Newly leaked internal emails have revealed that members of the top management of oil giants, Shell, were aware that the money they paid for oil block OPL 245 in 2011 would go to Mr. Dan Etete, the former Nigerian oil minister convicted for money laundering, not the Nigerian people.
The emails, seen by Global Witness and Finance Uncovered, which has investigated and exposed the Malabu scam for six years, during which Shell has consistently denied any wrongdoing. The company claimed it only paid the Nigerian government.
The new leaked emails, however, have shown that Shell’s denial was anything but representative of what transpired.
Emails sent to Mr. Peter Voser, the then Chief Executive Officer of Shell, revealed that he knew the huge payment was headed Mr. Etete’s way. Other emails also showed that money was likely to go to former President Goodluck Jonathan and some of Nigeria’s most powerful figures, including National Assembly members.
Global Witness’ Sam Taylor described the Malabu Scam as one of the largest corruption scandals ever witnessed in the global oil industry. “This is one of the worst corruption scandals the oil industry has ever seen, and this is the biggest development so far. Today’s new evidence shows senior executives at the world’s fifth-biggest company knowingly entered into a corrupt deal that deprived the Nigerian people of $1.1billion. To put that in context, the payment for this deal is worth more than Nigeria’s entire health budget for 2016,” said Mr. Taylor.
Shauna Leven, Anti-Corruption Campaigns Director at Global Witness, said: “This is a huge scandal – it must trigger change. For too long, the world’s most powerful and profitable oil companies have masqueraded as leaders of responsible business, while robbing countries of their most precious assets. We could save countless lives across the world if ordinary people were able to benefit from the wealth of their own natural resources.
“Those responsible at Shell could go to jail for these decisions. The company and its individual decision makers, in this case, need to face justice. Law enforcement in Italy, Nigeria, the UK, the US, the Netherlands, and Switzerland need to cooperate to ensure that this happens.”
The corrupt deal, also featuring Italian company, Eni, Global Witness reckons, has had massive consequences for ordinary Nigerians, among whom five million currently face starvation, in a country where one in 10 children do not live to see their fifth birthday.
The money paid for OPL 245 is almost double of the amount the United Nations says is required to deal with the current famine crisis in Nigeria.
Shell’s decision to go along with the mega-bribery scheme, despite knowing it to be dodgy, Global Witness reckons, implied that the company duped its investors and exposed them to considerable risk as the block could be retrieved from the company. The pensions of millions of people in the United Kingdom, noted Global Witness, are invested in Shell.
In February 2016, law enforcement agents raided Shell’s headquarters as six countries have opened investigations into the transaction, an indication that Shell could lose the oil block. On 20 April, a court in Italy will commence hearings to determine whether Shell will face trial on international corruption charges. Should the court rule that charges should be filed, many Shell executives from the time the deal was executed may be tried in their personal capacity.
Worryingly for investors, Shell had already been charged in the United States of America for paying bribes to Nigerian government officials by the time the OPL 245 deal was being negotiated. Five months before the deal was concluded, the company had entered into a deferred prosecution agreement – the equivalent to being under probation – with the U.S. Department of Justice, which subsisted at the time of the conclusion of the negotiations.
This suggests that Shell may have breached the agreement by entering into a bribery scheme, a surprising development given the indifference of Shell’s senior executives to the serious sanctions hanging over the company.
Mr. Ben Van Beurden, Shell’s CEO since 2013, told Global Witness in 2015 that the payments for OPL 245 “morally OK” and “in accordance with the law of Nigeria and international practice”.
The recently leaked emails, however, contradicted his claims. In wiretapped phone call between Van Beurden and Shell’s Chief Financial Officer, Mr. Simon Henry, the CEO referred to “really unhelpful emails”. The wire-tapping was done by Dutch authorities. An email, copied to the then CEO Mr. Voser, stated: “Etete can smell the money. If at nearly 70 years old he does turn his nose up at nearly $1.2 bill (sic), he is completely certifiable. But I think he knows it’s his for the taking.”
