The Halliburton SCANDAL And “Ali Baba” Generals of Nigeria

AliBaba Generals of Nigeria - Abacha, AbdulSalam, ObasanjoDapo Olorunyomi and his team at NEXT Magazine broke tip of the corruption iceberg last sunday by realeasing some of the names of former Nigerian rulers who were alleged culprits in the Halliburton Bribery scandal. Ever since then, Nigerian media has been awashed with the heinous crimes committed against the fatherland by Obasanjo and his acolytes, things are no longer at ease for the people mentioned who are still living (we all know that Abacha, one of the alleged culprits is dead).

We culled the investigative reports from NEXT Magazine for your enlightenment over the global rot in the Nigerian Oil and Gas industry and the culpability of Nigeria’s rulers. Read On.

The Halliburton Bribe Takers

By Dapo Olorunyomi and Musikilu Mojeed
March 29, 2009 12:40PM The Sun – Sunday 29/03/2009

Our so-called leaders are nothing but common bribe takers, according to US investigators who have got to the bottom of the Halliburton scandal.

The fingered personalities include three former presidents; Obasanjo, Abacha,and Abubakar- as well as a who’s who of Nigeria’s political and business elite.

At least three of our former presidents, Sani Abacha, Abdusalami Abubakar, and Olusegun Obasanjo, received millions of dollars in bribes from American and European contractors retained to build Africa’s first liquefied natural gas plant in Bonny, Rivers State, according to US law enforcement officials.

Also enmeshed in the vast and formalized bribery scheme is a long line of ministers, bureaucrats, top politicians, state and local officials and former oil minister Dan Etete, according to American investigators.

This cast of characters, charged with running the affairs of 150 million people in the heart of Africa, received stacks of US dollar bills in briefcases and sometimes in bullion vans.

In other cases they received their payoffs via electronic bank transfers involving such financial institutions as Citibank.

In all, these eminent Nigerians accepted at least N27 billion in bribes from the oil services companies in exchange for billions of dollars in contracts to build our liquefied natural gas plant, US investigators say.

American authorities are now pursuing their own citizens and corporations, notably the oil services company Halliburton, in connection with the scandal.

Halliburton has agreed to pay $579 million in fines and many of its agents face long jail terms.

Our law enforcement authorities, notably Attorney General Michael Aandoaka, have lately been making noises but have in reality done little to pursue those indicted in this scandal, which reveals us as a nation that fully justifies its reputation as one of the world’s leading cesspits for corruption and unrestrained graft.

How it all started

The origin of the Nigerian Liquified scandal can be traced back to 1994, when bids were submitted to build Africa’s first liquefied natural gas plant in Bonny, Rivers State, at a cost of $6 billion.

A joint venture company, TSKJ, formed in equal partnership between a French engineering company, Technip; an Italian engineering company, Snamprogetti; a US engineering company, KBR, of the Halliburton group; and the Japanese engineering and construction company, JGC, amplified corruption in Nigeria to unprecedented levels.

Soon after TSKJ was formed, it set up three companies registered in Madeira, Portugal to recruit two “consulting companies,” Tri-Star Investment Ltd, and Marubeni Inc, with the mandate to bribe Nigerian “officials of the executive branch of government, NNPC and NLNG officials, and political party leaders,” according to a sealed indictment filed at the United States District Court in Houston, Texas.

Three early decisions taken by TSKJ were: hiring a British lawyer, Jeffery Tesler, to coordinate the affairs of TriStar; signing up Wojciech Chodan, an American deal maker resident in the UK to assist him and contracting Messrs Matsuda, Endo, and Lida to run Marubeni.

According to the court deposition of Mr.Tesler, in a clinical application of the principles of division of labour,TSKJ mandated the Tri-Star team, which it disingenuously called “cultural advisors,” to focus only on bribing the “senior level officials”, while the Marubeni team was instructed to restrict itself to bribing the “lower level Nigerian officials.”

Thus while Tristar was incorporated in Gibraltar and had a budget of $130 million; Marubeni, incorporated in Japan, had a budget of $50 million.

