Thursday, December 28, 2006

Nigerian Fuel Pipeline Explosions – Cost of Kleptocracy.

Fuel shortage in Nigeria is perennial, at least since the mid-1980s. With a runaway population growth, increased vehicular traffic and grossly inadequate electricity generation and supply, the demand for petroleum products far outstrips supply. Most of the petroleum products are regulated, refined and marketed by the Ministry of Petroleum Resources and the Nigerian National Petroleum Corporation (NNPC) owned facilities. These facilities, wholly owned by the Government, are managed by a band of mediocre and corrupt bureaucrats. They are run down and consistently operate far below capacity, leading to the perennial shortages suffered in the country.

It has been alleged that apart from acts of frank graft, the bureaucrats that run these facilities deliberately mismanage and neglect maintenance of these production and distribution facilities as a means of creating artificial scarcities so that their cronies, associates and front corporations would be awarded lucrative contracts to import the scarce products, a process initially instituted to bridge the supply gap that would ensue when these facilities are temporarily shut down for maintenance.

Then there are those criminal gangs, who break the pipes to steal petroleum products for sale in the black market. The Movement for the Emancipation of the Niger Delta (MEND) is alleged to have started off like this before graduating to crude oil bunkering, piracy and kidnapping. These illegal bunkerers, whose operations sometimes include highly placed government civil service and military officials are usually well organized with elaborate distribution systems and sophisticated arms to fight off law enforcement agents as they perpetrate the crime. These criminals leave in their wake busted pipes that leak fuel into the ecosystem constituting various environmental and safety hazards. Often, these abandoned busted pipes become pots of gold to the local community, when they easily accessible. Rather than report the hazard to the police and concerned authorities, these locals scurry to siphon as much fuel as they can to sell in the black market. Using Jerry cans and all sorts of improvised vessels, these locals besiege the hazardous breached pipes, often in frenzied fractious droves that break out in frequent bouts of fisticuffs and eventually ending in a catastrophe.

What happened at Abule Egba/Awori, Lagos on December 26, 2006 is rather tragic. Some have said the victims brought it on themselves, since clearly, they were stealing from the ruptured pipes. But really it is not as simple as that. With an existing petroleum product shortage, a large army of largely unenlightened, unemployed, poor and desperate citizens, the ruptured pipe gushing precious fuel must have been very tempting, despite the dangers involved in "getting a piece of the action." It was reported that the pipe had been broken at least three days earlier by some illegal bunkerers, who had only abandoned the scene hours before the explosion.

It bugles the mind that all through out the three days the thieves were in control of the broken pipe, none of the locals reported the case to the police. Perhaps someone did, but as is characteristic of the police, they did not respond, perhaps for fear of being out-gunned by the bunkerers. Or, it may be that the police was even in complicity with the criminals, hence their non-show during the three-day operation. Also, is it possible that the NNPC, to which the pipes belong, did not detect the breached pipe on time? This is hard to believe, since all it will take to detect this is a vigilant human monitor to notice the discrepancy between the volumes pumped and received. Besides, the pipelines are purportedly rigged with electronic pressure monitoring systems that automatically trigger off when the pipelines are tampered with or have a break. This would have been set off as soon as the bunkerers struck were it working as it should.

The Nigerian citizenry needs to resolve to stanch this dangerous trend. More than 2000 have died as a result of this illegal activity alone within the past few years. Nigerians need to demand better policing and maintenance of petroleum facilities. They need to stop colluding with illegal fuel bunkerers and criminals, and report suspicious activities to law enforcement authorities. Of course, the government on its own part needs to address the issue of unemployment and poverty, and the issue of inadequate training and equipment of the law enforcement agencies. Perhaps the way to go with the perennial fuel shortages is complete privatization of the production and distribution facilities, with the government fully divesting its commercial interests in the industry, providing only regulatory and monitoring services through its agencies.

Dec 2006: At least 280 killed in Lagos

May 2006: At least 150 killed in Lagos

Dec 2004: At least 20 killed in Lagos
Sept 2004: At least 60 killed in Lagos

June 2003: At least 105 killed in Abia State
Jul 2000: At least 300 killed in Warri
Mar 2000: At least 50 killed in Abia State
Oct 1998: At least 1,000 killed in Jesse, Delta State

