ANEEJ CASE STUDY ON PROSECUTION OF FUEL SUBSIDY CORRUPTION CASES

CASE STUDY 1 FOR J4A
INTRODUCTION
The management of Petroleum Support Fund (PSF), also known as fuel subsidy is fraught with monumental corruption and many Nigerians have been fingered in the fraud but none of such persons or companies has been successfully prosecuted or sanctioned, given that most are powerfully connected with political leaders. This culture of impunity has encouraged the sustenance of such malpractice to the detriment of Nigerians. The sudden removal of subsidy from fuel in January 2012 evoked demonstrations in many parts of the country. A nationwide strike which lasted over two weeks crippled the economy in a bid to pressurise government to reverse its harsh policy.
The House of Representatives Ad Hoc Committee set up in response to these protests and agencies of the Federal government undertook a number of investigations. In 2012, a number of official reports were published by both the National Assembly and other government agencies, which accused Oil Marketing and Trading Companies (OMTs) of fraudulent activities as well as criticising the general administration of the PSF. The reports also unearthed mind-boggling findings including widespread corruption and mismanagement in the operations and activities of the Nigerian National Petroleum Corporation (NNPC) and other subsidiaries. The reports as well found out that payment of fuel subsidy to oil marketers was inflated and several marketers got paid for doing nothing and expenses charged to the subsidy account. The heat generated by the January 2012 uprising and the revelations made by the various reports, increased Nigerians understanding of the magnitude of the fraud that characterized the operations of NNPC and particularly, the management of fuel subsidy.
As it stands, the Federal Government has acknowledged both institutional and system weaknesses in its management of the oil subsidy and oil industry at large. Certain steps were taken to restore the people’s confidence. The management of the NNPC was dissolved and principal officers sacked. It went ahead to set up five committees to among others: mainstream good governance into the sector; and re-package an executive Petroleum Industry Bill (PIB) for accelerated consideration by the National Assembly. The numbers of marketers involved in the importation of petroleum products were reduced drastically.
Nigeria’s president set up a presidential committee in July, 2012 to verify and reconcile the findings of the technical committee. The Presidential Committee on Verification and Reconciliation of Fuel Subsidy Payments examined evidence and called witnesses between August 24, 2012 and November 14, 2012. The committee also appointed an auditor, Ernest & Young, to scrutinise all fuel subsidy payments made during 2011.
Since 2012, the EFCC and the Special Fraud Unit has retrieved more than N5 billion taken from oil subsidy, while over 40 suspects are now being prosecuted in court for the offense including several oil marketers and their companies, 1 government official and 1 accounting firm. Interestingly, to date not one single individual or company has been convicted by the prosecuting agencies. Prosecutions have been hampered due to a number of issues including the presentation of inadequate evidence, procedural errors.
AIM OF THE CASE STUDY
The aim of this case study is to gather and collate the facts of the case involving Ontario Oil and Gas Limited, including the investigation, prosecution, defence and judgment (if any), and examine the conduct of case administration and other technical issues. It is hoped that the success factors, key issues and lessons learnt will help to inform ongoing and future investigations and prosecutions.
This case study is intended to describe a fuel subsidy corruption cases that has been successfully concluded, but since there have been no successful prosecutions to date, the study now examined one of the ongoing cases and illustrated different issues faced by investigators and prosecutors, the strategies, tactics and hurdles, what worked and what could be improved.
METHODOLOGY
The methodology applied to accomplish this case study involved the identification and selection of one of the cases from among the cases that are being prosecuted in court. Several documents including ANEEJ reports, media reports, EFCC reports among others were reviewed. Some persons including staff of the EFCC, civil society activists, legal practitioners among others, were also interviewed
CASE DETAILS
Case No: ID/115C/2012
Company: Ontario Oil and Gas Limited
Defendants: Walter Wagbatsoma; Adaoha Ugo-Ngadi, Fakuade Babafemi Ebenezer; Ezekiel Olaleye Ejidele
Court: Lagos State High Court, Ikeja
Trial Judge: Justice Habeeb Abiru and later Justice Okunnu
Prosecution: The Economic and Financial Crimes Commission (EFCC) and the Federal government of Nigeria
Prosecution Counsel: Rotimi Jacobs
Counsel to the Defendants: Babajide Koku (SAN), Wale Akanni (SAN), A.A Badejo (SAN) and J.J Ogunyemi.
Charge: 9-count charge of obtaining property, false pretence, altering documents, forgery and conspiracy. The suspects were alleged to have fraudulently obtaining the sum of N1,959,377,542.06 from the Petroleum Support Fund for a purported importation of 39.2million litres of Premium Motor Spirit.