Our investigations in the United States, France, the UK and in Nigeria spanned a three week period and were based on court indictments, depositions and interviews.

Bribery in a customary manner

Sani Abacha, Nigeria’s late Head of State, was the first significant point of contact for the TSKJ team, according to lawyers of the United States department of justice, who claimed in court depositions that, in August 1994, the CEO of KBR, Albert Jackson Stanley, and top executives of TSKJ struck an agreement with Abacha “to do business in a customary manner.”

Towards this end, a “cultural committee” of the sales and senior personnel officers of the four joint venture companies, as well as agents of Marubeni was put together to “consider how to implement, but hide, the scheme to pay bribes” to Nigerian officials.

The “cultural committee” in October 1994 worked out a programme of what it called “the downloading and offloading of payments through subcontractors and vendors.”

According to the U. S. Department of Justice, once a plan of how to distribute the bribes and a scheme to evade US bank monitors were resolved, the “cultural committee” gave Mr. Tesler the green light to meet the then petroleum minister, Dan Etete, to discuss and agree on the modalities.

This meeting held on November 02 1994, when Mr. Tesler handed Mr. Etete the bribe schema to secure Train 1 and Train 2 of the Liquified Natural Gas (LNG) contract.

It was made clear that $60 million was available to be shared. Out of this, $40 million would go to Mr. Abacha, while others would have to scramble for the remaining $20million.

A cultural committee to manage the graft

Keeping faith with the grand plan of the cultural committee, Mr. Stanley, the CEO of KBR, who was handpicked for this job by former U.S.Vice President Dick Cheney, rushed to Abuja three weeks after the November 2 meeting , to confirm if Mr. Abacha was comfortable with Tesler as a go-between.

Once this was understood on both sides, a series of decisions was made ahead of the signing of the Train 1 and Train 2 contracts.

In January 1995, Chodan and Stanley agreed to exclude any US citizens from participating in the bribe scheme. In March of the same year, TSKJ formally signed the $60 million contract with TriStar.

Furthermore, in December, TSKJ paid TriStar $1.5 million as commission for its “services,” and in April 1996, TSKJ formally signed a $29 million contract with Marubeni to settle the “lower level Nigerian officials.”

According to filings in the Houston District court, by the time the Train 1 and Train 2 contracts had been signed, Mr.Tesler himself wired $63,000 into a Swiss account of Mr.Etete.

French police prosecutors have determined that around the same time, in order to cover up his tracks, he also opened negotiations with Etete to purchase five per cent of the then minister’s holding in the OPL 245 Malibu oil block.

For this deal, Mr.Tesler wired a total of $2.5 million into the accounts of the former minister through the TriStar accounts.

Mr. Etete used three different names, according to the deposition, his personal name or Buzaki Etete, or one Omoni Amafegha, who Mr.Tesler told the French Court was a listed name on the board of Malibu.

Dele Adesina, a Senior Advocate of Nigeria and Mr. Etete’s lawyer in respect of the Malabu oil block licence which the Obasanjo administration revoked in 1999, would not comment on this matter when asked.

He said: “I was only retained with respect of the revocation of the Malabu block; I have absolutely no knowledge of Mr.Tesler.”

Mr. Tesler’s brief was to make sure things moved smoothly. A key challenge at this point was unfettered access to Mr. Abacha at that time, and as he told French investigators, the man who made this possible was the former Inspector General of Police, M. D. Yusuf, who later became Chairman of the NLNG.

Mr.Tesler claimed he “downloaded $75,000 in two installments” into Mr.Yusuf’s pocket for this purpose. Information on the former policeman’s involvement in the TSKJ scandal, is not new.

In 2004, when a House of Representatives Committee headed by Chudi Offodile investigated the NLNG contract, it found out that Mr. Yusuf as NLNG chairman acted improperly in favour of TSKJ.

Petroleum minister at the time, Don Etiebet, had sought to ensure fair play in the contract bid between TSKJ, and the only other competitor, BCSA.

