Nigeria’s Armsgate scandal

Introduction

Most corruption in arms procurement takes the form of bribes or kickbacks. In return for being awarded an arms contract, often as a result of having selection criteria manipulated in its favour, the supplier company pays bribes to officials involved in the decision-making process. Payments typically are channeled through an in-country middleman or agent.

But why be satisfied with bribes or kickbacks equaling 10% of the value of a contract when you can take the whole lot? In countries where oversight of military funds is at its weakest, or indeed non-existent, top officials and military officers have essentially free reign over how money is spent. In such circumstances, those in charge can simply misappropriate funds directly, possibly with the thin cover of a fake contract for non-existent equipment.

In Nigeria, this practice is called simply, “stealing”, and it appears to be a far more significant phenomenon than mere bribery. Such was the case with Nigeria’s ‘Armsgate’ scandal broke in 2015 when a government-appointed independent investigation revealed a series of arms ‘deals’ in which Ministry of Defense funds were transferred to private accounts and no arms were procured. Rather than corruption, these ‘deals’ are more accurately classified as theft. The scandal, which is still unfolding, involves the alleged theft of at least USD 2.1 billion, and possibly as much as USD 15 billion of extra-budgetary funds between 2007 and 2015 intended for weaponry to aid the government’s efforts to defeat the insurgent group, Boko Haram. The deals allegedly benefitted a number of senior military officers, politicians, government officials, and businessmen, and their families

Key facts

Buyer country: Nigeria

Sellers: Various real or fake Nigerian companies, especially Societé d’Equipements Internationaux

Year of procurement decisions: 2007-2015, but mostly after 2012.

Equipment sold: Mostly fake contracts for equipment that was never delivered. Largest contract was for 4 Alpha jets and 12 helicopters, also never delivered.

Value of contracts: Unknown. ‘Extra-budgetary interventions’ between 2007 and 2015 totaled between USD 4.5 and USD 7.2 billion, but other contracts from budgetary funds may also have been involved. Initial investigatory committee studies contracts amounting to over USD 19 billion.

Sum involved in corruption allegations: At least USD 2.1 billion, possibly as much as $15 billion.

Dramatis Personae

Goodluck Jonathan, President of Nigeria (2010 to 2015), who appointed Sambo Dasuki as National Security Advisor.

Mohammadu Buhari, President of Nigeria since 2015, who ordered the Armsgate investigations.

Colonel (retired) Sambo Dasuki, National Security Advisor under Goodluck Jonathan, from June 2012 – July 2015. The lynchpin. Indicted by an investigating panel in November 2015, arrested 1 Dec. 2015. On trial for stealing USD 2 billion in phantom arms contracts for 12 helicopters, 4 fighter jets and ammunition.

Bashir Yuguda, former Minister of State Finance (2014-15), arrested 1 Nov. 2015. Charged 14 Dec. on 19 counts of fraud, money laundering and criminal breach of trust.

Air Chief Marshall Alex Badeh (retired), former Chief of Defence Staff, arrested Feb 8th 2016.

Chief Raymond Dokpesi, owner of a Lagos-based private TV station, arrested 1 Dec. 2015.

The arms deals

The transactions involved in the Armsgate scandal took place under the rule of People’s Democratic Party (PDP) government of Presidents Umaru Yar’Adua, who ruled from 2007 until his death in 2010, and Goodluck Jonathan, his Vice President, who took over upon Yar’Adua’s death, and subsequently won reelection in 2011.

At the center of the web of corruption is Colonel Sambo Dasuki, Jonathan’s National Security Advisor (NSA) from March 2012 to March 201. Dasuki effectively controlled military procurement during his period in office with no supervision and virtually no input from the Ministry of Defence.

