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Challenges of safeguarding proceeds of corruption

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The Chairman, Economic and Financial Crime Commission, Ibrahim Magu

While the Proceeds of Crime Bill lies unattended to at the National Assembly, what happens to proceeds of crime strewn around the country? Who should take custody of them? How should they be administered, and who should manage the resources they generate?

These appear to be the maze of questions that the Nigerian government should speedily proffer answers to, before things go completely awry, now that there is no law to effectively address these posers.

A popular bookkeeping cliché says that accounts do not lie. That may be why good record keeping is often associated with accountability. In moral circles, nay philosophical speculation, it is often said that no two wrongs can make a right.

When it comes to proceeds of crime or corruption, it is left to be seen whether a crime committed against a criminal really ranks as a crime. For sometime now, the efforts of anti-graft agencies combating financial crimes and sundry corrupt practices in the country have been at the centre of national discourse. And while the Economic and Financial and Crimes Commission (EFCC) has recorded some notable achievements, especially in unearthing hidden vaults, and also spotting illicit transactions, it has also in the process left immense room for its ability to ensure good record keeping to be doubted.

Most times, when names of politically exposed persons are mentioned in relation to corrupt practices, or enrichment, the uproar obfuscates critical issues that surround the crime.

Blunder Of Processes
ONE issue that cannot be easily dismissed is the fact that the EFCC is a creation of importunity as it came about due to a combination of factors. In 2003 when it was established, most Nigerians had become disconsolate over the shabby treatment meted to their compatriots abroad, as a direct response to the rampant cases of advanced fee fraud, better known in local parlance as 419.

Again, the Financial Action Task Force on Money Laundering (FATF), had sustained pressure on government to change its non-cooperative attitude in response to growing international efforts against financial crimes, particularly money laundering. With Nigerian’s return to democracy, signs of success emerged, when the then President, Olusegun Obasanjo, gave a listening ear to the plaints against 419.

Apart from the good name the establishment of an agency to leverage the international fight against illicit flow of money earned clandestinely fetched Nigeria abroad, Obasanjo also saw the novelty of a financial crimes fighting commission and supported it.

Unknown to many, including FATF, Obasanjo also saw in the EFCC, an opportunity to give it back to politicians that made his second term ambition and presidency a challenging one. So, in the process of setting up a financial crime fighting outfit, and a political attack dog, the processes of documentation, custody and possible disposal of the proceeds, were not diligently thought through.

Therefore, the lack of a clear-cut organogram, charting different departments for coordination and control of the operations of the commission made the anti-graft body look much like an ad hoc committee.

Perhaps to serve the whims of the then sitting president, the EFCC was, upon its establishment, made to reflect on the capacity and know-how of just one man: the chairman.

The chairman takes inventory, takes decisions as to which leads should be pursued, and which cases are worth prosecuting among a plethora of services surrounding the anti-corruption fight. Being an offshoot of the Fraud Unit of the Nigeria Police Force, the EFCC refused to expand its scope to accommodate a gamut of new challenges its new status created.

That narrowness became public knowledge recently during the Senate’s screening of Ibrahim Magu, for confirmation as chairman of the anti-graft body. During that encounter, senators took the acting chairman to task over the sum total of proceeds of graft, including seized landed and moveable property, fiduciary documents, physical cash and ornaments.

Limited by space and distance, there was no way the chairman could even hazard a guess about the prodigious seizures, including residential buildings, running businesses, landed property and articles of ostentation in its custody.

It is not surprising that items confiscated by EFCC during investigations continue to rot even after investigations had been concluded and courts rule either way in the matters. This is so because there is no specific department that coordinates seizures or evaluates statuses of proceeds of corruption.

Questions abound whether the overall interest of the fight against corruption is to encourage waste of assets, which are without doubt, part of the wealth of the nation. This is so because Nigerians are interested in knowing what the best way to handle proceeds of corruption is, and who is to maintain the seized items.

In the event of auction, who should be responsible and how can the process be made transparent? In cases of running businesses like supermarkets, hotels, radio and television stations, what are the possibilities for averting depreciation, job losses and atrophy, while investigations are ongoing?