Sunday, December 24, 2006

Atiku’s Self-Inflicted Coup de Grace

The Atiku adoption by AC and at least ten other political parties as their presidential candidate in the April 2007 general elections and his eventual expulsion from the PDP and a declaration of the vacancy of the Vice Presidency by President Obasanjo has finally brought the Obasanjo/Atiku feud to a crescendo. Citing the 1999 constitution as its locus, the PDP National Executive Committee made the demand of Obasanjo yesterday to appoint a new VP to replace Atiku. Let’s examine Section 142 of the Nigerian constitution, on which the Atiku replacement is being hitched, as quoted below: -

“142. (1) In any election to which the foregoing provisions of this Part of this Chapter relate, a candidate for an election to the office of President shall not be deemed to be validly nominated unless he nominates another candidate as his associate from the same political party for his running for the office of President, who is to occupy the office of Vice-President and that candidate shall be deemed to have been duly elected to the office of Vice-President if the candidate for an election to the office of President who nominated him as such associate is duly elected as President in accordance with the provisions aforesaid.
(2) The provisions of this Part of this Chapter relating to qualification for election, tenure of office, disqualification, declaration of assets and liabilities and oaths of President shall apply in relation to the office of Vice-President as if references to President were references to Vice-President.”

The full text of the entire 1999 constitution may be downloaded at the following link: - for your thorough perusal. It appears that this section quoted above provides for the conditions for election to office and is silent on what would entail in the event that a serving Vice President cross carpets. Going further to read sections 143 and 144 of the 1999 constitution, which provide for the removal of the Vice president, there is also no reference to what happens in the event that a serving VP defects to another party, or the role of his political party in the removal of the VP. It however lays down a process where at least 1/3 of the members of the National Assembly would have to submit in writing to the President of the Senate, allegations of gross misconduct (with specific details) against the VP and the subsequent institution of a seven-man investigative panel by the Chief Justice of the Federation
to probe the allegation sequent upon a motion passed by at least 2/3 majority of both houses of the National Assembly. The findings of this seven-man investigative panel would form the basis of impeachment.

It should not be difficult for the Obasanjo controlled PDP, which controls majority of both houses of Assembly to achieve the impeachment of Atiku, should it degenerate into a long drawn out constitutional battle. Putting the antecedents in perspective, this is probably what will happen. Atiku is highly unlikely to resign, given that he is under investigation by the Economic and Financial Crimes Commission (EFCC), and would lose the immunity protection conferred on him according to section 308 of the 1999 constitution by virtue of his position as VP. The New Year would probably find Atiku sojourning abroad to wait out his imminent impeachment. Should the PDP controlled house succeed in impeaching Atiku, we can be sure of him electing not to return to Nigeria, automatically abandoning his presidential ambition, in a bid to escape arraignment by the EFCC for the gross acts of fraud of which he is being accused. Atiku has finally dealt himself the coup de grace. As it stands now, the Atiku presidential candidacy is a lame duck, nothing more than wishful thinking and self-delusion by members of AC and the ten or so other parties that have nominated the embattled VP to bear their flag.

If Atiku does decide to return home, it would most likely be upon securing a court injunction against his putative removal by President Obasanjo. Again, the battle will be shifted to the floors of the House of Assembly and Senate, where both men will bring out the biggest guns yet in their respective arsenals. In the end, it is more likely that President Obasanjo will prevail, sequent upon which Atiku would most likely disappear in the manner of Dariye so as to escape prosecution by the EFCC. It is hoped that this business would pass swiftly and cleanly (even though I have strong doubts) so as not to distract from other salient issues in the Nigerian polity.

Thursday, December 21, 2006

Atiku Bags AC's Presidential Ticket and Ten Others'

Democracy is a great thing. All that matters in a democracy is the will of the people, right or wrong. So long as the majority or their representatives vote on an issue, the principles of democracy dictate that the will of the people be done. Atiku’s nomination by Action Congress (AC) and ten other less influential parties as their presidential ticket bearer for the April, 2007 general elections is a testament to democracy, that is if the process of his nomination was democratic. From all indications, it appears to be, and is an expression of the parties’ protest to the ostracization of the Vice President from his original party, the Peoples Democratic Party (PDP).

AC’s nomination of the VP is a strategic ploy to win over a disgruntled, but considerably powerful political clique ostracized from the PDP as a fall out of in fighting within the ranks of the PDP echelon. Atiku leads this group, which includes people like former PDP chairman, Sunday Awoniyi amongst others. AC, which essentially has no political clout outside of the Nigerian southwest hopes to extend its clout to the constituencies in other regions of Nigeria from which these disgruntled ex-PDP bigwigs come. The adoption of Atiku by the other ten political parties of lesser influence should consolidate AC’s clout even more.

