Why Obasanjo's war on corruption is faltering

When President Olusegun Obasanjo took office in 1999, ending more than 15 years of corrupt and often brutal military rule, he declared it was the end of "business as usual" with graft.

Corruption, he said, was a cancer that had debilitated the Nigerian state and frustrated development efforts, despite the country's huge oil riches. It was,therefore, an enemy to be fought until it retreated.

The first bill which Obasanjo sent to the national legislature after he took office proposed the creation of new anti-graft body, the Independent Corrupt Practices and Other Related Offences Commission (ICPC).

Corruption watchdog undermined by low funding

When the bill became law a year later, after overcoming resistance by legislators who sought to weaken its provisions, Justice Mustapha Akanbi - a retired president of the Federal Appeal Court - was named to head the new commission.

But four years later, it has yet to secure any significant conviction.

On the contrary, all the signs are that corruption is spreading and that Obasanjo is losing the war he declared on bribes and kickbacks.

Nigeria's rating by the Berlin-based corruption watchdog, Transparency International, has not
improved at all. It remains at the bottom of the table, with only Bangladesh rated as a worse place in which to do business.

"The first tragedy of the commission is that those who set it up are definitely not interested in a comprehensive and credible campaign against corruption in Nigeria," Nkem Jika, a well known newspaper columnist in Nigeria, told IRIN.

"The second tragedy is that in contrast to the lofty mandate it was charged to execute, the commission has been deliberately denied the resources it needs to mount a credible assault against corruption," he added.

Akanbi himself confirmed Jika's contention when he told reporters recently that the ICPC was woefully under-resourced.

No money to investigate complaints

The head of the commission said that his organisation had only been able to investigate 608 of the 1,270 petitions it had received over the past four years - less than half - due to lack of funds.

Only 34 cases had been brought to court, he added.

Akanbi wondered publicly why the government had set up the commission and appointed competent people to run it "only to frustrate it from performing by starving it of funds".

Akanbi explained that another reason why the ICPC had fallen short of public expectations was because the law forbade it from investigating any corrupt practices perpetrated before its creation in June 2000.

This restriction effectively lets off the hook all those who served in successive regimes since the oil boom of the 1970s - especially the military governments of Ibrahim Babangida and Sani Abacha, which ruled Nigeria from 1985 to 1998.

Both regimes are widely believed by Nigerians to have looted the national treasury.

"The law does not permit me to investigate Babangida and other past heads of state, governors or military administrators," Akanbi said.

"The truth of the matter is that even if the commission receives complaints about these people, there is little or nothing the commission could do because it cannot investigate any corrupt practices that occurred before the commission was established," he lamented.

Obasanjo's own ministers charged

All the same, the ICPC stirred some optimism in December last year when it charged three former ministers of Obasanjo's own government, several senior government officials and a key figure in the president's People's Democratic Party (PDP) with receiving bribes totalling over US$1 million.

Map of Nigeria

The defendants were alleged to have received the funds from an agent of the French electronics company, SAGEM, to enable it obtain a US $214 million contract in 2001 to execute Nigeria's national identity card project.

However, the trail which led to the prosecution of former internal affairs ministers Sunday Afolabi and Mahmud Shata, former labour minister Husseini Akwanga, former PDP national secretary Okwesilieze Nwodo and former internal affairs ministry permanent secretary, Turrie Akerele, started from abroad.

According to investigators, security officials at London's Heathrow Airport intercepted Chris Agidi, a former director of the Department of National Civic Registration (in charge of the identity card project) in September last year and found over US $200,000 in cash in his briefcase.

Agidi was subsequently questioned about his suspected links to a terrorist movement, but he revealed under interrogation that the funds came from SAGEM.

This prompted British officials to alert their Nigerian counterparts, leading to the arrest of other suspects in the scandal.

Disclosures made abroad reveal massive bribes

Several other important indicators of the nature and scope of corruption in Nigeria have also come from disclosures made abroad.

Last year U.S. energy services company Halliburton disclosed in filings to the Securities and Exchange Commission that its Kellog, Brown and Root(KBR) subsidiary had paid bribes totalling US$2.5 million to Nigerian officials to obtain a favourable tax assessment.

And an international consortium building a liquified natural gas plant in Nigeria has come under investigation in France for the suspected payment of bribes totalling US$180 million to obtain the construction contract, whose value has grown over time to US$6 billion.

This consortium includes the same Halliburton subsidiary KBR, Technips of France, Snamprogetti of Italy and JGC Corporation of Japan.

Last month Halliburton severed relations with Albert J. Stanley, a former chairman of KBR, alleging he had received improper payments linked to payouts made in connection with the liquified gas plant.

Another Nigerian corruption case came to light in early July when the U.S. Justice Department announced that British and U.S. subsidiaries of the Swiss engineering firm ABB had pleaded guilty to paying US $1million in bribes in exchange for confidential bid information from officials of a Nigerian government agency overseeing oil joint ventures.

The ABB group paid fines and other penalties amounting to over US $30 million.

