The federal government is seeking documents from 10 banks, including Citigroup Inc. and JPMorgan Chase & Co., in a bid to overturn a $9.6 billion arbitration award related to a gas supply deal that the country alleged is shrouded in corruption. Bloomberg reported that the federal government has asked a Federal Court in New York for permission to subpoena information about transactions involving government officials, including former President Goodluck Jonathan.
The politicians were in office when the state signed a contract with Process & Industrial Developments Ltd (P&ID) and later became involved in a costly dispute with the company.
“There is good reason to believe that ministers at the highest level were involved in a corrupt scheme to steal money from Nigeria,” Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami (SAN), was quoted as saying in court filings submitted on March 24.
Nigeria’s chances of annulling the giant penalty hinge on proving the 2010 gas supply arrangement was a sham designed to fail by P&ID and government officials.
The saga became a full-blown crisis for Nigeria last August when a U.K. judge ruled P&ID could enforce an arbitration tribunal’s 2017 ruling, now totaling $9.6 billion, including interest, which found the country breached the agreement.
A spokesman for P&ID denied wrongdoing, saying Malami has “manufactured a claim of fraud and bribery” to evade the state’s legal obligation to pay what amounts to about 30 per cent of the country’s foreign reserves.
Malami’s application is “nothing but an absurdly overbroad fishing expedition,” P&ID said in an April 24 court filing.
However, Jonathan has not been informed of the application, his spokesman said.
Malami didn’t respond to a request for comment about the court proceedings when contacted by Bloomberg.
But the federal government is seeking the bank documents as part of an internal investigation into the contract and the arbitration proceedings.
The findings would form the basis of the U.K. appeal.
P&ID “had no ability or intention of ever performing” the contract, which required the company to build a gas processing plant and the government to supply it gas, Malami said.
Nigeria wants the US court’s permission to obtain information from the banks relating to companies and individuals affiliated with P&ID, as well as former government officials, to aid the ongoing investigation by the Economic and Financial Crimes Commission (EFCC).
The 10 institutions are likely to have processed U.S. dollar transactions connected to P&ID’s operations, as either correspondent banks or the New York branches of foreign lenders, the filings said.
United States’ District Judge, Lorna Schofield, allowed Nigeria to send copies of its application to the banks, eight of which had been served by April 15, according to filings.
The court, however, hasn’t decided whether to give Nigeria access to the financial documents.
The country’s request may run into opposition from the banks.
JP Morgan was said to have complained in a court filing that it has “substantial concerns about the breadth of the proposed subpoena.”
The federal government is seeking documents from lenders, including Citigroup and JPMorgan, as well as the New York branches of Deutsche Bank AG and United Bank for Africa Plc.
Citigroup and Deutsche Bank declined to comment on the case, while JPMorgan and UBA didn’t respond to emails and calls.
EFCC is probing the roles of two former oil ministers, late Dr. Rilwan Lukman and Mrs. Diezani Alison-Madueke, according to Nigeria’s court filings.
Lukman allegedly signed the contract while Alison-Madueke was accused of “flagrant mishandling” of the government’s arbitration strategy until 2015, the federal government said.
However, EFCC has not yet found “direct evidence” the politicians received payments from P&ID or its affiliates, the country said in its court filings.
Malami’s application “is wild speculation and no evidence exists” to back it up, P&ID said.
A lawyer for Alison-Madueke, in a separate EFCC investigation, said he had not been briefed on the government’s application to the US court, while another lawyer for the former petroleum minister did not respond to calls and messages.
Although Malami did not mention Jonathan as a subject of the EFCC probe, the former president appears alongside the ex-ministers in Nigeria’s proposed subpoenas.
The request includes “all documents, concerning any transactions to, from, or for the benefit” of Jonathan and his wife between 2009 and the present day.
Reacting to the report that the federal government has subpoenaed bank records for former President Jonathan and his wife, Mrs. Patience, in the United States of America, the former president said in a statement yesterday that he has no account or property abroad.
The statement issued by his spokesman, Mr. Ikechukwu Eze also stated that the federal government did not contact Jonathan or his wife before issuing these subpoenas, adding that if the government had contacted them, the former Nigerian leader would have advised the government “that you cannot subpoena what does not exist.”
The statement also recalled that on March 5, 2014, during the swearing-in of new ministers, the then President Jonathan said: “I am loyal to Nigeria’s economy. I don’t have accounts or property abroad.”
“We are confident in stating that between that time and now, nothing has changed with regards to Dr. Goodluck Jonathan. He has no accounts in the United States of America, and encourages US authorities to cooperate fully with the Federal Government of Nigeria’s subpoena.”
The statement also recalled that during his tenure as President of Nigeria, Jonathan “extended every courtesy to former Presidents and Heads of state, because he believed and still believes that promoting, projecting and protecting Nigeria’s sovereignty and image is the paramount duty of her government, because it is not possible to belittle Nigerians without belittling Nigeria.”
“Finally, we state that the signing of the P&ID contracts preceded the Jonathan administration, and that government gave appropriate counsel to the incoming government in the handover notes of 2015, which advice, if carried out, would have prevented the current unfortunate circumstances,” the statement added.