It “appeared that a decision had been taken even before the Board meeting of 24th Sept. 1994” that determined the contract, the Offodile report stated.

What happened after Trains 1 and 2

Having put the Train 1 and 2 contracts in the can, TSKJ turned its gaze on the Train 3 contract. For this, Stanley flew to Abuja again in the second quarter of 1997, with the sole mission of asking Mr.Abacha to recommend a trusted front man to collect his bribe.

Shortly after he died on June 8, 1998, Mr.Tesler promptly erased him from the list of bribe beneficiaries, substituting him with the new helmsman, Abdulsalami Abubakar.

To keep the entire scheme on the rails, Stanley flew back to Abuja on February 28 1999, asking Mr. Abubakar, to recommend a trusted front man to collect his bribe.

Anxiety about the election

With an election already fixed for May 1999, TSKJ was anxious to wrap up the Train 3 contract before a change of power in Abuja.

Another meeting was held in London on March 05 1999, to come up with a strategy to achieve this objective.

One week after, TSKJ won the Train 3 contract for $1.2 billion. On March 18, 1999, TSKJ paid a kickback of $32.5 million into TriStar’s account, to bribe the Nigerian officials who facilitated the award of the contract.

Even though the lower class officials were eventually catered for in the bribe scheme, they always got the short end of the stick.

Thus, while the senior Nigerian officials had their bribes promptly paid, it took one year after TSKJ had signed the Train 3 contract before Marubeni lined the pockets of the lower class officials.

Computing the pay-offs up to January 2001, American prosecutors believe that a $2.5 million bribe was “off loaded” directly to the Swiss account of Mr. Abubakar’s frontman.

For four days last week, NEXT sought unsuccessfully, through his media consultant, to reach the former Head of State, sending him details of the court indictments but he declined to comment.

After the transition to civil rule in 1999, the United States Department of Justice attorneys stated that Mr.Stanley met with the new President, Olusegun Obasanjo and the then Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Gauis Obaseki, in Abuja on November 11, 2001, to designate “a representative with whom the joint venture [TSKJ] should negotiate the [obligatory] bribes in support of the award of the [forthcoming] Trains 4 and 5 contracts.”

One month later, on December 20 in London, Mr. Obaseki met Mr. Chodan and Mr.Stanley over lunch, to discuss the details of the Trains 4 and 5 contracts.

On Christmas Eve, TSKJ signed a $51 million deal with TriStar, to bribe Nigerian officials for the Trains 4 and 5 contracts.

Three months later, in March 2002, TSKJ won the Train 4 and 5 contract for $3.6 billion. Mr. Obaseki declined to respond to these charges when NEXT spoke to him on the phone.

He appeared to be more disturbed about how we got his phone numbers. “I am sorry I have no response to give” he said.

Mr. Obaseki’s email address and phone numbers are all listed on his own personal website. We also could not reach former president Obasanjo, for his comment on the bribe claims by Mr.Tesler.

Taking care of the political big boys Following the signing of contracts for Trains 4 and 5, all seemed to be going well between the new administration and TSKJ.

June 2002 would turn out to be a significant month in this narrative of sleaze between TSKJ and Nigerian government officials.

That month, TSKJ signed another $25 million contract with Marubeni to settle the bribes of the low cadre officials for the Trains 4 and 5 of the NLNG project.

It also signed a $23 million contract with TriStar to bribe the top officials for the Train 6 project.

However, Mr.Obaseki’s meeting with Mr.Tesler in London represented an important turning point in the scandal.

The former NNPC’s GMD’s message to the meeting, according to Mr. Tesler’s indictment papers, was that the time had come to bring in the political boys.

Apparently the Peoples Democratic Party gods needed to be appeased.

Indictment records from both the Department of Justice (DOJ) and the Security and Exchange Commission (SEC) of the United States attorneys showed that in August 2002, Mr. Tesler wired $5 million to the account of a Port Harcourt based sub-contractor named Intels Energy Limited.

The money was received in the company’s account with Citibank Nigeria.

