New York [RR] ABUJA– A principal and knowledgeable source within the Jonathan administration indicates that the sudden “quantum-leap” in the payment of oil subsidy payments was not a mistake. “The President knew about it” said the source who explained that fake submissions for oil subsidy payments were approved and disbursements were made – and the monies were used towards financing the President’s election of 2011.

On the afternoon of January 11, 2011, two days to the Peoples Democratic Party [PDP] presidential primaries at the Eagles Square in Abuja, the source, pointed to the huge ["staggering"] amount withdrawn from the Central Bank of Nigeria [CBN] for “classified” expenditure. The sum withdrawn, according to the source, was in excess of N150billion.

[PHOTO: Jonathan]

The money was withdrawn for use against the threat posed by the PDP opponent [Abubakar Atiku] to President Jonathan. Atiku was said to be in a critical race against the president for delegates. The Jonathan campaign had received intelligence the Atiku campaign reached out to 3000 delegates and had disbursed the sum of $3000 to each delegate in exchange for their votes [3000 delegates would give Atiku the victory over Jonathan]. In reaction, the Presidency had to raise immediate ‘cash’ to avert what would appear an embarrassing loss. Within 24hours, the President’s campaign team raised the booty on Atiku – by offering each of the 3000 delegates $7000 in exchange for their votes – an equivalent total of $21million [N3.381billion]. The $7,000 was paid in foreign currency and an additional amount of N250,000 in local currency was handed to each of the 3000 delegates for “hotel and transport” costs – equivalent to a total of N750million. On the night of January 13, 2011, on the day of the PDP presidential primaries, the sum of N4.13billion [N750million + N3.381billion] was disbursed by the Jonathan campaign. And so victory was secured.

Following the victory at the Eagles Square, the President’s campaign re-focused its attention to consultations [taming] with political groups within the North who were unhappy with Jonathan’s candidacy and believed that President Jonathan should have stepped down for a northern candidate – in line with the zoning agreement previously reached by the party. For this, the president’s men made extensive consultations with each of the Emirs in Northern Nigeria and with other leaders of thought in the north. Confidential information available to 247ureports.com reveals that the consultation exercises, by the end of January 2011, cost the President’s campaign an excess of N500million.

The Jonathan campaign took an interesting turn as it entered February 2011. A fleet of private Jets was leased from four major carriers -King Airlines, Wings Aviation, Top Brazz and Overland – for use towards the national campaign. The normal charge for per hour of each aircraft was $6000 per hour – and the Jets operated at 70 hours per week. The Jonathan campaign paid the rate of $10,000 per hour – for the period of 10weeks – equating to an amount of N100million daily – totaling to an equivalent of N10.5billion for the said period.

Then came the February 14, 2011 billionaires meeting where the 28-member Presidential Campaign Council [PCC] was set up at the Eko Hotel in Lagos. The billionaires consisted of Aliko Dangote, Otedola, Adenuga, Elumelu, Jimoh Ibrahim, Emeka Offor, Kasim Bukar, Sayyu Dantata, Jim Ovia and others. And as the PCC which was primarily tasked with raising funds for the campaign began work in February of 2011, the oil subsidy requests for payment also began to experience a quantum leap from the budgeted N245billion to N1.7trillion.

Interestingly, the Petroleum Resources Minister, Mrs Allison Madueke and the Finance Minister, Mrs Okonjo Iweala while testifying before the House of Representative Committee investigating the Oil Subsidy funds management indicated that the amount disbursed as at February 2011 was N245billion – and that begining from March 2011 the amounts submitted for approval suddenly surged.

Explaining the surge, the source pointed to the personalities within the 28-member billionaire PCC as directly responsible for the surge from N245billion to N1.7trillion. According to the source, shortly following the formation of the PCC, Sayyu Dantata, a member, through his company, MRS Oil submitted a N225billion oil subsidy request for payment, Femi Otedola, through his company, AP, submitted a N105billion oil subsidy request for payment, a ‘mysterious’ construction company by the name Pinnacle Construction also submitted a claim for N300billion – during the same period.

It was during the same period that Stella Odua Ogiemwonyi who was one of the leaders in the Jonathan campaign organization filed a claim that she had spent her own personal money to the tuned of N5billion – for the maintenance of the campaign secretariat. Stella Odua Ogiemwonyi is the Chief Executive Officer of Sea Petroleum and Gas. Interestingly, her company submitted claims for oil subsidy payments in excess of N5billion. Her claim was approved and paid.

Cursory inquiry confirms that a significant percentage of the claims submitted by the members of the PCC were fraudulent. The fraudulent oil subsidy claims freed the President’s ability to spend in a manner deemed unprecedented by informed experts.

On March 16, 2011, the campaign released N55million to a media company [name withheld] for a single advertisement slot. By March 31, 2011, the campaign paid N7.3billion in advertisements. On March 28, 2011, it donated one car and one bus to each of the 36 chapters around the country and the FCT – along with a cash donation of N14million to each chapter [totaling N518million]. In monetary terms, its equates to a little over N1billion. Between April 12 and April 15, 2011, the campaign disbursed N107billion.

When approached regarding the sourceof the exobitant spending, the Director of the Neighbor to Neighbor Initiative [the main NGO funding and managing the Jonathan campaign], Mr. Mike Omeri stated the donations came from online contributors.