The first public details of Armsgate were presented in the interim report of a government-appointed investigative panel on November 17, 2015. The numbers contained in official public statements on the report are somewhat ambiguous , due to the use of multiple currencies and what appear to be overlapping sums of money, but by any reading expose massive fraud in arms procurement. The report stated that between 2007 and 2015, there had been ‘extra-budgetary interventions’ for arms procurement totaling 643.8 billion naira, and that the ‘foreign currency component’ was USD 2.2 billion. These appear to be two separate sums involved in the corruption scandal, as over the period in question, the naira was never below 200 to the US dollar. Thus, the total value of these ‘extra-budgetary interventions’ would have amounted to somewhere between UDS 4.5 billion and USD 7.2 billion, depending on the timing of the naira transactions and the exchange rate at the time.[1]

However, very little actual arms procurement resulted. According to the report:

“The committee also observed that of 513 contracts awarded at USD 8,356,525,184.32; 2,189,265,724,404.55 naira and EUR 54,000.00; Fifty Three (53) were failed contracts amounting to USD 2,378,939,066.27 and 13,729,342,329.87 naira respectively.”

Thus, according to the report, around USD 2.5 billion worth of ‘failed contracts’—that is, contracts for which no goods or services were delivered—occurred between 2007 and 2015. The total value of contracts awarded—which amount to at least USD 19 billion—is clearly far higher than the extra-budgetary interventions. Hence, it would appear that the figures for failed contracts relate to all contracts, from both budgetary and extra-budgetary sources, and including regular contracts for goods and services as well as for arms.

According to the report, Dasuki awarded ‘fictitious and phantom contracts’ worth USD 1.7 billion for the procurement of 4 Alpha jets, 12 helicopters, bombs and ammunition, which were never delivered. Most of the value of these contracts went to just two (unnamed) companies, despite, as the report notes, their previous record of non-performance.

Moreover, the NSA directed the Central Bank of Nigeria to transfer USD 132 million and EUR 9 million to the accounts of a Nigerian company, Societé d’Equipements Internationaux (SEI), without any contracts to back them up.

The total amount stolen remains uncertain. In early May 2016, Nigeria’s chief anti-corruption body, the Economic and Financial Crimes Commission (EFCC) reported that a previously-quoted figure of USD 2.1 billion related to just one transaction, and in total USD 15 billion had disappeared. If correct, this would be almost as much as the total official Defence budgets between 2007 and 2015. It was also said to equal half Nigeria’s foreign currency reserves. However, no further details of this figure have been produced.

The beneficiaries of Armsgate, as well as Dasuki himself, appear to have included a large number of senior military officers, politicians, government officials, and businessmen, and their families.

The mechanisms of corruption appear to have depended on a complete absence of oversight of funds within the military apparatus. According to one observer, the rot truly began when Dasuki’s predecessor as NSA, General Andrew Awoye Azazi (retired, now deceased), appointed by Jonathan in October 2010. Although, previously the MOD itself was hardly a model of probity, under Azazi’s tenure as NSA, the office started to usurp the MOD’s job of conducting procurement, apparently with Jonathan’s approval. The ready justification of fighting Boko Haram allowed the government to effectively write blank checks for funds, supposedly for arms purchases, which could then be diverted into private bank accounts. When Dasuki took over as NSA, contracts could be signed and funds allocated without detailing tenders, competitions, proper accounting, or indeed any actual acquisitions to show for the contracts. In some cases, as noted above, funds flowed without even the formality of a contract. The financial rewards could therefore be freely shared out between Dasuki, other officers and officials approving the fake deals, and heads of real or paper companies to whom contracts were awarded. It appears that the Central Bank of Nigeria collaborated in the plunder, approving large transfers of funds to individuals and companies on the say-so of Dasuki or other individual senior officials.

Investigations (ongoing)

Perhaps the most surprising thing about Armsgate is that it came to light at all. Nigeria’s powerful military, which ruled the country for many years, had hitherto been effectively immune from investigation and prosecution for corruption. A few years ago, if one looked at the website of Nigeria’s Economic and Financial Crimes Commission (EFCC), one would find plenty of cases of prosecution of state Governors, ex-ministers, civil servants, business people, even police, for corruption, but none of military officers or Ministry of Defence officials. President Muhammadu Buhari, elected in 2015 on an anti-corruption platform, appears to have broken with this pattern of impunity.

