Written by Chudi Offodile
No one would have heard of the Nigeria LNG bribery scandal if not for Georges Krammer, former Director General of the French company, Technip. Krammer was accused of paying 3 million euros in illegal commissions during investigations into Elf-Aquitane operations in Asia and Africa.
Krammer claimed the commissions were legal and in line with company’s policy. Technip management disputed his
claims and left him to face charges of misappropriating 3million euros. Angered by this development, Krammer who had worked for Technip for 35 years, squealed. He went before Judge d’ Instruction Renaud Van Ruymbeke and told him how Technip’s commission payment system worked in Indonesia, Thailand and on the LNG Project in Nigeria.
Thus began, the French investigation of Nigeria LNG project with Renaud Van Ruymbeke in charge. The French investigation triggered off other investigations in Switzerland, the United States, and Nigeria.
The Nigeria Liquefied Natural Gas Limited, NLNG, was incorporated in 1989 with the Nigeria National Petroleum Company, NNPC, having majority stake.
In 1993, the Administration of Chief Ernest Shonekan agreed to a reduction of Nigeria’s equity in the company, ceding 51 per cent to the foreign shareholders in this order: Shell – 25.6 per cent, TotalFina ELF – 15 per cent, ENI 10.4- per cent. The remaining 49 per cent is held by the NNPC.
In November 1995, the engineering, procurement, and construction contract was awarded to the TSKJ consortium owned equally by Technip (French) Snamprogetti,(Italy) Kellog, Brown& Root (KBR) (Halliburton) and Japanese Gas Corp (JGC) at the cost of $3.6 billion knocking out the rival consortium BCSA, comprising Bechtel, Chiyoda, Spibat, and Ansaldo. The rivalry between the two consortia was so intense that it nearly derailed the project.
The TSKJ consortium through its subsidiary, LNG Servicos , engaged the services of Tri-Star Investments Limited to, among other services, promote and support the consortium in its commercial action and assist in maintaining ‘favourable relationship’ with the client and other government and business representatives when deemed desirable.
The clause, it turned out, represents an attempt to legitimise an elaborate bribery scheme to cover individuals within NNPC, NLNG, the Nigerian Government, consortium partners and other Western interests. The scheme probably ran from the time of the award in 1995 up till sometime in 2004 and possibly beyond. This period covered the award of the contract for trains one to six, at a cost of a little below $7 billion. The brain behind Tri-Star is a London based lawyer, Jeffrey Tesler, now about 60 years old.
Then there is Wojciech Chodan who is now about 71 years old. Chodan is central to the entire bribery saga. He was a top executive of the Halliburton subsidiary, KBR, a member of the TSKJ consortium. He attended key meetings and recorded the various schemes worked out by the consortium for bribery and for purposes of tax evasion. These voluminous records or minutes are generally referred to as the Chodan Notes.
They contain in some cases, names of those to be bribed and the amounts proposed or received, the fears expressed by some consortium members and the steps taken to allay their fears.
The Chodan Notes may not be evidence of the guilt of those mentioned in the notes but they provide the clearest evidence of the complicity of the consortium partners in establishing the slush fund. A
fter several months of denial, the leakage of the Chodan Notes, forced Halliburton to sever all ties to Chodan and former KBR President, Albert Jack Stanley, who appeared severally in the notes as AJS. The bribery scheme itself was code-named ‘cultural arrangements’, a very sad illustration of the way business is done in Nigeria and the mindless audacity of some people in authority.
Jeffrey Tesler and Wojciech Chodan, both citizens of the United Kingdom were indicted by a federal grand jury in Houston, USA on 17 February 2009 for violating the foreign Corrupt Practices Act, FCPA, by allegedly helping KBR bribe Nigerian officials. Chodan is yet to be arrested but Tesler was arrested on 5 March 2009, following extradition request by the United States authorities. With these developments, Nigeria’s oil industry players, the business, and political elite should brace up for a bumpy ride.
The indictment seeks a forfeiture of more than $132 million paid to Tesler by TSKJ to bribe Nigerian officials. In February 2009, KBR pleaded guilty to violating the FCPA by paying Nigerian officials at least $182 million in bribes for EPC contracts awarded between 1995 and 2004 and agreed with the Department of Justice, DOJ, to pay a $402 million fine. KBR/Halliburton settled civil FCPA charges with the Securities and Exchange Commission, SEC, agreeing to be jointly liable to pay $177million for disgorgement.
SEC’s complaint rests on the failure of Halliburton’s internal control mechanism to detect or prevent the bribery and that its records were falsified to cover up the illegal payments.
Nigeria’s The Guardian reported in its March 9, 2009 edition that the Attorney General and Justice Minister, Michael Aondoakaa, has threatened to sue the companies involved in the bribery scandal on their own soil or in the world financial centres where they are very active.
He puts forward the argument, that Nigeria has suffered losses on three fronts: perception/humiliation, discrimination in the world of business and colossal economic and financial losses.