PROGRESS REPORT
The case has come up for hearing about 5 times as the EFCC initially arraigned the defendants before the court in 2012. The defense counsels argued that their clients be granted bail. Justice Abiru, after listening to all these arguments, granted all the accused persons bail. The first defendant (together with Ontario Oil & Gas Nigeria Limited) received bail in the sum of One hundred and fifty million naira (N150, 000,000.00), and three sureties in like sum; two of whom must have landed properties in Lagos and must all be resident in Lagos The case was subsequently adjourned August 24, October 6, 7 and November 8, 2012 for commencement of trial.
On resumption of trial, the defence counsel ask for an adjournment because they just received additional documents attached to the proof of evidence which they will need time to study. The Judge obliged and the matter was adjourned again. Before the next trail date, the defendants had, through their counsel, made a no-case submission before the court.
On resumption of hearing, both parties made their case for and against the no case submission. The application for a no-case submission was consequently thrown out on the grounds that enough has been said and put before the court by the prosecution, to warrant at least an explanation and answers by the defendants. According to Okunnu “it is only when there is nothing linking the accused to the crime committed that it becomes unfair to put the accused through the trial. Justice Okunnu then adjourned the case to November 26th, and 28th, 2014 as well as January 12, 13, 14, 20 and 21, 2015, for continuation of trial.
The Prosecutor’s Frustration
From the EFCC point of view, the investigation and prosecution of fuel subsidy corruption cases have not been too easy for the commission given the king of people involved in the cases. In a single case, you sometimes have up to five Senior Advocates of Nigeria as defense counsel, while the EFCC does not have the resources to engage such services.
The EFCC has also observed that the defense lawyers have so far been employing several delay tactics by way of frivolous motions and sometimes non appearance of suspects in court during trial, so that the cases have dragged on for such a long time.
Some of the suspects after being granted bail fail to appear in court afterward and some even travel abroad. For instance, Mr. Wagbatsoma has not written any statement or appeared before the agency even though he was listed as one of those to be arraigned by the EFCC.
The Position of CSOs
• Some CSOs mentioned that there seem to be lack of political will on the part of the government to follow up with the cases, others opined that the matter does not concern political will that it is just the slow pace of the justice delivery system in Nigeria.
• The Anti-corruption Agencies should take their time to do a thorough investigation before arrest and arraignment.
• In order to avoid pressure from the masses, the ACAs should feed the public with information on the progress in these cases.
RECOMMENDATIONS
Some of the evidence that comes with some of these cases are not what the court can use to convict the suspects, therefore, the Economic and Financial Crimes Commission should do a water tight investigation before approaching the court for trial as there are indications that loop holes exist in the way some of the cases were investigated and are also being prosecuted.
The fight against economic and financial crimes should be mainstreamed into electioneering debate by getting aspirants (especially the presidential and National Assembly candidates) to make commitment on how they will support the fight against corruption in Nigeria, particularly, the speedy prosecution of fuel subsidy cases and other corruption cases and other financial crimes.
The Economic and Financial Crimes Commission Act of 2004 should be amended to create Special Courts that will speedily try Fuel Subsidy Corruption cases and other financial crimes.
The Nigeria Bar Association, civil society organization and noted legal practitioners in Nigerian should and the general public should consider engaging in public interest litigation on behalf of Nigerians to ensure that those who illegally enrich themselves with public funds do not escape justice.
The Nigerian Bar Association, other Civil Society Groups and even individual lawyers should immediately provide Prono Bono Services to the Economic and Financial Crimes Commission (EFCC), to fortify the prosecution team.
The Federal government should urgently resolve the ongoing dispute between her and judicial workers, so that hearing on the fuel subsidy corruption cases can proceed unhindered. Areas that could lead to further dispute in the judicial sector should also be fully addressed such frequent strikes by judicial workers are put to check.
A platform should be created by the federal government where judges, EFCC prosecutors and management team of ACAs and the Ministry of Justice can come together to work out how these cases can move faster.
The Economic and Financial Crimes Commission should do a water tight investigation before approaching the court for trial as there are indications that loop holes exist in the way some of the cases were investigated and are also being prosecuted.
Civil Society Organsations monitoring the fuel subsidy corruption cases should liaise with the CSO desk at the EFCC to receive progress reports on prosecution of cases and widely disseminate such information among the public.
EFCC to ensure its website is active and up-to-date and to incorporate an interactive feature where the public can contribute to the discussion and/or issue on fuel subsidy corruption.