Introduction
Recent seizure
Comment
The federal government continues to issue reports regarding the success of its whistleblower programme unveiled in December 2016 (for further details please see "Whistleblower policy already producing results, but government left red-faced"). Recently, there have been almost daily reports of the discovery of significant amounts of money as a result of whistleblower tip-offs. During the past month alone, there have been reports that over N700 million (approximately $2.3 million) in cash has been discovered in various locations around Lagos and more than N4 billion (approximately $13 million) in bank accounts.
In light of the above, it was no real surprise when, on April 12 2017, the Economic and Financial Crimes Commission (EFCC) reported the discovery of $43.4million, £27,800 and N23.2million (approximately $76,000) in cash in an apartment in Ikoyi, an expensive suburb of Lagos, following a tip-off. Initial reports first linked the money to a former state governor and former national chair of the People's Democratic Party which was ousted in the 2015 election. Following the accused's denial that the money belonged to him, the cash was reported to belong to a recently dismissed Nigerian National Petroleum Corporation (NNPC) senior executive, who was reported to have been involved in malpractice that had resulted in the NNPC losing some N17.9 billion (approximately $58 million) from the irregular sale of petrol.
The senior executive's denials were swift and further reports soon circulated that the money belonged to the National Intelligence Agency (NIA), the government agency charged with overseeing foreign intelligence and counterintelligence operations. This revelation came just a few hours after the EFCC had sought and obtained an interim forfeiture order for the money from the Lagos Federal High Court. According to media reports, the head of the NIA was "furious" with the head of the EFCC:
- describing the latter as reckless for ignoring his advice that the NIA owned the cash and that the apartment had been a safe house; and
- accusing the EFCC of compromising the NIA's operations.
If this situation was not bizarre enough, a few hours later the governor of oil-rich Rivers State claimed the cash for his state, alleging that he had evidence that the money had been misappropriated from the state by his predecessor, who is now the federal minister of transport and is reported to own the apartment in which the money was found. Presumably, these conflicting claims will be litigated in court when the interim forfeiture order comes up for review.
To make this situation even more interesting, if the NIA is the owner of the money, it must explain why it retained these funds outside the Central Bank of Nigeria (CBN) following the executive order issued by President Buhari in August 2015 which extended the treasury single account policy introduced by former President Jonathan in 2012. Initially, the policy applied to a specified number of government ministries, departments and agencies. However, Buhari's order extended the policy to all federal government ministries, departments and agencies and all of their funds are required to be consolidated into a single account with the CBN. It therefore seems that the NIA's funds should also have been in an account with the CBN, as the executive order indicated no exceptions.
A few days after the money was discovered, Buhari directed that the head of the NIA be suspended and ordered the vice president to conduct an investigation into the affair with the assistance of the federal attorney general and the national security adviser. The investigation was to be completed within 14 days, which elapsed on May 4 2017. It is unclear whether an investigation report has been issued; there are indications that such a report is unlikely to be made public.
Nigeria's whistleblower policy was announced on December 21 2016 and is intended to obtain information concerning the violation of financial regulations, the mismanagement of public funds and assets, financial malpractice or fraud and theft "deemed to be in the public interest". Under the programme, persons with relevant information can make an anonymous report to the government, and individuals who identify themselves "may be entitled to anywhere between 2.5%-5% of the amount recovered". To qualify to receive this reward, the whistleblower must have provided information that the government "does not already have and could not otherwise obtain from any publicly available source", and the actual recovery must be "on account of the information provided by the whistle blower".
Despite the reports of seizures resulting from information provided by whistleblowers, there have yet to be any reports that anyone has actually received any part of the recovered monies. Since this most recent seizure, which was also widely reported by the international media, is allegedly of federal government cash, observers are watching with great interest to see how this matter unfolds.
For further information on this topic please contact Babajide Oladipo Ogundipe at Sofunde Osakwe Ogundipe & Belgore by telephone (+234 1 462 2502) or email ([email protected]). The Sofunde Osakwe Ogundipe & Belgore website can be accessed at www.sooblaw.com.