Money laundering and asset recovery: the case of Nigeria

27 November 2014, by Auwal Ibrahim Musa, Zero Corruption Coalition.

In Nigeria, it is disheartening that despite efforts to tackle money laundering and other financial crimes alarming examples of such crimes are abundant. Statistics released by Nigerian anti-corruption agencies like the EFCC , ICPC, as well as international organisations have revealed that trillions of naira meant for national development have been mismanaged or looted by corrupt leaders, officials and other Nigerians since independence. There have been and continue to be efforts to return some of the looted funds to Nigeria. It is important that when assets are returned this is done transparently, accountably and with multi-stakeholder oversight.

In a recent article, the Managing Director of Transparency International, made the point that corruption around the world is facilitated by the ability to launder and hide proceeds derived from the abuse of power, bribery and secret deals. According to the article, “Dirty money enters the financial system and is given the semblance of originating from a legitimate source often by using corporate vehicles offering disguise, concealment and anonymity. For example, corrupt politicians used secret companies to obscure their identity in 70 percent of more than 200 cases of grand corruption surveyed by the World Bank.”

The article further lamented that proceeds of corruption are lodged in foreign banks or invested in luxurious mansions, expensive cars or lavish lifestyles. The culprits do this “with impunity and in blatant disregard for the citizens or customers they are supposed to serve”.

Cases of corruption and money laundering are not unusual in Nigeria and a great number of high-profile corruption cases have remained inconclusive. Indeed, some former state governors who have cases to answer have brazenly come back to political reckoning. They confidently walk the streets today, deliberating on national issues. A report by the EFCC claimed that between January and December 2012, it filed about 353 cases in different courts in the country with about 53 convictions recorded.

It is worrisome that Nigerian leaders appear to handle corruption with levity. This has been the case with the late Sani Abacha who has been honoured by the Nigerian government despite detailed evidence of his misdeeds.

As reported in This Day Live, after the death of General Sani Abacha’s on 8 June 1998, General Abdulsalami Abubakar assumed power on 13 July 1998 and thereafter instituted a Special Investigation Panel to look into cases of swindled public funds and monumental looting of the treasury by his late predecessor. The panel’s task was to identify the culprits and help recover all properties or assets illegally acquired by the culprits.

The panel secured early records which revealed that between November 1994 when Abacha took power and June 1998 when he died, Abacha had taken from the Central Bank of Nigeria funds totalling US$ 2,263,520,497.00 in cash withdrawals, travellers’ cheques and telegraphic transfers, by means of false security vote letters fraudulently claiming that the funds were needed for national security. This is detailed in a US Department of Justice complaint filed in November 2013 which led to freezing assets in March 2014 and the forfeiture in August 2014 of over US$ 480 million in corruption proceeds hidden in bank accounts around the world by Abacha and his co-conspirators. As reported by the Department of Justice, the judgment is the result of the largest kleptocracy forfeiture action brought in the department’s history.

In other recoveries, last year the Swiss Ambassador to Nigeria Mr. Hans Hodel, said his country “had discharged its legal obligations to Nigeria by returning all the Abacha loot, estimated at more than US$ 700 million. We must praise the cooperation extended to Nigeria Civil Society Groups by the Swiss government in facilitating the return of the Abacha loot.”

And in June 2014, after a 16-year court battle, Nigeria was able to recover over $225 million stolen by Abacha and his associates and deposited in Liechtenstein.

Despite all this, shamefully, in early 2014, President Goodluck Jonathan honoured the late Head of State Sani Abacha with a Centenary Award for his contributions to the nation.

The case of James Ibori also illustrates why there is reason for concern about the lack of accountability in Nigeria. Ibori was governor of the oil-rich Delta State between 1999 and 2007 and was sentenced in September 2013 to 13 years imprisonment in Britain after pleading guilty in February 2012 to 10 counts of fraud and money-laundering worth tens of millions of pounds. Ibori had reportedly hidden some of his assets in the oil firm Oando and money passed from the company’s accounts to Ibori’s Swiss accounts. Ibori’s case remains one of the biggest embezzlement cases witnessed in Britain, and the successful prosecution of Ibori was also a rare example of a senior Nigerian politician being held to account for the corruption that blights Africa’s most populous country.

Meanwhile, prior to his sentence in Britain, a Federal High Court sitting in Asaba, Delta State, discharged Ibori on 17 December, 2009 of all 170 charges of corruption brought against him by EFCC.

According to a 2012 report by Global Financial Integrity, a Washington-based anti-corruption organisation, US$129 billion flowed out of Nigeria over a period of a decade through crime, corruption and tax evasion. The EFCC cited this amount “fraudulently transferred out of Nigeria in 10 years”.

Also, according to reports, out of the £80 million of Ibori’s loot that had been temporarily frozen and confiscated in the UK, £1.2 million had so far been returned to Nigeria. In November 2014 it was reported that the UK government is preparing to return an additional £6.8 million while the rest await a confiscation hearing fixed for April 2015.

Although there is collaboration between the executive and legislature on the utilisation of the funds since the era of former President Olusengun Obasanj, it is expected that such money (including any other funds) go straight to the Central Bank after being repatriated. However, President Jonathan has not specifically set up an inter-ministerial committee including credible civil society organisations to take rightful decisions on the sums repatriated so far.

We call on the Nigerian government to exercise full-fledged transparency and accountability by publicly declaring all the sums following their repatriation and by setting up an appropriate committee including credible civil society organisations to ensure the judicious utilisation of the fund for the maximum benefit to the country and so that the funds do not get returned to corrupt hands.

Note from Editor

The UNCAC Coalition sent a letter to US Attorney General Holder in September 2014 recommending that any forfeited Abacha-related funds returned to Nigeria be placed in a trust fund.