STAYING OUT OFTROUBLE IN THE PUBLIC SERVICE
Prof. Yemi Osinbajo, SAN
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POSSIBLY THE MAJOR OBSTACLE TO ECONOMIC GROWTH AND POVERTY REDUCTION/LIFE EXPECTANCY/ MORTALITIES/ DISEASESPERVASIVE AND ENDEMIC CORRUPTION ACCOUNTS SIGNIFICANTLY FOR OBVIOUSLY POOR POLICY CHOICESGRAND CORRUPTION / WHITE ELEPHANTS/ BASIC SOCIAL SERVICES
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THE CORRUPTION BURDEN
The United Nations Office on Drugs and Crime (UNODC) report estimates that in 2009, criminal proceeds amounted to 3.6% of global GDP, with 2.7% (or USD 1.6 trillion) being laundered.International Monetary Fund stated in 1998 - aggregate size of money laundering in the world between 2 & 5 % of world’s GDPUsing 1998 statistics, these percentages would indicate that money laundering ranged between USD 590 billion and USD 1.5 trillion. At the time, the lower figure was roughly equivalent to the value of the total output of an economy the size of Spain – per FATF
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Money Laundering Statistics
The International DimensionSince September 11th2001 and the commencement of America’s war against terror, international law enforcement has attained new dimensions.In the bid to stop funding of terrorist activities international law enforcement agencies have devised methods of detecting and seizing suspicious funds of any kind. Consequently proceeds of political corruption, in form of bribes, kickbacks or simply stolen funds coming to government officials is tracked, seized and it’s purveyors punished.The war against Terrorism has by default strengthened the war against corruption
BACKGROUND TO RESURGENCE OF INTERNATIONAL ACTION
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THE FINANCIAL ACTION TASK FORCE (FATF)G7 AND EU’s initiative to strengthen financial systems vulnerable to criminal networks. First set of principles, 40 Recommendations were released in 1990 mostly targeting the proceeds of drug traffickingOn June 20th2003, the scope of money laundering predicate offences was broadened to include all crimes. The FATF compiles a Non-Cooperating Countries List (NCCTS). Nigeria was listed in 2006 and till 2012 was listed as one of theCountries not committed to an action plan: high-risk and non-cooperative.In Oct 2013Nigeria was removed from the list of countries identified as jurisdictions with significant deficiencies in their Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) regimes.
THE INTERNATIONAL ANTI-CORRUPTION NETWORK
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An anti-money laundering consortium of 101 nationsAccess to other FIUsInformation sharing and exchange terrorist funds tracing, monitoring and freezing
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THE EGMONT GROUP – GIABA (THE WEST AFRCAN ZONE)HQ DAKAR
The Foreign Corrupt Practices Act (FCPA)The main objective of the FCPAis to prohibit companies and their employees, officers, directors and agents from paying or promising to pay bribes to foreign officials, public officials ororganisations, political parties, or their agents, to obtain or retain business.The FCPA has two components:- First, the anti-bribery provisions criminalise the bribery of a foreign official to obtain or retain business;Secondly, the accounting provisions require companies whose securities are listed in the U.S. to maintain accurate books and records and an effective system of internal controls. (Source:FCPA 1977, Anti-Bribery Provisions)UK Bribery Act (BA UK)S.6 states the Bribery of a foreign official is an offence punishable under the UK Bribery Act.A Foreign Official is someone that holds a legislative, administrative or judicial position of any kind, whether appointed or elected, of a country or territory outside the United Kingdom. (Source: UK Bribery Act 2010)
THE INTERNATIONAL ANTI-CORRUPTION NETWORK
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PEPS DatabasesPolitically Exposed Persons [PEPS] are individuals who are or have been entrusted with prominent public functions in a foreign country. Includes federal, state and local government officials.THE NIGERIAN FINANCIAL INTELLIGENCE UNIT (NFIU)Is essentially charged with receiving and disseminating Suspicious Transaction Reports (STRS)
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THE INTERNATIONAL ANTI-CORRUPTION NETWORK (contd.)
EXTENDED INTERNATIONAL COOPERATION-DUBAI EXTRADITIONUS FCPA/ UK BRIBERY ACT (slide 5)UK MONEY LAUNDERING LEGISLATION
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FLIGHT/MOVEMENT OFFUNDSFROMJURISDICTIONCURTAILED
THE ECONOMIC AND FINANCIAL CRIMES COMMISSION ACT (EFCC)THE INDEPENDENT CORRUPTION PRACTICES COMMISSION (ICPC) ACTMoney Laundering (Prohibition) Act 2011S.1 -3 provides that anyone who makes or accepts a cash payment of 5million and fails to make a declaration to the Nigerian customs Service shall be guilty of an offence upon conviction and be liable to 2 years imprisonment.Public Procurement Act of 2007S.57stipulates a Code of Conduct to be followed by all Public officers in the public procurement and disposal of assets, who shall maintain the highest standards of ethics in their relationships with persons real or corporate who seek government commerce whether as a bidder, supplier, contractor or service provider by developing transparent, honest and professional relationships with such persons.