Opaque Management Of Proceeds
NOT long ago, it was speculated that a prominent Lagos State-based lawyer was handed titles to a choice property that was a proceed of corruption. Although the lawyer denied the allegation, the rebuttal did not erase the question of underhand transfer of proceeds of graft.

Allegations have been rife that some highly-placed law enforcement agents, and top operatives of the commission routinely convert some proceeds of corruption for their personal use under the cover of their privileged statuses. This unfortunate scenario, stridently calls to question, the transparent handling of items like cash, as well as buildings and vehicles by the anti-graft agency, as the latter have evidently been left to rot in different parts of the country.

From the point of seizure, through trial, and up to the final stage of court-ordered confiscation, stakeholders believe that the EFCC should have a department that keeps tab on materials that come into its custody, the same way the police keeps an eagle eye gaze on exhibits. Additionally, records of materials, which would be updated daily, many believe should be kept up to the minute at the different zonal and state offices of the commission.

The stakeholders further contended that it would not be asking for too much if the EFCC, on the basis of the volumes of seizures it carries out, begins to operate the same way banks do, such that at each of its offices, the click of a computer button would throw up all confiscated items, and actions taken about them or decisions made.
Furthermore, there is the compelling need for a legislation that stipulates how long proceeds of graft should be left in the custody of the EFCC after judgment had been passed. Leaving these items to accumulate, without record of their actual state, leaves room for insider corruption and other dubious transactions.

Kitting operatives of the commission with body cameras as done in advanced countries, would have come in handy in investigating allegations of pilfering leveled against some of them, especially in the wake of recent discovery of orphaned cash.

Outstanding Corruption Cases
WITHIN the past two years, EFCC has made several seizures across the country. Some of these property are still under interim forfeiture, which means the cases are yet to be decided, while in some, matters have been concluded and the property either forfeited to the state, or to individuals who were victims of the crime.

Because of peculiar challenges, it is becoming an arduous task to decipher between items that are on interim forfeiture, and those that have been permanently confiscated. This is rife in cases involving government officials and politically-exposed persons, including governors.

For instance, within the past two years, the agency has seized a good number of property, especially in the course of the probe of the $15b arms deal, involving former service chiefs, former ministers and top politicians.

From this particular case, the anti-graft agency has seized cash and buildings worth N5b from former Chief of Air Staff, Air Vice Marshal Adesola Amosu (rtd). Over N3b worth of assets were seized from former Minister of State for Defence, Musiliu Obanikoro, and his wife. Property were also seized from former Chief of Defence Staff, Air Vice Marshal Alex Badeh. Being cases that are still pending in court, the seized assets are still under interim forfeiture order. As such what happens to them should be the responsibility of EFCC.

Another outstanding case that is sure leading to more seizures is the one involving the former Minister of Petroleum, Diezani Alison Madueke. The alleged grand corruption case now popularly referred to as “Diezanigate,” among other things, involves the sharing of huge sums of money in the run up to the 2015 elections.

Madueke is alleged to have been involved in the sharing of monies amounting to $115m among politicians in the 36 states of the federation. The other issue against her is a N23b bribe allegedly given to officials of the Independent National Electoral Commission (INEC), for them to rig the elections.

While some monies were discovered during the search of some suspects’ houses, other suspects, including the former Minister of State for Finance, and a key member of Peoples Democratic Party, Senator Nenadi Usman, have refunded huge sums of money to the Federal Government.

Other recoveries made so far in the case include, but not limited to £600, 000 worth of jewelry allegedly seized from Madueke’s home. Another £1.4m was also reportedly seized from the wife of her associate, Jide Omokhore.

Despite all the much-publicised sums, the EFCC has been incapable of revealing the total sum so far recovered despite pressure from Nigerians and the National Assembly.
Other notable cases still being pursued by the EFCC are the ones involving the former Director General of Nigerian Maritime Administration and Safety Agency (NIMASA), Patrick Akpobolokemi, former militant leader, Government Ekpemukpolo, alias Tompolo, and several former state governors.

Whistle-blowing Policy As Effective Loot Recovery Tool
WHEN the Federal Government in February launched the whistle-blowing policy, many thought it would end up as one of those dead-on-arrival government policies, while some saw it as the much-needed tool.

According to the government, the aim of the policy is to increase exposure of financial crimes; support the fight against financial crimes and corruption; improve level of public confidence in public entities and enhance transparency and accountability in the management of public funds.