Comparing the yearly trendings of the oil subsidy claims submitted from 2006 to 2011, highlights the anomaly in the oil subsidy claims between March 2011 and August 2011. In 2006, subsidy claims was submitted for 26.9million liters of petrol for the amount N200billion, in 2008, subsidy claims was submitted for 33.4million liters of petrol for the amount N630billion, and for 2010, subsidy claims was submitted for less than 33million liters of petrol for a little over N600billion.

How Jonathan mis-managed Nigeria in 2011

Wednesday, 18 January 2012

IT was revelation galore on Tuesday at the on-going House of Representatives ad hoc committee probing the actual subsidy on fuel as stakeholders exposed how the Nigerian National Petroleum Corporation (NNPC) has been handling the nation’s oil resources without due process and transparency.

Minister o f Petroleum Resources, Mrs. Diezani Allison Madueke, who appeared before the House of Representatives ad-hoc committee investigating the management of funds spent of fuel subsidy, has said the exorbitant amount spent on subsidizing petroleum in 2011 was due in large part to payments on Kerosene subsidy.

“The 1.3 trillion represents both PMS and Kerosene together,” Madueke said in her presentation. The Petroleum minister explained the payments of kerosene subsidy in arrears “created the spike last year”.

In her presentations she said the NNPC was trying to recover the 2008 and 2009 arrears, which it had until then “carried solely”. The payments from both year amounted to N250bn, and additional current payments on kerosene subsidies brought the figures to slightly over N300bn.

“The Kerosene subsidy, which was fairly high, was based on a price of N50 per litre, which as you may recall this honourable house insisted we maintain at all times. We did our best to maintain it officially,” Madueke said.

Further explaining the N245billion budgeted for subsidy payment in 2011, the Petroleum minister said that amount had been put in the budget for a period of two months since the federal government had high hopes for subsidy removal.

“That was because at the time, it was calculated on the basis that deregulation was expected to have taken off there after… of course that did not happen.”

Madueke added that the authorization of payments on subsidy was the responsibility of the ministry of finance, not the ministry of petroleum and could therefore not provide further clarity on how the funds were dispensed.

The hearing continues for a third day on Wednesday, 18 January and the minister of finance Dr. Ngozi Okonjo-Iweala is expected to appear before the committee on Thursday, 19 January.

The Nigeria Customs Service (NSC), through its Deputy Comptroller General in charge of tariff, Mr Julius Ndubuisi, has also testified declared that all the fuel importation into the country by the NNPC was without valid documents as required by the law of the land.

The Customs chief further revealed that the NNPC had been importing crude oil into the country to service the Kaduna refinery and had not been paying the required duties to the service.

Apart from this, Ndubuisi alleged that all the “mothers’ vessels” that bring fuel into the country normally berth in the neighbouring countries, as their manifests bear ‘Offshore Cotonou,’ ‘Offshore Lome,’ thus making it impossible for the service to know the contents of the products and their countries of origin.

According to him, “smaller vessels are normally used by the NNPC to bring the fuel into the country. We neither board nor rummage the vessels. The products come into the country without the normal form ‘M’ from the Central Bank of Nigeria, to back up the importation, no invoices. What we have is only bill of lading.”

He lamented that NNPC, which was initially paying N3 per litre and later N1.50 kobo per litre as duties to the customs stopped paying since 2002, based on a circular from the Federal Ministry of Finance that t he Customs should stop collecting duties on imported fuel, saying that this had led to the loss of about N46 billion revenue, which should have been remitted to the Federation Account.

He equally said that the service was not in anyway connected with the verification and payment of fuel subsidy and was in the dark about the documents being used by NNPC in processing the fuel subsidy claims.

He said that attempts by Customs to make the NNPC to follow due process on importation and exportation of fuel had met stiff resistance, as the NNPC usually claimed that following the rules to the letter would cause fuel crisis in the country.

Ndubuisi, who declared that Customs had all relevant documents to back up its claims against NNPC, advised that the only way out was for the lawmakers to invite the Nigeria E xtractive Industries Transparency Initiative (NEITI), to carry out forensic audit of all vessels bringing fuel into the country so as to know the exact quantities that were imported.

Speaking in the same vein, chairman of NEITI, Professor Asisi Asobie declared that the audit report carried out by the agency on NNPC showed that the operations of the corporation lacked transparency and due process, saying that payments for fuel subsidy ought to be made only on the approval of the Accountant General of the Federal, based on the approved price by the Petroleum Products Pricing Regulatory Agency (PPPRA), as against the current practice where NNPC normally deducted directly from the domestic crude oil proceeds before remitting the rest to the Federation Account.

In her own submission, the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, while clai ming that there was no cabal in the sector, declared that there were sharp practices and manipulations in the importation of fuel into the country by some operators.

In their own submission, both the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) said they could not present any submission on the matter as they were not with the relevant documents at the time they were coming to the public hearing.

However, the chairman of the ad hoc committee, Honourable Farouk Lawan lamented that the shocking revelations emanating from the public hearing were damning and disturbing and had showed clearly that the country was being short-changed due to manipulations and disregard for the law of the land.

Consequently, he announced the committee’s resolve to summon both the Minister of Finance, Mrs Ngozi Okonjo-Iweala and her Petroleum Resources counterpart, as well as other relevant stakeholders, to shed more light on who authorised the payment of over N1.3 trillion as against the N255 billion budgeted for subsidy in 2011.

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