Prof. Yemi Osinbajo, SAN
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POSSIBLY THE MAJOR OBSTACLE TO
ECONOMIC GROWTH AND POVERTY
REDUCTION /LIFE EXPECTANCY/
MORTALITIES/ DISEASES
PERVASIVE AND ENDEMIC CORRUPTION
ACCOUNTS SIGNIFICANTLY FOR OBVIOUSLY
POOR POLICY CHOICES
GRAND CORRUPTION / WHITE ELEPHANTS/
BASIC SOCIAL SERVICES
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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 GDP
Using 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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The International Dimension
Since September 11th 2001 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
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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 trafficking
On June 20th 2003, 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 the
Countries not committed to an action plan: high-risk and
non-cooperative.
In Oct 2013 Nigeria 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.
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An anti-money laundering
consortium of 101 nations
Access to other FIUs
 Information sharing and
exchange terrorist funds
tracing, monitoring and freezing
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The Foreign Corrupt Practices Act (FCPA)
◦ The main objective of the FCPA is to prohibit companies and their
employees, officers, directors and agents from paying or promising to pay
bribes to foreign officials, public officials or organisations, 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)
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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)
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PEPS Databases
Politically 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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EXTENDED INTERNATIONAL COOPERATIONDUBAI EXTRADITION
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US FCPA/ UK BRIBERY ACT (slide 5)
UK MONEY LAUNDERING LEGISLATION
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THE ECONOMIC AND FINANCIAL CRIMES COMMISSION ACT
(EFCC)
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THE INDEPENDENT CORRUPTION PRACTICES COMMISSION (ICPC)
ACT
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Money Laundering (Prohibition) Act 2011
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Public Procurement Act of 2007
◦ S.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.
◦ S.57 stipulates 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.
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S.3 of the Freedom of Information Act 2011
provides for compulsory delivery and publication
of information on:
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◦ 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 head
of any government or public institution to falsify or
wilfully destroy any records punishable with1 yr
Imprisonment. (S.11)
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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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Olabode Ibiyinka George, the former Military
Governor of Ondo State, 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 to
Alhaji Eleye to 10 contracts of N100,000 each.
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1. Chief Akande Jamal is the local government
chairman of the Excellent Party in Iperu. Just
before the local government elections in the
State, the following events occur:
◦ He received from Hon. Arobo the 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.
◦ Chief Akande Jamal, in turn sent the sum of N5million to
one of the ward chairmen. The police arrested Rasaki the
Personal Assistant to Chief Akande Jamal for money
laundering and have withheld the sum of N1 Million as
an exhibit.
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Dr. Araba is the Hon. Commissioner for Works. He
started building a house in Lekki before his
appointment to the state`s cabinet. As the house
moved towards completion, Evaristo Italiano, 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.Araba did not ask for the
favour and Evaristo Italiano said it was a
complimentary gesture.
Chief Tony Ewele is 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 but Exco
approved a virement of the sum from a vote of the
Ministry of Environment. Would your answer be different if
there was no Exco approval?
The Chairmen of all the local governments gave a gift of
the sum of N2Million to the Commissioner for Local
Government on his 50th birthday.
The directors in the Ministry Of Local Government decided
that all officers who were willing should wear the Aso-Ebi,
but the sum of N50,000 was to be taken from running
costs to buy the Aso-Ebi for cleaners in the Ministry who
could not afford it.
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A HAZARD OF THE JOB
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PRELIMINARIES-DECLARATIONS
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THE STATEMENT
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CONFESSIONAL STATEMENTS
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INCRIMINATING OTHERS
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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.
Under Mallam Nuhu Ribadu's administration, 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, Mr Tafa Balogun.
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STALLED TRIALS – Trials cannot go one without the
prosecution presenting their witnesses or indicted
criminals. In the Halliburton/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 Money Laundring Act 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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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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James Ibori, 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. John Yakubu Yusuf, 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,
Justice Abubakar Thalba. (source:
www.vanguardngr.com/2013/02/police-pension-fraud)
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Trial courts in Nigeria have taken a turn for the
worse in plea bargaining criminal trials on
corruption cases.
The case of Mr. John Yakubu Yusuf in the Police
Pensions Scam is an example.
Justice Kayode Esho has 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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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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The James Ibori Case 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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