Former Vice-President Atiku Abubakar and the late Shehu Musa Yar Adua are alleged to have substantial interests in Intels Energy Limited.

NEXT made repeated but unsuccessful attempts to speak to Intels officials on the phone.

A letter delivered to their Ikoyi, Lagos office asking for their response to this allegation is still unanswered .

A Mr. Joseph who was in the office said , “How did you people even get this information, ” adding that the letter must be forwarded to Intels Port Harocurt office.

Intels, according to our investigations, was the key sub contractor for Marubeni in bribing the lower level officials of the NNPC and NLNG.

Bullion van bribery

Both the Department of Justice and the Security and Exchange Commission’s attorneys, corroborated each other’s claim that $1million in $100 bills was deposited “to the NNPC official” at the NICON Hilton Hotel in a “pilot’s briefcase” for onward delivery to the PDP before the 2003 general elections.

The remaining $4 million was, according to the court filings, delivered in naira in a bul-lion van.

Audu Ogbe who was the PDP chairman at the time denied any knowledge of this and loudly called for an investigation.

A spokesman for Vincent Ogbulafor, the current chairman, said in Abuja last week that Ogboluafor also discounted this claim.

Phenomenal greed and sleaze

The planning, the scale and the sophistication of TSKJ’s web of corruption and its capacity to ensnare three successive heads of state, coupled with the elaborate scheme to set up corrupting agencies for lower and senior officials, stands out in the annals of official corruption in Nigeria.

The ruling class was identified and broken down into its constituent parts: political, bureaucratic, and technocratic so as to isolate the beneficiaries of the graft.

TSKJ came fully prepared and well primed to sustaining this code named scheme over the decade it would take to come to fruition.

The multijurisdictional impact of the corruption is still unprecedented in Nigeria.

Keeping mute

Attorneys for TSKJ, KBR, and Halliburton in Nigeria, Templars Law Offices on Victoria Island, Lagos declined to answer questions about the conduct of their clients, saying “we cannot make any comment on TSKJ because they are no longer our clients.”

Yet, Templars maintains a relationship with both TSKJ and Halliburton on its website.

It indeed claims to maintain a “recent relationship, ” regarding multi-jurisdictiona l investigations in Nigeria, Switzerland, France, and the UK.

An office spokesperson declined to comment on when Templars severed its relationships with TSKJ and Halliburton.

But he was emphatic that the principal partner, Oghogho Akpata, who is the office lead on the TSKJ/KBR/Halliburton brief, would not be available for comments.

Investigating KBR

KBR or its principal officers are facing investigation and prosecution in at least five countries today.

Officers from Britain’s Serious Fraud Office(SFO), arrested Mr. Tesler, now 60, at his offices in Tottenham, London, on March 05.

He is to be extradited to the USA to face further questioning by the Department of Justice.

Also arrested with Mr.Tesler was Mr.Chodan, 71, who as an agent for Halliburton, wrote detailed diaries, describing meetings with the bribe consortium and representatives of the international oil companies.

From the United Kingdom, Britain’s Serious Fraud Office confirmed that there is an on-going investigation into the allegations of bribery and corruption against British businesses in Nigeria.

Since 2004, the Economic and Financial Crimes Commission has been investigating the conduct of Halliburton/KBR.

The investigation is ongoing, according to sources in Abuja.

Recently, the Swiss Justice department followed the steps of the Police Judiciare of France, which in 2003, started an investigation which revealed fraudulent Halliburton payments to Jeffery Tesler.

In their home country, the United States, KBR and Halliburton admitted last month to violations of the Foreign Corrupt Practices Act, by engaging in a decade-long bribing scheme to secure contracts in Nigeria.

The companies also agreed to pay a combined fine of $579 million to settle criminal and civil charges brought by both the United States Securities and Exchange Commission (SEC), and the United States Department of Justice (DOJ) for violation of the Foreign Corrupt Practices Act (FCPA).

The indictment of Mr.Tesler and Mr.Chodan, in all likelihood, will also open a floodgate of other suits.

