Oil minister in N2.2b bribery scandal

Monday, Apr 2011



Petroleum minister Diezeani Allison-Maduekwe

Petroleum minister Diezeani Allison-Maduekwe charges oil marketers $8 to collext their authorised letters.

The scam is breathtaking in its brazenness: in exchange for obtaining the authorisation to import gasoline, oil marketers are being instructed by an agency in the petroleum industry to call a mobile telephone number and pay a bribe of $8 per metric tonne of petroleum allocated to them. This single scam, which was imposed just last week on oil marketers such as Conoil, Total, Sahara, Oando, African Petroleum, Mobil and the rest of the 36-member field, involves the 1.8 million tonnes of refined petroleum approved for importation for the April to June quarter by Diezani Allison-Madueke, the petroleum minister. Each marketer is scheduled to import between 50,000 and 180,000 tonnes for the quarter, industry and government sources said. By these numbers, each company is liable to pay between $400,000 and $1.44 million, or a total of $14.4 million.

The agency at the heart of this particular scandal is the Petroleum Products Pricing Regulatory Agency, or PPPRA, which is in charge of government subsidies to keep gasoline prices low. The agency issues letters of authorisation that allow oil marketers to import gasoline and other subsidised products. The agency, like the Petroleum Development Trust Fund, has customarily operated under the supervision of the presidency. But upon being named minister a year ago, Mrs. Allison-Madueke fought to consolidate the agencies under her direct control, including throwing a tantrum during a cabinet meeting at which the president finally gave her what she desired, according to those at the meeting. After taking control of the PPRA, the minister appointed a trusted pal, an NNPC official close to retirement, Godi Ebugi, as the agency’s executive secretary. It is believed that Mr. Ebugi is at the agency to do the minister’s bidding.

Helping the boss

According to multiple sources in the oil industry and at the highest reaches of our government, Mrs. Allison-Madueke has let it be known that this and other back-channel payments are required in part to fund the election campaign of her boss, President Goodluck Jonathan.

“This ‘small toll’, we are told, is to finance the president’s re-election campaign,” a well-placed source from one of the affected oil marketers told us.

NEXT has no information to suggest that the president’s campaign is in fact linked to this bribery scandal. It is not unusual for thieving officials to claim that they are acting at the behest of a president. Upon being contacted by our reporters, a spokesperson for the president’s campaign reacted with alarm and issued a sharp denial.

“That is absolutely not true,” said the spokesperson, Abba Dabo. “The PCC (Presidential Campaign Committee) has mandated nobody to collect anything for it. We have nothing to do with any collection by any government organ. If somebody is making any request on our behalf, we need to know who it is.”

Agent Go-Between

The shakedown of the oil marketers, which amounts to about N2.2 billion, is payable only in cash to a shady character traced by our reporters to a small office in Abuja called Mr. Rufai, who is serving as the bag man for Mrs. Allison-Madueke’s most trusted officials. It is Mr. Rufai who directed our reporters, posing as representatives of an oil marketer, to his office and instructed them on how to make the payment. Our reporters had called the same mobile telephone number given to the oil marketers.

Mr. Rufai, a tall, bespectacled, light-skinned man, operates out of a small office at 17 Constantine Street in Wuse Zone 4, Abuja. His job is to receive cash from the oil companies for onward disbursement to PPPRA officials who, in turn, are expected to pass it to Mrs. Allison-Maduekwe, according to numerous sources. Mr. Rufai directs all ‘clients’ to his office, located on the first floor of a rambling two-storey building amongst several other small bureau de change establishments, and assists them in calculating the total value of money to be paid in bribes. Audio and video excerpts of our reporter’s encounter with Mr. Rufai can be found at 234NEXT.com.

While Mr. Rufai serves as the bag man, the bribery plan is actually initiated at the PPPRA’s offices in the Central Business District of Abuja, where the general manager for operations, Gbenga Komolafe, or his representative, would typically be the first port of call for the oil marketers.

“He or his representative then tells the gasoline marketers that they have to pay $8 per tonne in order to collect their authorisation letter,” said an industry source who, like most people contacted for this story, spoke only on the condition that their identities be concealed in order not to jeopardise their business or official relationships.

‘It’s all a lie’

Mrs. Allison-Madueke did not make herself available for an interview. But a spokesman angrily denied that she has anything to do with any scam, saying this story has been concocted “to tarnish the image of a hardworking minister.”

“There is nothing in any way to say that such sharp practices exist,” said the spokesman, Levi Ajuonoma, who also doubles as spokesman for the quasi-independent Nigerian National Petroleum Corporation, NNPC. “And to concoct such [a] story at this point in time is calculated at tarnishing the image of a hardworking minister and the PPPRA executives.”

“We totally disassociate ourselves from such [a] story,” he added. “The purported evidence, in our judgement, is contrived to support the reporter’s jaundiced view of the industry and her senior executives. It is one of the attempts to create disharmony and disrupt the smooth running and stability of the downstream which many Nigerians are now enjoying.”

None of the oil companies would admit on the record that they have paid the bribes, and those who did asked that their identities be protected so that their businesses would not be jeopardised. Others denied outright that they had paid any bribes. Acharu Osime, a spokeswoman for oil marketer Sahara Energy, vehemently denied her company’s involvement in any wrongdoing.

“This is a false allegation,” she protested. “We go through due process upholding our integrity and credibility in all our business transactions. We have and will never involve ourselves in anything less,” she said.

Niyi Olowola of Oando, while confirming that his firm had received approval for petrol importation for the quarter, also denied paying any bribes.

“It is not possible, we did not make any payment,” he said, adding that authorisation for Oando, as a major industry player, should not come as a surprise. “Oando is the largest importer of fuel. That is not anything out of normal,” he said.

The spokesperson for the PPPRA, Wole Adamolekun, as at press time, still asked for more time to give an official response even though he had been given over 16 hours to respond. However, Lanre Oladele, who apparently spoke for Mr. Adamolekun, denied that any bribe payment scheme existed in his agency.

“To the best of my knowledge, I am not aware of anything like that and I don’t believe anything like that exists,” he said

Who will tell the president?

This latest of many ripoffs has created an uproar in the industry, which has been smarting for the past year under what is generally seen as the incompetent, inattentive, and uncommonly corrupt leadership of Mrs. Allison-Madueke. Legion are the tales of shakedowns, the elevation of hitherto unknown “suitcase” companies to the status of major industry players, of appointments with key industry leaders not kept and board meetings not held.

This view is shared by a surprisingly large number of high-level government officials. But many discuss the matter only in whispers, because of a widespread belief that Mrs. Allison-Madueke enjoys an unusually close personal relationship with the president.

“That’s why nobody says anything,” said one high-ranking official.

In the bubble typically created around a president — an isolation that has elicited public complaints even from Mr. Jonathan himself — it is not at all clear that the president has any clue of the widespread disaffection with his petroleum minister.

A call to account

Opposition parties have reacted angrily to the bribery scandal. Yinka Odumakin, a spokesperson for the Buhari-Bakare campaign, called for an immediate investigation.

“This confirms our position that the problems of this country are caused by the PDP,” Mr. Odumakin said. “They are the ones that are giving out the contracts and are also the ones that are collecting the contracts.”

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