How the PDP would react to the adoption of Atiku by the rival political parties is unclear. One thing however is certain. Having accepted his adoption by these rival parties, Atiku has effectively resigned his membership of the PDP. It is also not clear if this means he ceases to be Vice President, it is unlikely though, particularly since he is under investigation by the Economic and Financial Crimes Commission (EFCC), and as long as he is VP is protected from prosecution as a result of the immunity conferred on him by the office. As at the time of posting this blog, it was reported that President Obasanjo had ordered that the VP not be availed the use of any of the jets in the presidential fleet for his political campaigns.

The Obasanjo/Atiku duo is probably one of the worst relationships between a president and his vice in history. While the one does not want to fire the other because he does not want to appear too high-handed and vindictive, the other does not want to resign so as not to appear weak, and lose the immunity from prosecution that his office confers. The next few weeks should be interesting as we watch the battle between these two play out.

Wednesday, December 20, 2006

Obasanjo/Atiku PTDF Recriminations – Breakdown of the “Chop I Chop” Code

There is often a code of silence amongst criminals. With the Mafia, it is “Omerta”, with the Yakuza, it is the “Jingi.” Usually, these codes of conduct hold these criminal organizations together and are essential for the achievement of their nefarious objectives. When members of these organizations run afoul of these codes, the repercussions are often dire; in some cases, fatal. With the Mafioso, it could range from slap-on-the-wrist measures such as demotion to a lower rank, to the more severe like gruesome torture or execution, depending on the severity of the transgression. The Japanese Yakuza, which operates much like the Italian Mafia, also has in addition to gruesome torture and execution, a punitive measure called “Yubitsume,” where the transgressor cuts off the tip of his pinky finger as an act of contrition.

Amongst Nigerian politicians (essentially gangsters in flowing robes), such a code of conduct exists – the “chop I chop” code. Like in the Mafia and Yakuza, every once in a while, this code of conduct breaks down. Atiku it seems broke this code when he challenged the third term bid of Obasanjo. His “Yubitsume” for this transgression was expulsion from the PDP and public humiliation for embezzlement (albeit it seems, a founded allegation). The sensational pronouncements of the Vice President, Abubakar Atiku, regarding his role in the Petroleum Technology Development Fund (PTDF), and how the fund was administered attests to this breakdown of the ‘chop I chop” code. In a fashion reminiscent of the testimony of Sammy “The Bull” Gravano, turncoat underboss of the notorious Gambino crime family of New York that saw the downfall of the Teflon Don, John Gotti, godfather of the Gambino crime family, Atiku sang like a bird to the ad-hoc senate committee.

His exposé revealed how the PTDF was used as a slush fund to reward party loyalists and fund various illicit business deals by the echelon of the PDP and their cronies. Particularly disturbing were his revelation of (a) payment of N250 million in spurious legal fees to the chambers of Afe Babalola for incorporation services of a company, Galaxy Backbone, allegedly floated by OBJ and cronies, (b) millions of naira in retainership fees still being paid to the chambers of the new National Security Adviser, Muktar, and (c) the quid pro quo transfer of funds, designated "loan" to the United Bank of Africa (UBA) in exchange for a personal loan of N200 million advanced to Obasanjo for the purchase of shares in Transcorp, on whose board the UBA Managing Director sits. Atiku however was conveniently silent on his complicity in the Globacom and IGate deals for which he is accused of embezzlement of PTDF monies to fund. If the VP's allegations are true, and chances are that a substantial part of it is true (Obasanjo himself has admitted to having held shares in Transcorp), then it is pertinent on the Senate Committee to set up an investigation to verify the claims of the VP and from there institute legal proceedings against Atiku, Obasanjo and anyone who is found to be involved, or is a beneficiary of the shameless illicit scheme, and that includes the Afe Babalola chambers, Galaxy Backbone, Globacom, UBA, ETB, TIB, IGate, Marine Float etc.

The chance that this will happen though is rather slim. Just as with the Yakuza, the Mafia and other criminal organizations, the downfall of an old cabal often presages the dawn of a new one. If however Nuhu Ribadu would borrow a leaf from Elliot Spitzer, the fearless New York state Attorney General (now Governor elect), who is credited with the downfall of the Gambino crime family, perhaps Nigeria would have a glimmer of hope.

Monday, December 18, 2006

Yar Adua Picks Jonathan to Pacify Niger Delta

The reason adduced to the surprise selection of the Bayelsa State Governor, Dr Goodluck Jonathan as running mate to the PDP presidential candidate is to pacify the Niger Delta folk, who have been contending issues ranging from resource control to environmental degradation. The echelon of the PDP figures that its chances of winning the 2007 presidential elections would only be improved with an Ijaw native on the presidential ticket as VP. The Ijaw, reputed to be the 4th largest ethnic group in Nigeria have been in the forefront of the contentious, often violent, issues of resource control and environmental degradation.

