EXCLUSIVE: How Malami ignored fraud warnings while pushing for payment of suspicious N159 billion debts
Mr Malami received at least three warnings, including an EFCC report intimating him that at least a part of the debts is unjustifiable. But he seems to have disregarded them all.
The Attorney-General of the Federation and Minister of Justice, Abubakar Malami, has for years disregarded repeated warnings against the suspicious $418 million judgment debts said to be owed by the states and their local governments with respect to the Paris Club refunds, PREMIUM TIMES can authoritatively report today.
But despite the warnings, including a report by the Economic and Financial Crimes Commission (EFCC), against the legitimacy of the debts, the minister has been contributing to what anti-corruption activists consider a desperate push for the settlement of the purported creditors through monthly deductions from the allocations of states and local governments.
This newspaper, now in possession of copies of tens of official correspondences and documents concerning the matter, exclusively reported how the AGF, along with two other powerful officials, has been working against the demand by the Nigeria Governors’ Forum (NGF) that the legitimacy or otherwise of the huge debts be determined through a forensic probe.
Others with whom Mr Malami has been countering the governors are Ibrahim Gambari, the chief of staff to President Muhammadu Buhari, and the Minister of Finance, Zainab Ahmed.
Some individuals who claimed to be agents of the judgment creditors, our reporters gathered, have offered as much as $40million in bribes to the Chairman of the NGF, Governor Kayode Fayemi, to break his resistance to the settlement of the suspicious debt.
But the Ekiti State Governor rejected the overtures, insisting that the debts and the judgments around them should be thoroughly investigated in the interest of the Nigerian people, those familiar with the matter said.
However, following PREMIUM TIMES expose on the matter last week, some publications were orchestrated in the media to smear the NGF chair, claiming he was blocking the payment because his demand for a cut of 10 per cent of the outstanding amount was rebuffed.
The judgment debts
The controversial debt arose from various court judgments ordering that some “contractors” and “consultants” be paid for certain services and projects executed for the various states and the 774 local governments.
Some of the claimants were said to be consultants who helped the states and local governments to secure recovery of funds over-deducted from their allocations between 1995 and 2002 to service then London and Paris Club loans.
On the other hand, the contractors among them were purportedly engaged to execute certain projects in all the 774 local governments in anticipation that they would be paid from the Paris Club refunds.
PREMIUM TIMES reported how past leaderships of the Association of Local Governments of Nigeria (ALGON) and the NGF had given tacit support to six claimants in securing court judgments to validate their claims to their shares of the refunds.
The judgment debts, which currently stand at $418,953,670.59 (amounting to about N159 billion at a conservative exchange rate of $1 to N380.5), are being contested by the NGF leadership under Mr Fayemi.
The Mr Fayemi-led NGF is demanding a probe to ascertain the service rendered by the said creditors to prove or disprove their entitlement to the planned humongous payments.
PREMIUM TIMES’ earlier report on the matter indicated that President Buhari, following protests by the NGF in January, directed that the moves for the settlement of the debts be suspended.
But that has not deterred the Mr Gambari-led camp from continuing to push for the payments to the creditors as quickly as possible.
Warnings received by AGF
Mr Malami has received at least three warnings, including an EFCC report intimating him that at least a part of the debts is unjustifiable.
PREMIUM TIMES, after its first report on the matter, obtained two letters authored by successive presidents of ALGON in 2018 and 2019 protesting the judgment claims credited to Ted Iseghoghi-Edwards and RIOK Nigeria Limited.
In the letter dated September 10, 2018, with reference number, ALGON/NP/FMJ/VOL1/001/18, and which was received by the AGF office on September 13, 2018, the then ALGON President, Gambo Kagara, informed Mr Malami that neither Mr Iseghoghi-Edwards nor his law firm, worked for the association as claimed by them in the recovery of the refund of the over-deducted Paris Club loans to be entitled to any payment.
“ALGON as an association did not at any time engage Ted Edwards/Edwards and Partners to recover on its behalf or on behalf of Local Governments, funds related to the refund of Paris and London debt over-deductions,” Mr Kagara’s letter read in part.
Mr Kagara’s letter, which was a reply to an earlier enquiry by Mr Malami, explained that ALGON actually engaged the services of some lawyers that represented the association and by extension its members during the litigation process that ended in favour of the association.
But it added, “A perusal of all the relevant court records will show that neither Dr Ted Edward nor Edwards and Partners were counsel on records throughout the entire court proceedings.”
