Copyright 2007 Houston Chronicle Washington Bureau
WASHINGTON — The U.S. Securities and Exchange Commission is trying to force a local attorney to cooperate with a federal bribery probe involving a tiny Houston firm that controls potentially lucrative oil drilling rights in West Africa.
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SEC officials investigating Houston-based ERHC Energy's business activities overseas are trying to compel attorney O.J. Chidolue of Sugar Land to hand over documents and speak with federal investigators, court documents show.
SEC officials are trying to determine whether "ERHC Energy ... and others may have violated certain of the anti-bribery, books and records, and internal control provisions" of federal securities laws, the agency said in a statement.
"O.J. Chidolue has refused to comply with the SEC's subpoena requiring him to appear for testimony before the SEC and to produce documents," SEC said in a filing this month in U.S. District Court in Washington.
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SEC officials believe Chidolue has documents that "are directly related to the SEC's ongoing investigation into possible violations of the federal securities laws by ERHC and others."
Chidolue could not be reached for comment Wednesday at his Houston-area office or home.
His Washington lawyers also could not be reached.
Dan Keeney, a spokesman for ERHC, said only, "We continue to work with and answer questions that the SEC has in the course of its investigation."
ERHC Energy has the rights to explore for oil in a stretch of the Gulf of Guinea thought to hold billions of barrels of crude.
ERHC had engaged the island nation of São Tomé and Príncipe years before other oil companies would give the former Portuguese colony a passing glance.
But the company's tumultuous relations with that government and its knack for negotiating potentially blockbuster contracts despite a lack of experience operating offshore have drawn scrutiny.
The Nigerian-born Chidolue, according to the SEC filings, is an attorney for Houston-based Chrome Energy and has served as a secretary and director of an affiliate, Chrome Management Services.
Chrome is controlled by Nigerian businessman Emeka Offor, according to ERHC's SEC filings.
Offor has had ties to top political leaders in Nigeria.
A Chrome Energy subsidiary is the majority shareholder in ERHC.
According to the SEC subpoena, investigators want Chidolue to produce documents related to Chrome, ERHC and Feltang International.
Feltang International, according to ERHC's previous filings with the SEC, is a British Virgin Islands-based company that got a Chinese oil company, Sinopec International, to sign a production-sharing agreement with ERHC to explore in the Gulf of Guinea.
Feltang was paid $3 million in cash, along with stock and options that last year were valued at nearly $10 million, according to the ERHC filing.
The SEC first launched an informal probe of ERHC two years ago, after the Nigeria and São Tomé and Príncipe Joint Development Authority awarded ERHC equity stakes in five offshore blocks.
In December 2005, São Tomé's then-attorney general called on U.S. officials to investigate ERHC's dealings in the region.
"At every stage," the attorney general said in a report, are suggestions ERHC and Offor "may have made improper payments to government officials."
The report cited a $100,000 payment Offor's Chrome made to a company controlled by São Toméan President Fradique de Menezes, and the role of Foreign Minister Mateus "Nando" Rita in helping to renegotiate ERHC's contract while also holding 500,000 shares of company stock.
The SEC launched a formal probe in February 2006, and three months later FBI agents raided ERHC's offices on Westheimer and carted off 118 boxes of documents.
The investigators were looking for possible "things of value" paid to officials in São Tomé and Nigeria, an FBI affidavit filed in Houston said.
On Nov. 15, 2006, the SEC served Chidolue with a subpoena, court records show. He was ordered to produce documents by Nov. 30 and give testimony on Dec. 7, but he has yet to do so.
On June 1, the SEC went to federal court to force him to comply with the subpoena. He has been ordered to appear in court June 26.
The subpoena requires Chidolue to produce any documents regarding "the business activities of ERHC ... including any communications with or payments to any government officials in Nigeria or São Tomé and Príncipe."
When FBI agents raided ERHC's offices last year, they seized a file labeled "William Jefferson."
Last week, a federal grand jury issued a 16-count indictment against U.S. Rep. William Jefferson, accusing the Louisiana Democrat of engaging in bribery and racketeering.
Jefferson has denied wrongdoing.
Jefferson was accused of soliciting bribes from an unnamed South African company back in 2001, in exchange for his help to resolve a spat over exploration rights in the waters off São Tomé.
ERHC was not mentioned in that indictment.
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