This month the president gave full backing to the Attorney General, Michael Aondoakaa, to again investigate Halliburton for tarnishing the image of the country by bribing its officials.

Mr. Aaondoaka has assembled a team of local lawyers and briefed American-based financial crimes experts, to institute a suit against KBR and Halliburton for soiling the name of the country through the bribery schemes.

Also last Tuesday, the Nigerian Senate called on the Federal Government to identify the Nigerians involved and proceed to prosecute them.

Smart Adeyemi,one of the eight senators who sponsored the Bill said “the matter is so huge it can erase the prestige of the Senate and indeed of the Nigerian government to be legitimate, if this is swept under the carpet.”

The chairman of the House of Representatives Committee on Anti-corruption, Sabo Nakudu, also takes the position that the allegations deserve “serious investigation” , although he was worried that “we haven’t got any petition in that regard and no report has been sent to us.

We just read about the thing in the newspapers. Unless we are able to come across some documentation to look at that kind of issue, there is nothing we can do.

We are just reading all these information in the newspapers like anybody else.”

In the 2003-2007 House of Representatives, when Chudi Offodile, as chairman of the House committee on pubic petitions, investigated the Halliburton scandal, he said he repeatedly ran into a brick wall.

The Offodile committee, however, recommended that all companies in the TSKJ consortium, as well as Halliburton be excluded from future contracts in the country.

The House sitting of September 2004, approved the committee’s recommendations.

In his response to the current phase of the scandal, Mr.Offodile, in a pained response, lamented how the NNPC and the Federal Government subverted all the best intensions of the legislature.

In spite of the legislators recommendations, NNPC went ahead to give KBR the contract to build the “topsides of the FPSO for Agbami Deep offshore field, owned by NNPC, Chevron-Texaco Petrobras and Statoil… [and that the] same KBR formed a Joint Venture with Snamprogetti, and JGC, all three Companies were members of the notorious TSKJ consortium and still won a $1.7Billion EPC contract to build the Escravos Gas to Liquids Project, owned by the NNPC and Chevron-Texaco, ” said Mr. Offodile.

He recounted a meeting in June 2005 when he accompanied then House Speaker Aminu Bello and Deputy Speaker Austin Opara, to brief President Obasanjo on the true situation of the Halliburton/ KBR.

“We were all seated at the President’s conference room, the Halliburton team led by Mr. Andy Lane, the Chief Operating Officer, the NNPC team, led by the Group managing Director, Funsho Kupolokun,” a few minutes later, one of the presidency staff walked up to the Deputy Speaker and informed him that I would not be part of the meeting.”

Offodile said adding that he was thrown out of the meeting. He described the situation as frustrating and painful because “once again, the Halliburton enforcers had their way.”

It appears that Mr. Aoandoaka, who reportedly travelled to London and Washington last week also has an eye on the civil forfeiture processes for some of the monies and investments derived from the bribes.

Officials at the Serious Fraud Office in London declined comments on Mr. Aoandoaka’s statement, saying investigations are still going on.

NEXT can however authoritatively confirm, that no mutual legal assistant requests have yet been filed from the Attorney General’s office to give substance to his stated desire.

Sources working in UK and US law enforcement agencies told NEXT the attorney general’s request for support on the Wilbros case has not been honoured due to a perception of official stalling and stonewalling on the part of Nigerian anti-corruption and law enforcement agencies.

Local attorney’s reviewing Aoandoaka’s strategy say it is self serving and funny.

“It is empty braggadocio couched in legal phraseology, ” says Jiti Ogunye, a lawyer on Aoandoaka’s strategy.

“When you say you are going to sue a company for damaging the image of a country, you are speaking in the realm of libel. A country is a subject in international law, I’m not aware of a situation in which a country as an entity sues an individual or another country for libel. I think his statement should just be dismissed.”

But Carol Ajie, another lawyer thinks that Aondoaka’s pursuit of Haliburton might be “in order to compel Haliburton to disclose the names of bribe takers since the giver and taker of bribes are both guilty.”