recipient of N17 million.
Though the EFCC quizzed Adeyanju, the commission’s report was silent
on his involvement. This was seized upon by the Atiku camp to condemn
the commission, which indicted the VP for mishandling PTDF resources via
alleged investments in personal businesses, as biased. The report was
later adopted by the administrative panel established by President
Obasanjo, who immediately forwarded it to the National Assembly for
consideration.
In the first response to the allegations against Atiku, Garba Shehu,
Media Consultant to the VP, dismissed the EFCC report as a product of
conjectures and “a cocktail of lies and malicious fabrications.”
Shehu argued that the report did not link Atiku, directly or otherwise,
to any wrongdoing and described the findings as a one-eyed view of
events. “For example, the payments traced to Umar Pariya (Atiku’s Personal
Assistant) only reflected one side of the transactions in a campaign
account jointly managed by the President and Vice President,” he said,
adding that the instructions for the withdrawals from the campaign fund
were jointly issued by Obasanjo and Atiku. Monies for Obasanjo were
withdrawn by Bodunde, said Shehu, while those for Atiku were withdrawn by
Pariya.
The VP’s Media Consultant was referring to the statement made by Otunba
Samuel Oyewole Fasawe, businessman and friend to Atiku and Obasanjo, to
the EFCC. Fasawe identified Adeyanju as a conduit through which money
reached the President. Shehu alleged that a total of N3 billion went to
the President from another account run by Fasawe.
Responding to Shehu’s claims, the Presidency claimed Fasawe gave
Adeyanju only N5million. This, it maintained, was a gift. “Concerning Mr.
Bodunde Adeyanju, who was mentioned as a beneficiary of the PTDF fund,
Fasawe or any campaign fund, nothing can be further from the truth. Fasawe
is well known to Adeyanju and has given him cash gifts since their
relationship began eight years ago, long before the election of the
President. Facts, which can be checked from the EFCC, show that not more than
N5million had been given him over the years. Could that be campaign
fund or to bribe President Obasanjo?” Mrs. Remi Oyo, Senior Special
Assistant to the President on Media and Publicity, asked in a press
statement.
However, the audit report declined to support her claim, tracing
N17million of PTDF money to Adeyanju.
But there were other issues of illegal use and abuse of the resources
of PTDF, pointed out in the report.
According to the auditors, PTDF accounts were incomplete, as relevant
documents on its operations–for the period covered by the audit–were not
made available. For example, accounting records for 1999 and 2000 were
not submitted for inspection. Contrary to accounting convention, the
agency did not maintain a fixed assets register, ensuring that there were
no records of PTDF’s fixed assets. In addition, the auditors also
discovered that expenditures were not determined by goals set at the
beginning of the year, but made as the need arose and that the agency did not
operate formal annual budgets. The report described the latter as
“embarrassing” because it implies a total absence of monitoring, planning
and control mechanisms.
The absence of these spawned a raft of crooked practices, through which
principal officials gorged themselves on PTDF money like a buffet. A
favoured trick, auditors discovered, was inflation and splitting of
contracts.
A review of PTDF’s internal control system showed that a lack of
checks and balances in fund disbursement encouraged shady transactions. A
contract for the supply of computers was split into 10 places in equal
terms. Again, a printing contract awarded to Garajo Nigeria Limited, was
executed and paid for without approval. Worse still, the auditors found
no evidence of supply.
But there were variations to the theme. For instance, a contract for
the installation of two DSTV equipment at the PTDF Guest House cost the
agency N512,000 as against the then advertised rate of N40,000 each!
It was also discovered that the PTDF, under Y.H. Abubakar, Executive
Secretary, signed a contract with Univation Limited, UK. The company is
an arm of Robert Gordon University, Aberdeen, Scotland.
The purpose of the contract was for the placement of Nigerian scholars
in foreign universities and making payments relating to the scholars on
behalf of PTDF. Under the agreement, Univation was to provide services
and support to PTDF scholars, as well as offer management and
operational support to the agency’s Overseas Scholarship Scheme (OSS).
However, the auditors discovered that Univation failed to render
regular returns on the amount expended on each scholar, making accountability
unrealisable.
Another was a contract signed between PTDF and Univation, in June 2001,
for the supervision of the upgrade of the Petroleum Training Institute
(PTI), Effurun, Delta State. Between 2002 and 2005, more than N876.4
million was expended. Univation executed only the educational and
curriculum upgrade, ignoring the construction aspect. Yet, the company was
paid in full.