The background to the investigations that revealed the Armsgate scandal was the repeated failure of the Nigerian army in fighting the Boko Haram insurgency in the country’s northeast, with soldiers frequently running away rather than fighting. Troops and local commanders regularly complained that they lacked even basic equipment, and were indeed often outgunned by Boko Haram, despite large amounts of money supposedly spent on arms procurement. After initial denials of a problem, senior military figures were forced to admit that the military was severely underequipped. Sambo Dasuki himself admitted, “we bought equipment, but alas, it is still on the high seas”.

Investigations began shortly after President Buhari came to power in May 2015. On July 15, troops from the State Security Services raided Col. Dasuki’s house, finding among other things 12 ‘exotic cars’. Then on August 24, Buhari appointed a panel of enquiry into arms procurement under the former government.

Two weeks after the publication of the report on November 17, 2015, Dasuki was arrested. The EFCC also arrested several other officials implicated in the affair, including: Chief Raymond Dopkesi, Founder of Nigerian Media House Daar Communications; former governor of Sokoto State, Alhaji Attahiru Bafarawa; Shuaibu Salisu, a former director of finance and administration in the office of the National Security Adviser; ex-finance minister Bashir Yuguda; and Saliu Atawodi, the former Chairman of the Presidential Implementation Committee on Marine Safety.

Since then, ongoing investigations by the EFCC have led to a steady stream of raids, arrests and charges, with dozens of military officers, federal government officials, state governors, senior political party apparatchiks, and businessmen implicated and billions of naira in money and property seized. Numerous military officers have been stripped of their commands.

Along with Dasuki, one of the highest profile people to be charged in February 2016, was Air Chief Marshall Alex Badeh (retired.), former Chief of Defence Staff. Badeh was investigated regarding the award of UDS 930.5 million worth of contracts under his leadership. According to one report:

“Badeh is also said to be answering questions on the non-specification of procurement costs, absence of contract agreements, award of contracts beyond authorised thresholds, transfer of public funds for unidentified purposes and general non-adherence to provisions of the Public Procurement Act.”

Charges on March 7 2016 included using 1.1 billion naira drawn from air force accounts to buy a mansion; 650m naira for another property; 878m naira for construction of a shopping mall; total charges involved 3.97b naira (USD 19.8m). Much of this appears to have come from funds intended for salaries, rather than procurement funds.

The full story is still emerging and thus far the details revealed are incomplete. A comprehensive list of those implicated and charged does not seem to exist, but in total at least 36 military officers have been named in reports, as well as many more government and business figures. The EFCC report also named 241 organizations as recipients of money from Dasuki. Thus far there have not been any reports of convictions in relation to Armsgate, although many trials have started. Dasuki’s trial has been repeatedly delayed, and he is still being detained, despite rulings by two Nigerian courts and an ECOWAS (Economic Community of West African States) court that he should be granted bail. In the most recent hearing in January 2017, the government applied to a court to keep the names and addresses of prosecution witnesses secret for their protection.

In addition to those named above, the following individuals have also been implicated in the Armsgate affair: The list is not exhaustive.