However, not all foreign businessmen seeking contracts in Nigeria are corrupt.

One curious case that came to light recently concerned a British oil executive who sued his US employer for wrongful dismissal on the grounds that he was sacked for refusing to pay a bribe in Nigeria.

Alan Ferguson brought the case against the oil drilling company Baker Hughes Corp at a court in Houston, Texas. Ferguson alleged that he was fired for refusing to pay bribes to secure a Nigerian contract in 1999. The case was eventually settled out of court in October last year.

According to a survey conducted by Transparency International in 2002, the oil and gas industry ranks third in a list of 17 global industries where multinationals are likely to pay bribes to obtain favourable business deals.

Only the construction and arms industries were cited as being more corrupt.

Since oil is the mainstay of Nigeria's economy, foreign involvement in local corruption scandals is therefore to be expected.

Who is more to blame?

Indeed Information Minister Chukwuemeka Chikelu, contends that foreign companies in Nigeria "are often the instigators and perpetrators of corruption.

Lagos, the economic capital of Nigeria, where many international business deals are struck

"The government has launched investigations into cases of corruption involving foreign companies, while the prosecution of those involved in the SAGEM case is evidence the government recognises no "sacred cows," he said.

However, many Nigerians are not convinced and take a different view.

"If Nigerians are not bribe-takers, nobody can bribe them," Ishola Williams, a retired major general of the Nigerian army and president of the Nigerian chapter of Transparency International, told IRIN.

He took issue with the minister's assertion that foreign companies were largely to blame for high level corruption in Nigeria.

"Our leaders are not fighting corruption because they believe in it, but to look good before the West," Williams said.

During his own career in the army, Williams gained a reputation for being one of the few army generals who spurned opportunities for self-enrichment while serving under various military regimes.

"Even if those ministers were to be convicted, it doesn't scratch the issue beyond the surface," Chima Ubani, executive director of Nigeria's leading human rights group, the Civil Liberties Organisation, told IRIN.

"It is one thing to sacrifice a minister here and there, it is another thing to deal with sacred cows like Babangida who are left alone," he said.

Government fails to investigate allegations

Critics frequently point to the government failure so far to probe allegations by Nasir El-Rufai, the Minister for the Federal Territory of Abuja, that two senators close to Obasanjo, deputy senate president Ibrahim Mantu and majority leader Jonathan Zwingina, asked him for a bribe of 54 million naira (US$418,000) to secure senate approval for his appointment.

El-Rufai only went public with the allegation after he had been duly endorsed by the senate, but the government's failure to invetigate his claims is widely seen as evidence of its lack of commitment to end corruption.

Williams believes that apart from spawning poverty and derailing development, official corruption in Nigeria has created an ethical vacuum throughout society.

The country of 126 million people has gained a worldwide reputation for international crime, particularly drug trafficking and fraud.

The 419 fraud scam

Perhaps the best known variety of fraud associated with Nigeria is the advance fee scam, also named 419 after a section of the country's law forbidding fraud.

The 419 scam features fake business propositions sent by e-mail.

These usually invite the recipient to help transfer large sums of illegitimately obtained money overseas, claim a lottery prize or take up the offer of a juicy contract.

Those who bite the bait are made to pay endless sums of money as front-end fees or commissions to facilitate a deal that doesn't actually exist.

"One of the most serious issues we have in this country is 419 and it is going to be difficult for the world's perception of Nigeria to change unless we eliminate it," said Williams.

The Economic and Financial Crimes Commission (EFCC) set up in 2002 to tackle crimes including fraud and money laundering, appears to have fared better that the ICPC in terms of the number of people arrested for suspected crimes and funds recovered.

Led by police commissioner Nuhu Ribadu, the EFCC has recovered more than 100 billion naira (US$757 million) over the past two years and has arrested more than 500 people for money laundering.

The best-known case being handled by the EFCC is the trial of five people who over a period of six years, persuaded a Brazilian bank to stump up US$242 million for the construction of a non-existant second airport for the federal capital Abuja.

The defendants, who include a housewife, a lawyer and a businessman, are accused of conspiring with a senior employee of Brazil's Banco Noroeste to defraud the bank of this huge sum 1995 and 2001.

"Corruption does not allow our institutions to work"

"We have no problem in this country except corruption," Ribadu said at a recent public lecture. "Corruption does not allow our institutions to work."

One key breakthrough achieved by the commission in its fight against corruption and economic crimes, Ribadu said, was a recent agreement with the European Union that forbids serving politicians and government officials from opening bank accounts in Europe.

This was done on the grounds they "might want to move public funds to Europe to the detriment of (their) nation," he said.

Ribadu believes that success in stamping out corruption in Nigeria will depend on who leads the country after Obasanjo completes his second term of office in 2007. The constitution forbids Obasanjo from serving a third term.

"In Nigeria that office of the president is all and all; if you have an honest man, fine," Ribadu said. "But if we allow a bad man to get there then we are finished. We cannot all be bad. We can reclaim our country back," he added.