Only two weeks ago, leaders of the notorious Movement for the Emancipation of the Niger Delta (MEND) had lent their support to Buba Marwa, former military governor of Lagos state in his bid for the PDP presidential ticket. At the time, Jonathan was not on the radar for consideration in the presidential race and so was a non-issue. Now that he has been picked by Yar Adua, and Marwa has lost the PDP presidential ticket, it is unsure how MEND and indeed the entire Niger Delta will take it. Speculations had been rife of Cross River state governor, Donald Duke or his Rivers state counterpart, Peter Odili winning the VP slot after the PDP convention last Saturday, alas both contenders were disappointed.

It is understandable that Odili did not get the nomination, given the ongoing investigation into allegations of financial impropriety leveled against his government. Duke, on the other hand has been hailed severally as Mr. Clean and for various accomplishments of his government. This leads to the question of whether Jonathan is not being rewarded for the insurgencies playing out in the Niger Delta mainly by the Ijaw? (Never mind that his wife is under investigation by the EFCC for money laundering, a story for another forum) If this is the case, then it is a dangerous precedent that might encourage other aggrieved ethnic groups to take up arms to further their causes.

If one thinks about it, perhaps this precedent had already earlier been set long before the Obasanjo regime came into power. It was the Yorubas who were most vociferous about the lost mandate of June 12, 1993 denying Abiola, a Yoruba native from ascension to the presidency by the military juntas of Babangida and Abacha. With the auspicious demise of the evil Abacha and Abiola in 1998, pundits agree that the Obasanjo candidacy was a consensus to pacify the Yorubas for the lost mandate of Abiola. If this is the case then we might soon see a resurgence of the Biafra movement of the Igbos over the next few years should they not produce the president (an extremely high improbability) come 2007. Igbo jingoists like Ojukwu, Kalu, Uwazurike and Nzeribe should be watched.

The remaining 200-plus odd minority ethnic groups can only watch this ethnocentric regional politics play out as they decipher with which of the major ethnic groups to pitch their tents to maximize their benefits. The challenge for the new president after May 27, 2007 will be how to manage this rambunctious, party-pied, ethnocentric polity for order while maintaining a fair balance of justice and equity for the various interest groups that make up the complexity that is Nigeria.

Nigeria’s Own Enrons

It is time for the Economic and Financial Crimes Commission (EFCC) to cast its net on the Nigerian corporate world. The recent restatements and financial impropriety in Cadbury Nigeria Plc. is only but a tip of the iceberg of what entails in many publicly quoted Nigerian companies. In the late 1990s, the Nigerian economy witnessed a spate of failed banks and financial institutions as a result of gross mismanagement and frank acts of fraud by key management staff, including a sitting and past president of the Nigerian Institute of Bankers (NIB), the highest standard setting body of banking in Nigeria.

Many of those indicted were arrested by the Federal Investigation and Intelligence Bureau (FIIB) and were held at the Alagbon Close headquarters of the agency. But as is characteristic of Nigerian law enforcement, many of the indicted soon found themselves off the hook for a combination of reasons including muddled up investigation, bribery, intimidation, influence peddling and sheer incompetence of the prosecution teams. By May 1999, when the Obasanjo administration came into power there was hardly any indicted manager of the failed banks under investigation despite the fact that several tens of thousands of Nigerians had lost huge fortunes in the failed banks.

The manufacturing industry had its own spate of mismanagement too, which led to many of the multinational firms and foreign partners divesting their interests in Nigeria. The roster of the multinationals that divested their interests includes – Pfizer, Aventis, GlaxoWellcome and SmithKline Beecham (now merged as GlaxoSmithKline), Hoescht, P&G etc. Some companies did not divest their interests; instead they fired erring key officers. Lever Brothers for instance fired the late Rufus Giwa, then president of the Manufacturers Association of Nigeria (MAN) for fraudulent restatements and fiduciary impropriety. It was nauseating to see a man so indicted lead MAN for several more years while at the same time sitting on the board of the notoriously mismanaged Petroleum Trust Fund (PTF) of the Abacha years.