THE LOCAL DIMENSION
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S.3 of the Freedom of Information Act 2011providesfor compulsory delivery and publication of information on:documents containing the names, salaries, titles, and dates of employment of all employees and officers of the institution;documents containing the rights of the state, public institutions, or of any private person(s);documents containing the name of every official and the final records of voting in all proceedings of the institution;It is a criminal offence for any officer or the headof any government or public institution to falsify orwilfully destroy any records punishable with1 yrImprisonment. (S.11)
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THE LOCAL DIMENSION (contd.)
Splitting of Contracts- the division or breaking up of Government Contracts into smaller quantities and amounts, or dividing contract implementation into artificial phases or sub-contracts for the purpose of evading or circumventing the requirements of law, especially where public bidding and other alternative methods of procurement is required.
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SPLITTING OF CONTRACTS
OlabodeIbiyinkaGeorge, the former Military Governor ofOndoState, and later Chairman of the Nigerian Ports Authority, was sentenced to a 30 month jail term in October 2009 for charges that included contracts splitting and inflation of contracts worth N84 billion while he was chairman of the NPA.In order to avoid exceeding the financial limit of 1million naira approved for the Commissioner in the Ministry of Trade, the DFA with the approval of the Ministerial Tenders Board split the 1Million Naira Christmas Turkey contract awarded toAlhajiEleyeto 10 contracts of N100,000 each.
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SPLITTING OF CONTRACTS:CASE STUDIES
1. ChiefAkandeJamal is the local government chairman of the Excellent Party inIperu. Just before the local government elections in the State, the following events occur:He received from Hon.Arobothe Commissioner for Internal Affairs who is from his constituency the sum of N6 million in cash to be used for mobilization activities preparatory to elections.ChiefAkandeJamal, in turn sent the sum of N5million to one of the ward chairmen. The police arrestedRasakithe Personal Assistant to ChiefAkandeJamal for money laundering and have withheld the sum of N1 Million as an exhibit.
CASE STUDIES
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Dr.Arabais the Hon. Commissioner for Works. He started building a house inLekkibefore his appointment to the state`s cabinet. As the house moved towards completion,EvaristoItaliano, a major construction firm which had won several contracts from the state, supplied gratis 100 truckloads of sand to the site to sand fill portions of the land which where waterlogged.Dr.Arabadid not ask for thefavourandEvaristoItalianosaid it was a complimentary gesture.Chief TonyEweleis the Chairman of Ogun Air Transport Corporation. The Ministry tender`s Committee which he chairs awarded his wife`s company Aromatic Caterers the contract to supply lunch for the Ministry’s three-day conference at the cost of N3 million. This was the lowest but one bid of all those who were invited to bid.
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Hon. Commissioner for Trade has recently purchased on behalf of the Ministry 52 buses from BMV motors. BMV motors also manufactures BMV salon cars. The total value of the buses purchased is N400 million. The commissioner made no demands of the BMV, however, the company decided on its own to give him a BMV salon car for his personal use.The Hon. Commissioner for Housing has recently obtained a building loan in the sum of 50 million naira at an interest rate of 14% per annum from the EFIX bank which is a major revenue collecting bank for the State. The bank’s usual interest rate for such transactions is 17%. However, the reduced interest was approved by the board of the bank.
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Hon. Commissioner for Trade has recently purchased on behalf of the Ministry 52 buses from BMV motors. BMV motors also manufactures BMV salon cars. The total value of the buses purchased is N400 million. The commissioner made no demands of the BMV, however, the company decided on its own to give him a BMV salon car for his personal use.
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The Governor has approved the Construction of a pedestrian foot bridge for the sum of N50Million,the sum is not provided for in the current budget butExcoapproved avirementof the sum from a vote of the Ministry of Environment. Would your answer be different if there was noExcoapproval?The Chairmen of all the local governments gave a gift of the sum of N2Million to the Commissioner for Local Government on his 50thbirthday.The directors in the Ministry Of Local Government decided that all officers who were willing should wear theAso-Ebi, but the sum of N50,000 was to be taken from running costs to buy theAso-Ebifor cleaners in the Ministry who could not afford it.