Leven explained that more than 30 major economies, including the United Kingdom, Canada, Norway, U.S. and all E.U. countries now have laws requiring oil, gas and mining companies to disclose what they are paying any government on a project-by-project basis. If such laws had been in at the time of the OPL 245 deal, Shell would have been compelled to be transparent on what it was paying.
“It is highly unlikely that they would have wanted to do that. Shining a light on corrupt deals like OPL 245 prevents multinational companies from scheming with greedy government officials to get rich at the expense of ordinary people,” reasoned Leven.Shell, however, has maintained innocence. A spokesperson
Shell, however, has maintained innocence. A company spokesperson was quoted by Finance Uncovered as saying there is no fact to warrant the prosecution of former or current Shell employee.
“Given this matter is currently under investigation, it would be inappropriate to comment on specifics. However, based on our review of the prosecutor of Milan’s file and all of the information and facts available to Shell, we do not believe that there is a basis to prosecute Shell.”
“Furthermore, we are not aware of any evidence to support a case against any former or current Shell employee,” Financial Uncovered quoted the spokesperson as saying.
The spokesperson added that in the event that Mr. Etete’s company is found to have paid bribes relating to the OPL 245, such payments were made without the knowledge of, authorization or on behalf of Shell.
Eni also denied any wrongdoing. The company was quoted by Global Witness as saying it is inappropriate to discuss the merits of the allegations against it, as proceedings are still pending.
It, however, claimed that the allegations contain many inaccurate statements and mischaracterizations. None of the contracts relating to the 2011 transaction, Eni said, was executed secretly or designed to conceal transaction of any of the parties involved.
Shell and Eni said they commissioned separate, independent investigations, which identified no illegal conduct.
However, Eni claimed that the transaction with the Nigerian government was executed without intermediaries.
In January, former President Jonathan, in a statement, said he was not accused, indicted or charged for corruptly collecting any monies as kickbacks or bribes in the OPL 245 affair.
Last week, a report on the transaction alleged that former President Jonathan, former Attorney-General of the Federation, Mohammed Bello Adoke (SAN) and some members of the National Assembly may have received about $400m from the $1.1billion paid by oil giants Shell and Eni, into a Federal Government Escrow account. A former Russian Ambassador and intelligence officer, Mr. Ednan Agaev, was quoted as saying this while speaking with officials of the Federal Bureau of Investigation in the United States as well as Italian prosecutors, according to a report by an American news website, Buzzfeed.
Mr. Agaev’s testimony has since been tendered as evidence in an Italian court, where Messrs. Adoke and Etete have been charged.
According to the court documents, Mr. Agaev, who worked as a middleman between the oil companies and Mr. Etete during the negotiations for the Malabu deal, told the FBI and Italian prosecutors that Mr. Etete told him he needed to pay $400m in bribes to senior Nigerian officials and parliamentarians.
“Agaev was asked about payment of his commission. Agaev stated that he went to Etete and told him to pay him $65,000,000. Agaev stated that Etete said, ‘I can’t pay you, I have to pay Adoke [Mohammed Bello Adoke, then Nigeria’s attorney general] $400m and all the other people in the Senate and the National assembly.’ Agaev stated that he would think President Goodluck Jonathan got at least $200m of this money,” stated the court documents.
In a follow-up interview with Italian authorities, Mr. Agaev repeated his allegations. “I said that if it’s true, that he paid, he had to pay $400milion, I assume that at least $200million went to Goodluck,” he said.
The Malabu Oil scandal involves the $1.1billion paid by oil giants, Shell and Eni, to Federal Government accounts in 2011 for OPL 245, which is said to hold reserves of about 9.23 billion barrels of oil.
The OPL 245 was said to have been bought by Mr. Etete under questionable circumstances in 1998 when he was the oil minister. Mr. Etete was said to have bought it for a fraction of its actual value. However, it was revoked by the Olusegun Obasanjo administration.
During the Jonathan presidency, in 2011, Mr. Adoke brokered a deal for the sale of the OPL 245, acting as a middleman between Shell and Eni on the one hand, and Mr. Etete’s company, Malabu, on the other.