Concerning RIOK, which is laying claim to a court judgment awarding it over $142 million (about N54 billion) as its share of the Paris Club refunds, Mr Kagara stated that there was no evidence the firm executed the contracts it was awarded by ALGON in December 2013 to be entitled to the monetary claim.
His letter to Mr Malami reads in part, “ALGON via an award letter dated December 17, 2013, awarded a contract to RIOK Nigeria Limited for the provision of boreholes and other water reticulating apparatus in all the 774 Local Governments and Area Councils in Nigeria.
“This was subsequently followed by a Memorandum of Understanding (MOU) executed by both parties.
“The entire contract sum was $318,807,950,596, to be funded from the Paris Club refund funds accruable to Local Governments.
“From ALGON’s records, there is no evidence that RIOK has executed the required job.”
It added that there was also “no communication from the company informing ALGON of the job execution/completion.”
“No job inspection has been carried out by ALGON and RIOK has not formally handed over any site of job completion; no certification of job completion has been issued to RIOK; consequently, the association categorically denies execution of the work by RIOK to justify any claims for payment,” the letter added.
ALGON’s second warning to Malami
ALGON, under a new administration led by Kolade Alabi as president, wrote another letter dated October 8, 2019, to Mr Malami, restating the association’s position on the judgment debts as canvassed in Mr Kagara’s September 10, 2018 correspondence.
In the new letter with reference number, ALGON/LSD/AGF/VOL1/002/19, which was received by the AGF office on October 15, 2019, Mr Alabi also referred to Mr Malami’s earlier queries on the matter.
“The queries were responded to via ALGON’s letter dated September 10, 2018,” Mr Alabi stated in part.
He further stated that the “feedback” from the association’s lawyer “underscores and re-emphasises ALGON’S position as expressed in our previous letter to the office of the AGF concerning the mentioned parties.”
Restating the previous position of the association, Mr Alabi said “Dr Edwards/Edwards and Partners Law Firm were never at any time engaged by ALGON EXCO to recover on its behalf or on behalf of the local governments, funds related to the Paris /London Club Debt Refunds.”
He also recalled that ALGON entered into a contractual agreement with RIOK Nigeria Limited for the provision of boreholes and water reticulation apparatus in the 774 local government areas in the country with the contract aimed “to be funded from the Paris/London Club refund proceeds due to local governments.”
But Mr Alabi stated again that “The contract was never executed in part or full because the condition precedent for its execution never materialised. Consequently, RIOK cannot claim payment for a non-executed project.”
He also begged the AGF to use his “good offices to ensure that funds belonging to local governments are not used to settle dubious and illegal claims.”
The Minister of Finance, Budget and National Planning, and a Senior Advocate of Nigeria, Femi Falana, were copied the letter.
The ALGON’s letters are not the only warnings that Mr Malami received.
Mr Malami, in his letter, dated July 17, 2020, sent to the President’s Chief of Staff, Mr Gambari, acknowledged an EFCC report questioning the legitimacy of the $159 million being claimed by Mr Iseghoghi-Edwards, one of the six judgment creditors.
He said in the letter that the “recent EFCC report shows” that Mr Iseghoghi-Edwards “is not entitled to this sum”.
The minister also informed the Chief of Staff in the letter that, although he had initially referred the matter to the EFCC for investigation, the report of the commission was not served on his office.
But despite admitting the existence of a damning EFCC report on the controversial debts, Mr Malami did not try to discourage Mr Gambari on its settlement or at least recommend its suspension until further probes are done.
The judgment creditors
PREMIUM TIMES has extensively reviewed the details of the Paris Club-related judgment creditors from a series of letters and documents sent to the presidency by the AGF and the Minister of Finance at various times.
The claimants include a former member of the House of Representatives, politician and lawyer, Ned Nwoko, who is laying claim to $142,028,941 (about N54 billion) via a consent judgment he obtained from the Federal High Court in Abuja in the suit marked FHC/ABJ/CS/148/2017.
Three beneficiaries laying claim to $143,463,577.76 (about N54.6 billion) via a judgment of the Federal Capital Territory (FCT) High Court in the suit marked FCT/HC/CV/2129/2014 are Riok Nigeria Ltd, Orji Nwafor Orizu, and Olaitan Bello.