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Case Studies (contd.)
A HAZARD OF THE JOBPRELIMINARIES-DECLARATIONSTHE STATEMENTCONFESSIONAL STATEMENTSINCRIMINATING OTHERS
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INTERROGATION ISSUES
SLACKENED PACE –The Executive Arm of the Nigerian Government has failed in its duty to properly probe, investigate, and indict corrupt practices within High level arms of the federal government and government institutions. The EFCC having made significant arrests in the past, has slackened in its pace due to severe harassment and intense bullying.UnderMallamNuhuRibadu'sadministration, the EFCC charged prominent bankers, former State governors, ministers, senators, senate presidents, commissioners of Police, and other high-ranking political party members. In other words, the EFCC issued thousands of indictments and achieved about 270 convictions, including his former boss, the then Inspector-General of the Nigerian Police Force, MrTafaBalogun.
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THE LOCAL SITUATION TODAY
STALLED TRIALS –Trials cannot go one without the prosecution presenting their witnesses or indicted criminals. In theHalliburton/KBR scandal, the failure of government agencies to produce 14 witnesses billed to testify against three of the suspects in the bribery case jeopardised the trial. The trial judge had to throw out the case for failure of the prosecution to produce its 3 suspects and 14 witnesses.THE FUTURE –The new MoneyLaundringAct of 2011 and EFCC Act of 2011 are being counted upon by Nigerians to help prosecute corrupt public officials and individuals alike with the help of good standing and neutral law officers/agents.
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THE LOCAL SITUATION TODAY (contd.)
Since the declaration of the ‘War on Corruption’ and enactment of the Corrupt Practices Commission (ICPC) in 2000 and Economic and Financial Crimes Commission (EFCC) in 2003, the determination to bring down corrupt government officials is pressing on.The EFCC, on Tuesday, arrested and arraigned three company directors on eight counts of fraud involving over N700 million from the federal government as subsidy under the Petroleum Support Fund and the case is currently ongoing in the Federal High Court. (Source: www. Efccnigeria.org)
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NEW DEVELOPMENTS
JamesIbori, former governor of Delta state,pleaded guilty to ten counts of money laundering and conspiracy to defraud at Southwark Crown Court London, after years of eluding justice in Nigerian courts since 2007, and was sentenced to 13 years in jail in April 2012. He was estimated to have stolen over $250 million during his reign as governor.Mr. JohnYakubuYusuf, a former Director of the Nigerian Police Pension Office, stood trial in 2012 alongside 8 other civil servants in the illegal diversion of over N40 billion from the Nigeria Police Pension Funds. He recently confessed to have connived with the others to steal the Commission’s N23 billion but to the shock of everyone, was fined a mere N750,000 by the Abuja court trial judge, JusticeAbubakarThalba. (source:www.vanguardngr.com/2013/02/police-pension-fraud)
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RECENT CORRUPTION TRIALS
Trial courts in Nigeria have taken a turn for the worse in plea bargaining criminal trials on corruption cases.The case of Mr. JohnYakubuYusuf in the Police Pensions Scam is an example.Justice KayodeEshohas condemned this practice, stating that it is not only illegal but encourages stealing, and therefore more corruption. In his own words, “..it is corruption to bring plea bargaining into the law of Nigeria”. (source:www.vanguardngr.com – trial of ex-governors)
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PLEA BARGAINING IN CORRUPTION TRIALS: A condoning path?
The FCPA and other foreign anti-corruption agencies need to assist in stopping corrupt foreign business partners from making the situation in Nigeria worse. With every corruption case made against a corrupt Nigerian government official, a corrupt foreigner is charged and convicted as well.The United States Department of Justice on January 18, 2012 announced that a Japanese construction firm, Marubeni Corporation, agreed to pay a $54.6 million criminal penalty for allegedly bribing officials of the Nigerian government to facilitate the award of the $6 billion Liquefied Natural Gas contract in Bonny, Nigeria to a multinational consortium, TSKJ. This is an example of foreign infiltration in the current problem of corruption in Nigeria.This scheme, which involved the payment of bribes to Nigerian government officials between 1995 and 2004, was in violation of FCPA. (Sources:www.punchng.com; www.cov.com–Anti Corruption Mid-Year Review)
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FOREIGN INTERVENTION
The JamesIboriCase is also a good example of foreign intervention. Without the assistance of INTERPOL and the London Metropolitan Police, the former governor would be walking free as our own courts failed to convict him due to lack of proper investigation and possibly more bribery.
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FOREIGN INTERVENTION (CONTD.)
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