Another case is that of one time acclaimed whiz-kid and CEO of the United Bank of Africa, Bello Giwa-Osagie, who is reputed to have gotten a golden handshake of about $100 million for his quiet withdrawal from the Bank after charges of fiduciary impropriety were leveled against him. Giwa-Osagie was succeeded by another pretender to the whiz-kid epithet, Tony Elumelu, who also sits on the board of the mega-company, Transcorp. Many have forgotten Mr. Elumelu’s role in the Umana E. Umana pyramid finance scheme of the early 1990s when thousands of Nigerians lost their life savings to the scam. Elumelu was the branch manager of All States Bank in Port Harcourt where the scammer, Umana banked his loot.

Elumelu from this unscathed and went on to found the now defunct Standard Trust Bank, which was the undisputed king of round-tripping, a fraudulent scheme where the bank formed thousands of fictitious corporations and used them to request for foreign exchange allocation from the Central Bank of Nigeria (CBN) and then turn round to sell these allocations in the black market for a premium. All Elumelu and his cohort got for this illegal activity was a slap on the wrist and a few months' suspension from participating in the foreign exchange bids, rather than the arrest, revocation of banking license and jail terms that they deserve, considering the grievous harm round-tripping did to the value of the Naira and the Nigerian economy. Now Tony Elumelu is rewarded with a sit on the Transcorp board and, in a perverse way, regarded as some sort of corporate hero.

Without repercussion for their actions corporate executives will continue to perpetrate acts of fraud with impunity. The EFCC should take a look at the Nigerian Securities and Exchange Commission, the CBN and other agencies that are supposed to police these publicly quoted companies and bring any erring agent or corporate manager to book to show they are not only after financial criminals in government and international scam artists but corporate criminals and all other types of financial criminals alike.

Tuesday, December 12, 2006

Babangida Finally Gets the Message

Over the past year, as soon as it became clear that President Obasanjo would not be getting a third term, the Nigerian media has been rife with speculations that former head of state, General Ibrahim Badamosi Babangida (IBB) would be contesting in the 2007 presidential elections. Many professional political opportunists and hangers-on began jostling and honing their talons in anticipation of this. Unsolicited support for the former leader poured in from all corners of Nigeria in the bid of these political jobbers to secure positions of influence should the General declare his intentions. When a few weeks ago, he picked the nomination form, the fold of IBB opportunists was agog. Loudmouth boasts and claims of connectedness to the General was the order of the day.

IBB’s announcement over the weekend that he would not be contesting against his close associates, Yar Adua and Gusau, who have also indicated interest in the race is a blow to the scheming of these professional political opportunists. While all Nigerians are elated at the pull-out of IBB, acclaimed killer of the Nigerian 3rd attempt at democracy by his annulment of the June 12, 1993 presidential election, widely believed to have been won by the late M.K.O. Abiola, these political opportunists are grossly unhappy.

For once, IBB has taken a widely popular decision. If we are to give him credit, he has lived up to his reputation as a master schemer. He must have analyzed the political climate and peculiarities of the times and realized the futility of his candidacy. It is believed that President Obasanjo might have been responsible for the IBB pullout, having denied the toothy General of his wholesale endorsement. The writer does not see why Obasanjo should single out any one of the aspirants for endorsement. If what we seek to install is a democracy Obasanjo should leave the endorsement to the individual parties to conduct. Whatever informed the IBB pullout, it is a welcome decision.

Friday, December 08, 2006

MEND’s Double Speak

One wonders what criteria MEND used to disqualify certain presidential aspirants and endorse former Military Administrator of Lagos state, Buba Marwa. They mentioned the antecedents of the politicians as the formula used to arrive at the endorsement of Marwa. If memory serves us correctly, only late last year Mohammed Buba Marwa was arrested for complicity in the Abacha loot, to which he admitted and remitted the money as condition for his release. Is this not enough ground to disqualify Marwa?

If it smells like a dead fish, chances are it is a dead fish. The endorsement of Marwa by MEND smells like a rotten fish and only goes to confirm what many have suspected of the nefarious organization. Perhaps what has happened is that forces behind the Marwa candidacy have bought ("settled" in local parlance) the leadership of MEND, who have thus sold their support in their characteristic venal manner, since as we all know, it is money that drives these folks.

Those faceless folks with the fake names who signed the so called communiqué of the dubious “political arm of the Consultative Assembly” of MEND do not speak for the right thinking people of the Niger-Delta who see their putative endorsement of the Marwa candidacy as an extension of the despicable and diabolical machinations that have characterized this anarchical and terrorist group. And if Marwa were to have a crack at the presidency, he would do himself a whole world of good to distance himself from this criminal and nihilist group, and condemn its tactics of mayhem and anarchy.