Since its launch the EFCC has made huge discoveries of stacks of local and foreign currencies stashed away in the most unimaginable places even though some persons still believe that some of the discoveries were programmed or stage-managed.

Be that as it may, in the last three weeks or thereabouts, the agency has recovered huge sums of money. For instance on April 7, the commission recovered about N500m from a shop in a shopping plaza in Lagos. Another N250m was recovered days later in Balogun Market, also in Lagos State.

On April 11, a whooping N4b was recovered from two bank accounts. The commission, which said in a statement that the money is suspected to be proceeds of crime belonging to a former deputy governorship candidate in Niger State, added that the suspected owner of the accounts and the account officers are on the run.

About $50m (N13 billion), were on April 12, recovered in both Naira and foreign currencies by the anti-graft agency at the Osborne Towers in Ikoyi, Lagos State. Even though the ownership of the large sum still remains a subject of controversy, it has been moved to the Central Bank of Nigeria for safekeeping, while being temporarily forfeited to the Federal Government.

Prior to this time, the EFCC had recovered an abandoned N49m at the Kaduna International Airport. Another $9.7m and £74, 000 were recovered from a building belonging to former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Andrew Yakubu, in Kaduna State.

Though he declined disclosing the total amount of assets recovered so far, spokesman of the EFCC, Wilson Uwujaren, told The Guardian that all liquid assets that are under interim forfeiture are deposited in a recovery account at the CBN, pending the determination of cases in courts.

He explained that when there is a final forfeiture order on an asset, the asset is returned to the victim of the crime. “But if the asset belongs to the state, then it is put in the Consolidated Revenue Fund and government can then use it as it pleases.”

Uwujaren, however, stressed that the agency does not handle any forfeited asset of any kind, adding assets that appear to be rotting away are under interim forfeiture and there is nothing the commission can do about them because the cases are still undecided.

“For instance, if you are being investigated or being prosecuted for corruption and your car was seized pending the determination of the case, the commission will not touch or sell it until the case is concluded.  The same goes for buildings,” he stated.

But in the case of businesses that are operational, the EFCC spokesman said that such businesses are left to run normally and the profits kept in a recovery account at the CBN. If the state wins the case, the business is sold and the proceeds kept in the Consolidated Revenue Fund for government’s use. “But such businesses are returned to the owners if they belong to individuals,” he added.

Uwujaren claimed that the commission was not challenged keeping record of seized properties as it has an up to date inventory of seized property across the country. He added that where it seems that some property are not being attended to, it means cases involving them are still pending in courts and there is nothing the commission can do, except wait for the matter to be decided.

EFCC’s Obduracy And Public Perception
DESPITE pressure from the National Assembly and Nigerians, the EFCC has refused to disclose exactly how much it has recovered in its anti-corruption fight. The biggest hint in this direction was when Magu said the commission had recovered billions and billions of naira.

This was when the Chairman, Senate Committee on Anti-Corruption and Financial Crimes, Senator Chukwuka Utazi, took him up on the issue at the recently held National Anti-Corruption Stakeholders Summit, which the commission hosted.

The lawmaker, who said that making such records available to stakeholders, especially the legislature, would ensure transparency, told the commission to carry out its anti-corruption fight with strategies and technical competence that are devoid of sensation of arrests, as well as media trial of suspects.

Human rights lawyer, Mike Ozekhome, who also spoke along this line a short while maintained that what the EFCC has been doing is mere loot recovery. “What EFCC and other anti-corruption agencies have been doing is mere loot recovery, and not fighting corruption. As they are recovering money, there is more corruption in the system because people who didn’t have the opportunity for corruption before now have it.

“We need to know the amount being recovered because there is the belief that recovered houses are sold to cronies at give-away prices,” he said. Chairman House of Representatives Committee on Financial Crimes, Kayode Oladele, told The Guardian in an interview that it would be dicey for the EFCC to disclose amounts recovered as proceeds of crime because most of the recoveries are under interim forfeiture, and could be returned to their owners depending on the outcome of the cases in court.

While maintaining that the commission can only declare recoveries under interim forfeiture within certain periods, he added that even doing so might spark sensationalism, because a lot of people might not understand the word interim forfeiture, and once the EFCC declares any amount, they will expect the commission to produce the money for immediate use by government.