From the $143,463,577.76, Riok Nigeria Limited has a share of $142,028,941.95 (about N54 billion), Mr Nwafor is entitled to $1,219,440.45 (about N464 million), while Mr Bello is posturing to be paid $215,159.36 (N81.7 million).
The claimant with the singular lion share is Ted Iseghoghi Edwards, who is laying claim to $159,000,000 (about 60.5 billion) through a judgment he obtained from the FCT High Court in suit number FCT/CV/1545/2015.
A firm, Panic Alert Security System Limited, owned by George Uboh, is also laying claim to $47,831,920 (about N18.2billion) based on another “consent judgment” it obtained in suit number FHC/ABJ/CS/123/2018, which was filed as recently as 2018.
As earlier reported by PREMIUM TIMES, the suits leading to the judgments were either feebly defended or outrightly consented to by past leaderships of ALGON and NGF.
The current NGF leadership under Mr Fayemi is questioning the legitimacy of the entire debt.
Malami’s frantic push
PREMIUM TIMES reported previously that Mr Malami is the only one that has been in the picture from inception, among the three top officials pushing for the settlement of the judgment debts.
The duo of Mr Gambari and Mrs Ahmed only got involved in the matter from the points their predecessors stopped.
Mr Malami’s roles are so crucial in the matter that his office is involved in the compilation of the list of all the judgment debts against the government and the verification of the judgment debt lists compiled by the Federal Ministry of Finance.
He was also responsible for the categorisation of the judgment debts into three groups – the Paris Club refunds-related debts; Top Priority Debts due to enforcement actions, and General Debts incurred by the Federal Government’s MDAs.
He also advised the government on the level of priorities to assign to each of the categories of debts.
PREMIUM TIMES observes from his various correspondences on the matter that his legal advice was consistently tilted towards how the Paris Club refund-related debts could be settled without delay.
A meeting of officials from the federal ministries of finance and justice, the Debt Management Office (DMO), the Budget Office. and the Central Bank of Nigeria (CBN), which held on June 12, 2017, had recommended four alternative sources of funds to defray the judgment debts.
The recommended sources were: Budget and or supplementary budget, promissory notes, Federal Government bonds; and extra-budgetary votes.
Following the recommendations by the committee, Mr Malami, in his letter dated June 16, 2017 with reference number, MJ/LIT/ABJ/SH/JD/598/Vol.1/17, advised the President to approve the payment of the judgment debts from budgetary sources.
But in her own recommendation to the presidency via her letter dated September 27, 2017, with reference number FMF/OHMF/JDAA/VP/1/2017, then Minister of Finance went outside the committee’s suggestions and advised that the funds should be sourced from “recovered funds”.
Following the Minister of Finance’s recommendation, Mr Malami quickly dropped his former advice that the funds should be sourced through budgetary means.
President Muhammadu Buhari speaking with Fertilizer Producers and Suppliers Association of Nigeria (FEPSAN)
In his letter dated November 3, 2017, with reference number MJ/LIT/ABJ/SH/JD/598/101/16, he advised President Buhari that the approved judgment debts should be paid from recovered funds as advised by the Minister of Finance.
But the then Chief of Staff, Abba Kyari, did not accept the recommendation of defraying the debts from recovered funds.
Mr Kyari, in a letter dated November 8, 2017, with reference number SH/COS/08/B/395, sent to the Ministry of Finance, sought expert advice on “alternative sources of funds that may be utilised to settle the relevant judgment debts other than recourse to recovered funds.”
In the end, the Minister of Finance, Mrs Ahmed, through her letter dated October 6, 2020, requested Mr Gambari to advise the president that the most viable option is to settle all categories of judgment creditors through the issuance of promissory notes.
She also advised that creditors in Category A (Paris Club Refunds Related Debts) be settled through “equal monthly amount deductions from statutory allocation due to states and local councils over a period of 10 years.”
Mr Malami had no objection to the new recommendation by Mrs Ahmed and in fact further advised that the consent of either the Federal Executive Council (FEC) or that of the National Assembly would not be required for the issuance of the promissory notes.
Mr Buhari on December 24, 2020, approved the recommendation for the issuance of the promissory note as tabled before him by Mr Gambari.
The NGF subsequently obtained Mr Buhari’s fresh directive suspending the settlement of the debts pending a forensic audit.
But since January, the NGF has not been able to secure the commitment of Mr Gambari’s camp to abide by the President’s fresh directive.
Source: PREMIUM TIMES
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