On a visit to Univation in Aberdeen, the auditors obtained documents on
total receipts and payments on each scholar as well as the upgrade of
PTI.
Out of the $5.35 million paid Univation as mobilisation and set-up fee
for the PTI upgrade, $2.2 million was paid to four Nigerian
companies–Edington Limited, Biosynthesis Nigeria Limited, Remington Limited and
FDZ Nigeria Limited–on the Executive Secretary’s instruction for jobs
earlier done on the upgrade of PTI. The four companies were discovered to
have given fictitious addresses, while jobs purportedly completed were
never done.
For instance, the auditors could not find evidence of the supply of
items or provision of the services listed on the invoices they submitted.
A letter of certification written by the Executive Secretary (ES) to
Univation read: “We also certify that CCTV and generator have been tested
as agreed in the terms and conditions of the contract entered into with
them.”
In yet another letter, the ES wrote: “FDZ (Nig.) Limited has supplied
and installed two mobile satellite telecommunications system to our
sites in Warri and Abuja. We also certify that the two systems have been
tested and commissioned.”
In an earlier investigation by the EFCC, the ES, who has now fled the
country, refunded N200 million to PTDF, out of N256 million paid by
Univation.
Aside from this, the auditors also found that PTDF made numerous
payments worth millions of naira, based on request, from government
organisations and top government officials. Some of these requests, explained
the report, came from senators, Special Assistant to the Vice President
on Economic Matters and Office of the Accountant-General of the
Federation. “In most cases, monies collected were not accounted for,” wrote the
auditors.
The infidelity in contract awards ran side by side with similarly
questionable lodgments of PTDF monies in banks. These, reckoned the
auditors, caused the agency huge losses in foreign exchange and naira because
placements were made at rates below the prevailing deposit rates,
notwithstanding the amount and period.
In 2003, a sum of $125 million was released to be paid into the account
of the PTDF, following the approval of President Obasanjo. Sequel to
the approval, $72.1million and $52.9 million were transferred to PTDF’s
account at First Bank Nigeria plc.
On 29 April, 2003, Vice President Atiku Abubakar approved the
investment of the proceeds of the sum in Trans International Bank (TIB), now
part of the newly formed Spring Bank; and Equitorial Trust Bank (ETB). The
sum of $10 million was placed in TIB, while $115 million was placed in
ETB.
Following the VP’s approval, the auditors wrote, $62.1million was
transferred from PTDF Dollar Domiciliary Account at ETB. Through a letter
dated 20 August 2003, PTDF moved an additional $52.9 million to ETB,
bringing the total deposit to $115 million of the $125 million released by
the Federal Government, as approved by Atiku. According to the audit
report, $115 million was added to the initial deposit of $50million made
in June 2002, raising PTDF deposits with ETB to $165 million. The
proceeds of this sum was reinvested in fixed deposits at ETB and other banks
at different times. The other banks, omitted from the EFCC report, are
Platinum Bank (N400 million); Trade Bank (N360 million); Hallmark Bank
(N400 million) and City Express Bank (N100 million).
The investment pattern approved by the VP at ETB were as follows: the
conversion of $100 million to Naira at the rate of N128 to $1 and the
proceeds invested under Term Deposit at an annual rate of 14 per cent;
and the investment of $15 million in PTDF Dollar Domiciliary Account in
a Term Deposit for 180 days at an annual rate of 1.5 per cent.
In accordance with the VP’s approval of April 2003, First Bank also
moved the sum of $10 million to TIB, being the balance of $125 million,
on 14 July 2003. The amount was found to have been placed in Term
Deposit, as approved by the VP, and subsequently rolled over repeatedly.
But the auditors considered the investments suspicious. On these, they
wrote: “The team (audit team) obtained the Minimum Rediscount Rate
(MMR) from the Central Bank of Nigeria for 2000 to 2005 to enable it
determine the prevailing market interest rates for the period. The average
interest rate for 2003 was computed to be 14.89 per cent. At a
conservative 4 per cent mark-up added to the average MMR in line with market
practice, PTDF deposits should have earned a minimum of 18.89 instead of 14
per cent flat rate it placed its deposits in banks irrespective of the
amount and period.”
The report quoted the letter of the Executive Secretary to the
Presidential Adviser on Petroleum and Energy, on 31 March 2003, in which the ES
admitted that the money market instruments attracted high yield with
treasury bill rate at 17 per cent.