“Most forfeitures are on interim basis, and section 20 of the EFCC Act states that any convict should forfeit the proceeds of crime to the Federal Government. This means there has to be conviction before there can be forfeiture. Meaning that any money under interim forfeiture cannot be used for anything. Likewise the many assets held under interim forfeiture,” Oladele explained.

The lawmaker, who said only the executive can determine what should be done with proceeds of crime said: “All agencies of government produce revenues; and proceeds of crime are treated as revenue because they were stolen from the government and now returned. All monies from government agencies go into the same pool, that is the Federation Account, and it is the responsibility of government to decide how to use all,” he explained.

On whether the EFCC has been transparent enough on the issue of disclosure of recovered assets, the lawmaker passed a vote of confidence on the commission, but said, “there is still room for improvement.”

Classic Case Of Forfeited Property Rotting Away
FORMER Enugu Governor, Chimaroke Nnamani, left office in 2007, after completing two terms of four years each. His departure heralded a floodgate of petitions to the EFCC, all alleging that he corruptly enriched himself while in office.

Among other allegations, he was said to have used part of the proceeds of crime to establish a telecommunications company- Rainbownet Nigeria Limited; a radio station- Cosmos 105.5 FM; a motor assembly company- Capital City Automobile (Nig) Limited; Renaissance University Teaching Hospital, as well as, various residential buildings and landed property in Enugu and other parts of the country.

Armed with these petitions, operatives of the commission swooped on the affected companies, sacked workers there and took over the administration of the outfits while the case was ongoing.

Unfortunately, the companies were run down before the case was determined on July 8, 2015.Justice Mohammed Yinusa, of the Federal High Court, Lagos, in his judgment convicted the four companies and ordered that their property be forfeited to the Federal Government.

The companies had on May 19, 2015 pleaded guilty to a 10-count amended charge brought against them by the commission, after allegedly failing to comply with lawful inquiry made by the commission.

Other assets forfeited to the Federal Government included property of Hill Gate Investment. They included plots H12, H13, H14, H15, H21, H116, and H118. Others are Plot 10, Plot H11, Plot H16, Plot H17, Plot H18, Plot H19, Plot 20 and Plot 49 among other undeveloped property/plots of land of Rainbownet Nigeria Limited in Enugu, Abakaliki, Aba, Owerri, Onitsha, Awka and Umuahia.

Aside the landed property, over N35m from frozen bank accounts of companies were also forfeited to the Federal Government. And since the assets were forfeited, the premises have become hideouts for men of the underworld, while animals have taken up residence in some of them.

Renaissance Teaching Hospital, located on Rangers Avenue, Enugu, which was almost completed before the commission sealed it off is overgrown with weeds. With its location in the heart of the town, it has succeeded in altering the aesthetics of Enugu, the state capital.

However, residents insist that the gigantic building could be put to good use in a manner that it would impact positively on the Internally Generated Revenue of the government, adding that it amounts to waste of public resources to allow the complex to continue to rot.

The situation is not different at Cosmos FM and Rainbownet, which were functional until they were sealed off by the anti-graft body. Apart from the many workers, whose jobs were cut short, several moveable items belonging to the companies are still strewn across the firms. These include vehicles, communication equipment, engines and many others.

A visit to the Ebeano Ogui Roundabout, where the offices are located, shows that the buildings are in dire need of repair works, as some of the roofing sheets are giving way.

Although under lock and key, it was reliably gathered that some of the items belonging to the companies have either been stolen or vandalised, even as a source claimed that a private security company was engaged to secure the premises.

The story is the same at the Capital City Automobile located on Okpara Avenue. The only visible thing in the compound taken over by weed is the gatehouse occupied by security operatives from a private security company.

Before now, vehicles of all kinds were sold in the spacious compound, while arrangements had been concluded to start an assembly plant. On the other hand, it was gathered that some of the residential houses were sold to their occupants, by the Federal Government. The same was said to have happened to the undeveloped landed property.

An Estate Developer, Chinedu Ugwu, while lamenting the rot at the property, called on government to find ways of bringing back life to the premises, as a way of boosting revenue and employment.