Aondoakaa, a Senior Advocate of Nigeria, SAN, has been Nigerian Justice Minister for less than two years and cannot be held responsible for the country’s decision to bury its head in the sand like the proverbial ostrich, while the rest of the world struggled to unravel the bribery scandal in the last five years.
The Minister’s decision to intervene in this matter, even if for the wrong reasons, is a good beginning although his decision to seek justice abroad, on this issue, may be an admission of the futility of obtaining justice at home. The stakes have been particularly high in Nigeria because of the calibre of people named in the bribery scandal and the fact, as we have learnt, that the bribe money was still being distributed as the investigations proceeded.
The Economic and Financial Crimes Commission of Nigeria, EFCC, commenced investigations into the scandal at about the same time (February 2004) that the Public Petitions Committee of Nigeria’s House of Representatives was mandated to investigate the same matter. I was the Chairman of the Committee from June 2003 – December 2005 and I was directly in charge of the investigation.
The Executive Branch that controlled the NNPC undermined and frustrated the efforts of the Committee to hold the companies involved in the scandal accountable.
Not much was heard of the EFCC investigation, which had Ibrahim Magu as the Investigating Officer. I got to know of it when I asked Halliburton solicitors in Nigeria (TEMPLARS) for copies of the Chodan Notes and the contract agreement between LNG Servicos (TSKJ Subsidiary) and Tri-Star (Tesler).
They provided me with the contract agreement but then informed me that ‘the only copy’ of the Chodan Notes in their possession was handed over to the EFCC. Halliburton was obviously comfortable with the EFCC investigation, but quite uncomfortable with the House of Representatives investigation, perhaps, because we appeared to know a little bit more of the complex scandal.
Information on the scandal was sketchy at the time we commenced investigation and we were not quite sure how to proceed until I met Patrick Smith, who was Editor of Africa Confidential in London.
Radical Nigerian economist, Peter Alexander Egom introduced Patrick to me. Patrick arranged meetings between me and the French judge, Renaud Ruymbeke in Paris and introduced me to other international journalists working on the scandal.
These interactions deepened my understanding of the intricate bribery scheme and I soon developed a strong desire to join the rest of the world in unraveling the scandal. Despite our best efforts, we could not achieve much. The forces of reaction in government and NNPC were bent on shielding Halliburton and by extension, themselves.
In August 2004, I submitted an interim report to the House of Representatives with the recommendation “that all companies forming part of the TSKJ consortium and all Halliburton companies in Nigeria should be excluded from new contracts and new business, pending the outcome of the ongoing investigation”.
The House of Representatives unanimously adopted this recommendation on September1, 2004.
The response of the Executive Branch through the NNPC to this resolution, was to award more contracts to Halliburton/KBR .The engineering construction and services contracts to build the topsides of the FPSO for Agbami Deep offshore field, owned by NNPC, ChevronTexaco Petrobras, and Statoil was awarded to KBR. The same KBR formed a joint venture with Snamprogetti, and JGC, all three companies were members of the TSKJ consortium and still won a $1.7Billion EPC contract to build the Escravos Gas to Liquids Project, owned by NNPC and ChevronTexaco. These developments were quite frustrating. The government and the NNPC were clearly undermining our efforts and every attempt to seek collaboration with the Executive Branch failed.
On June 8, 2005 what was supposed to be an opportunity to present the facts before the President of Nigeria, Chief Olusegun Obasanjo availed itself, or so I thought. That morning, the Deputy Speaker of the House of Representatives (2003-2007), Austin Opara, informed me that a meeting had been scheduled later that day on the Halliburton issue with the President at the Presidential Villa, and that the Honourable Speaker (2003-2007), Aminu Bello Masari, had directed him to attend the meeting with me. At about 4:00 pm, I joined the Deputy Speaker in his official vehicle and we drove to the Presidential Villa.
We were all seated at the President’s conference room, the Halliburton team led by Andy Lane, the Chief Operating Officer, the NNPC team led by the Group Managing Director, Funsho Kupolokun, the Deputy Speaker and myself waiting for the President to join us for the meeting. I kept busy by studying a document circulated in the room titled Presentation by Halliburton to the President of the Federal Republic of Nigeria and jotting down my response.
A few minutes later, one of the presidency staff walked up to the Deputy Speaker and informed him that I would not be part of the meeting. He replied that I was a member of the delegation from the House of Representatives and that I was going to present the House position on the matter under consideration.
The fellow went out, consulted God knows who and returned with the same message that I would not be part of the meeting. At this point, the Deputy Speaker sprang up from his seat, beckoned on me and we walked out of the room and made our way back to the National Assembly, from whence we came.
Once again, the Halliburton enforcers had their way. On our part, we remained resolute but mindful of the limits of legislative enquiry. Meanwhile, recent events indicate that a well-coordinated global war on corruption appears to be zeroing in on Nigeria’s corruption industry, making it rather unlikely, that the enforcers will have the last laugh!
Offodile, lawyer and former member of the House of Representatives, was the Chairman of the House’s Public Petitions Committee from June 2003 – December 2005, and was directly in-charge of investigations.