“If conservative 4 per cent mark-up was added, then the prevailing
market rate would have been 21 per cent. It is, therefore, apparent that
the Fund invested its funds in banks even below the prevailing MMR. This
is suspicious. It would appear that brokerage/commission was collected
and pocketed by some officials of the Fund,” the audit report
concluded.
The report also quoted the ES and one Uko Nwafor (former AGM, Finance
and Accounts) as saying the interest rate for PTDF deposits was
determined by the agency’s officials and approved by the VP.
On 18 November 2003, the VP was found to have approved the release of
$20 million to the PTDF. This, the auditors claimed, was done without
the approval of the Federal Executive Council (FEC). The approved release
was then lodged in TIB for 365 days at 1.75 per cent interest. On
account of the liquidity generated by the placement, TIB, a bank rated as
gasping for breath, granted loans in excess of N1.5 billion, net of
interest, to Otunba Fasawe through his companies, MOFAS Shipping Line and
Netlink Digital Television (NTDV).
NDTV’s banking relationship with TIB was discovered to have begun in
December 2002, when it opened an account with an initial deposit of
N500,000. In August 2003, the said account was debited N700million,
resulting in an “unsolicited, unauthorised and unsecured loan,” as NDTV made
no application for such.
The auditors said they were told by Mr. Olusegun Egunjobi of TIB that
the loan was booked by the bank to enable NDTV pay iGate, an American
telecommunications firm, the sum of $6.5 million. The payment was meant
to be a sign of NDTV’s commitment to a joint telecommunications deal.
Five days later, the loan was reversed because the NDTV opted not to
remit the money to iGate at that time. However, the loan attracted
interest and other charges of N4.8 million, which Egunjobi agreed to write
back to the account.
Other unauthorised draw-downs continued until 16 October 2003, when the
total debit in the account hit N380.5 million. This was followed by the
granting of N400 million medium term loan to NDTV four days later,
while an overdraft of N20 million and a working capital of N400 million was
granted to MOFAS.
The auditors said these were part-payment to iGate, as they discovered
evidence of payments of $I million and $500,000 to iGate.
Again in January 2004, NDTV was granted another facility of N735
million. This came shortly after PTDF deposited an additional $20 million at
TIB in December 2004, “as approved by the VP.” On behalf of NDTV, the
bank remitted the dollar equivalent of N730 million to iGate in January
2004. Curiously, however, NDTV’s account was not debited until April
2005. The remittance was the balance of $5 million due to iGate in
respect of the $6.5 million.
However, both the audit report and that of the EFCC agreed that Fasawe
and his companies have a long-standing relationship with the VP, as
both traced local drafts worth N61 million and N250 million paid to Alhaji
Atiku Abubakar and Marine Float Limited on 29 January 2001 and 18
February 2003 respectively. Both reports also said the VP is related to
Marine Float account at Bank PHB, which “several suspicious transactions in
hundreds of millions of naira” passed through.
The audit report also disclosed that huge payments to individuals and
corporate organisations emanated from MOFAS account operated by Fasawe.
Some of the beneficiaries listed were Umar Pariya, Personal Assistant
to the VP (N104 million); Peoples Democratic Party’s National
Headquarters (N100 million); Bodunde Adeyanju (N17 million) and Alhaji Adedibu
(N1million).
In its recommendations, the audit report said the PTDF should be run on
annual budgets and that its annual expenditure should not exceed a
known (fixed) percentage of total releases to it.
The auditors also suggested that the agency’s annual budgeted
expenditure should follow the Federal Government’s budgetary process,
restricting releases amount budgeted and approved by the Federal Executive
Council (FEC).
To ensure adequate internal control, the auditors recommended that
qualified and experienced persons should be engaged or redeployed from
other agencies.
Also, the audit report suggested that the VP should be sanctioned for
unilaterally approving the release of additional $20 million to PTDF,
without approval of the FEC, except he gives a satisfactory explanation.
A satisfactory explanation, said the report, should also be obtained
from the VP for imposing TIB and ETB on PTDF as alleged by its Executive
Secretary since it was not his responsibility to directly manage the
PTDF funds.
The VP, former management of PTDF, TIB and ETB were also recommended
for sanctions and/or refund to PTDF the monies lost through placements of
its funds below the prevailing MRR.
The management of PTDF and TIB are also to ensure a refund of $23.75
million trapped in the bank, while PTDF should liaise with Nigeria
Deposit Insurance Corporation (NDIC) with a view to recovering the over N300
million and the N100 million trapped in Trade Bank plc and City Express
Bank plc respectively.