“You cannot imagine the level of waste and revenue loss these areas have experienced. I can tell you that I had a friend at Cosmos FM. He was an administration officer then. He lost his job and since then, has not got another. I believe that instead of forfeiting these businesses to the government and eventually shutting them down, they should have been allowed to run,
while proceeds are paid into government coffers and those working in them taken care of,” he said.

According to him, the buildings at their present rate could fetch billions of naira to the government due to their location, present state and spaces occupied. Only recently, the Enugu State government hinted that it would ask the Federal Government to release to the state, some of the property, stressing that they were procured with taxpayers’ money.

But it appears that the idea fizzled out as soon as it was muted as there was no follow up after the request was made. Enugu-based lawyer, Prof. Gab Agu, said management of contentious firms is a matter that the court should look into and see whether the EFCC is entitled to administer such or not because the “EFCC cannot seal off a property under investigation without authorisation of a court of competent jurisdiction. But these things go on because people don’t challenge them when they happen.

“In the case of immoveable assets like land, there is a Land Use Act, which stipulates that the governor has right over all lands. In this case, EFCC or the Federal government has no right over such without the consent of the governor.”

He continued: “I know that receivers have been appointed from time to time to manage such contentious property pending the determination of cases against them. In this regard, it is also their responsibility; especially for assets that are making money to maintain such while the matter lasts. However, our problem is that we go beyond certain pronouncements of the court to begin to do things our way. That is why a property will be under investigation, and those working in the place are sacked and the place is run down and eventually abandoned. I expect that people should challenge some of these things in court so that they will continue to add value to the system. It is to me a waste of public resources if these things are allowed to rot away simply because there is a case against it.”

Agu, a former Dean of Faculty of Law, Enugu State University of Science and Technology (ESUT), however, suggested that there was need for matters to be dispensed with as quickly as possible, to enable the proceeds be put to further use for the benefit of the state.”

John Nwobodo, another Enugu-based legal practitioner is of the view that the government should be blamed for the ugly state of some forfeited property, stressing that, “Once the court has given a judgment that a property should be forfeited to government, it becomes illegal for anybody to continue to administer the property. The state should step in and take possession of the property.”

He said it amounted to waste of resources and efforts to come to the court and ask that proceeds from looted public funds should be forfeited to the state and in the end, such ventures are allowed to rot away.

Senate Awaits EFCC’s Report Of Seized Assets
THE Senate Committee on Anti-Corruption is currently awaiting a comprehensive report of the total assets seized so far by the Economic and Financial Crimes Commission EFCC, even as the upper arm of the National Assembly is yet to get any bill from the executive arm granting the EFCC powers to retain five per cent of recovered looted funds.

The Senate committee explained that the report, which it sought from the EFCC three weeks ago, was meant to assist in determining the number and state of assets seized so far.

Utazi, who chairs the committee, declined to make further comments on the management of the assets when contacted, pointing out that until the comprehensive report gets to the committee, it would not make any public pronouncement on how seized assets were managed.

He said that the EFCC has already been asked to include in the comprehensive report, details of such as assets seized, assets forfeited, loot recovered and pending corruption cases.

For now, the committee has been advised by the Senate leadership to allow the investigation being carried out on the matter by the House of Representatives to be concluded before taking any further step in that direction.

It would be recalled that the House of Representatives adopted a motion last week directing its Committee on Financial Crimes “to carry out an audit of car dumps and inventory of other movable and immovable forfeited assets seized by the EFCC, to ascertain their conditions, current values and make recommendations to it within six weeks on how to prevent further decay and waste.”

Sponsor of the motion Benson Babajimi, who represents Ikorodu Federal Constituency of Lagos State, had in the motion informed his colleagues that the EFCC has seized several movable and immovable property and assets under interim orders of courts, in order to preserve the property/assets, and prevent them from being disposed of by the suspects while cases were being investigated or tried, a process should be in place.

“We are also aware that the EFCC maintains dump sites in various parts of the country where it keeps movable assets, while immovable assets are sealed off by the commission,” he added.

Babajimu, who expressed displeasure that several of these assets have been there for several years while some are already at various stages of decay, added “convinced of the need to avoid this needless waste of recovered property, which would otherwise have yielded so much needed revenues to the national treasury, there is the need to take some remedial steps.”



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