Again, it was recommended that TIB should write back the N4.8 million
interest and commission initially debited to the account of NDTV
Limited.
Another prescription was the compulsory return of financial gifts by
those who benefitted from the accounts of MOFAS and NDTV. This, the
auditors believe, could be used to repay PTDF’s trapped funds.
In addition, the Federal Government was urged to propose a bill to the
National Assembly putting a ceiling on political contributions or
donations to persons and political parties by individuals and corporate
entities.
Since the EFCC released its report, the spokesmen of the VP have
repeatedly attacked it. Garba Shehu, Atiku spokesman, disclosed that the
Marine Float account was a campaign fund jointly run with President
Obasanjo. Shehu said it was into the account that Plateau State Governor,
Joshua Dariye, donated N100 million to the Obasanjo/Atiku Campaign
Organisation in 2003.
He added that the President was compelled to make a refund of N50
million when the donation provoked controversy. After the refund, the
President compelled his deputy to repay the other half. “The account was
maintained to finance campaign activities and was held in trust for the
Obasanjo/Atiku Campaign Organisation by Fasawe, a mutual friend of Vice
President Abubakar and President Obasanjo. Two similar accounts were kept
by Chief Emeka Offor and the late Waziri Mohammed,” Shehu said.
Remi Oyo, Senior Special Assistant to the President on Media and
Publicity, returned Shehu’s fire, accusing the VP of dodging the allegations
levelled against him. The presidential aide said Obasanjo had no
relationship with the account, adding that Dariye’s donation went into the
Marine Float account.
But the Atiku camp insisted that Obasanjo benefited from PTDF money in
TIB by drawing over N3 billion from a particular account run by Fasawe.
Shehu listed the President, his family, businesses and hometown as well
as PDP as direct beneficiaries of money drawn from the accounts. “The
MOFAS account is a dedicated account run by Otunba Fasawe which was made
available to the President and the party is well aware of movements
into and from the account,” stated Shehu.
He alleged that cheques worth over N100 million were issued to IBAD
Nigeria Limited, a construction company, from Fasawe’s MOFAS accounts in
TIB. TheNEWS gathered from the Corporate Affairs Commission that the
directors of the company are Olusola Iyabo Obasanjo, Sopeyin M.O., Atsu
Daniel, Igede Lucky Onyema, Akande Olubusola and Soleye Onaolapo. Fasawe
also donated money to the Africa Leadership Forum (ALF) founded by the
President and OBJ/Atiku Campaign Organisation. It was through Fasawe’s
donations that the President bought a brand new Peugeot 607 for Ms.
Lamide Adegbenro, his mistress. This remained uncontested by the
Presidency.
Obasanjo was again accused of buying a Prado Jeep for Mrs. Ajoke
Mohammed, widow of former Head of State, General Murtala Muhammed. Both
vehicles were said to have been supplied by R.T. Briscoe in December 2001.
At the same period, the company also won a contract for the supply of
two Coaster buses for Obasanjo’s Bells Comprehensive High School, Ota.
While the Atiku camp admitted that Fasawe donated one building to the
Atiku-owned ABTI/American University, Yola, he pointed out that the
donation of the Coaster buses ( worth N11 million) to Obasanjo’s school is
evidence that the President benefitted from the MOFAS account and the
Marine Float account at Habib Bank.
Last week, Atiku himself came out to deny the allegations against him.
In a letter addressed to the Senate President, Ken Nnamani, and Speaker
of the House of Representatives, Alhaji Bello Masari, Atiku described
the allegations as mischievous.
Atiku urged the National Assembly to reject the report of the
investigation because its outcome was predetermined.
“I would like to state here categorically that the findings of the EFCC
as contained in its report dated 24 August 2006 and the contents of the
report of the so-called ‘Administrative Panel of Inquiry,’ based on the
EFCC report as they purport to relate or refer to me, are totally
false, baseless and unsupportable by the facts in this matter. I would urge
you to address your minds accordingly and consign these reports into
the dustbin of history, where they belong,” read the VP’s letter.
Atiku attributed the allegations against him to a design to stop him
from contesting next year’s presidential election, for which he has
declared interest. Atiku, who described the EFCC report as irresponsible,
argued that he should have been given a copy of the report and allowed to
go through it with his lawyers.
Will Atiku’s defence see him through? The courts will determine.

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