  • Attahiru Bafarawa, former Governor of Sokoto state, arrested 1 Dec. 2015.[2]
  • High Chief Raymond Dokpesi, charged Dec 10 2015 on 6 counts, receiving 2.1b naira to run PDP media campaign (runs a media agency).3
  • Iyiola Omisore, former Deputy Governor of Osun State, arrested July 4 2016 over receiving 700m naira in stolen funds from the Office of the NSA.[3]
  • Former Chief of Air Staff Air Marshall Adesola Amosu (retired), arrested late Jan 2016. U1m found in his apartment.[4]
  • Lara Amosu, his wife, arrested early Feb 2016. 3b naira found in her bank accounts held on trust for her husband.5
  • Air Vice Marshal J.B. Adigun, Chief of Account and Budget of the Nigerian Air Force, arrested late Jan 2016.5
  • Air Commodore Akinwale, in custody of EFCC.5
  • Air Commodore O. Gbadebo, in custody of EFCC.5
  • Chief Olisa Metuh, spokesperson for the PDP, on trial for receiving 1400m naira under Armsgate.3
  • Under investigation and stripped of command in January 2016:[5]
    • Air Vice Marshall A.M. Mamu
    • AVM Oguntoyinbo
    • AVM T. Omenyi
    • AVM J.B. Adigun (see above)
    • AVM R.J. Ojuawo
    • AVM K.J. Kayode-Beckley
    • Air Commodore A.O. Ogunjobi
    • AC G.M.D. Gwani
    • AC S.O. Makinde
    • AC A.Y. Lassa
    • Colonel N. Ashinze
  • Major General Yishau Mahmood Abubakar, property seized by the EFCC Jan 2016[6]
  • Colonel Ojogbane Adegbe, a former Aide-de-Camp (ADC) to ex-President Goodluck Jonathan, arrested Feb. 2016 by the EFCC. One of 12 senior officers, including 3 serving Major Generals, and one retired, 3 Brigadier Generals, 4 Colonels and 1 Lieutenant Colonel.[7]
  • Haliru Bello, former Chairman of PDP, on trial April 2016 for receiving 300m naira into accounts of his companies.[8]
  • Waripamowei Dudafa, former special advisor to Goodluck Jonathan, arrested April 2016, accused of sharing in 10b naira taken from office of NSA and given to PDP candidates.3
  • Patrick Ziadeke Akpobolokemi, former DG of Nigerian Maritime Administration and Safety Agency (NIMASA), along with 5 others, standing trial accused of stealing 2.6b naira from NIMASA.3
  • Bala James Ngillari, former Governor of Adamawa state, questioned by EFCC for receiving 450m naira from Armsgate.3
  • Alhaji Aminu Babakusa, former Executive Director at the Nigerian National Petroleum Corporation, allegedly received 2.2 billion naira, which he claimed he ‘shared out as instructed’.3
  • Further names of military officers announced by Presidential spokesman in July 2017, as under investigation:[9]
    • Air Marshall MD Umar (Retired)
    • Major General ER Chioba (Retired)
    • Air Vice Marshall IA Balogun (Retired.)
    • Air Vice Marshall AG Tsakr (Retired)
    • Air Vice Marshall AG Idowu (Retired)
    • Air Commodore SA Yushau (Retired)
    • Plus 11 companies and 10 company officers
Sources

“Missing cash: defence hqtrs detains generals, recalls others”, Soni Daniel, Vanguard Nigeria, 30 Nov. 2015, http://www.vanguardngr.com/2015/11/missing-cash-defence-hqtrs-detains-generals-recalls-others/

“About $15 billion stolen in Nigeria in shady arms procurement deals”, Kevin Mwanza, Africa Insider, 3 May 2016, http://afkinsider.com/124855/15b-stolen-nigeria-shady-arms-procurement-deals/

“Arms deal: when did the rot begin?”, Suleiman Lawal, Daily Trust, 6 August 2016, https://www.dailytrust.com.ng/news/philosofaith/arms-deal-when-did-the-rot-begin/158030.html

“Armsgate: the scandal that ravages Nigeria’s critical institutions”, Olu Fasan, The Government Business Journal, 25 January 2016, http://govandbusinessjournal.com.ng/armsgate-the-scandal-that-ravages-nigerias-critical-institutions/

“The armsgate in perspective”, Usman Mohammed, The Nation, 7 December 2015, http://thenationonlineng.net/the-armsgate-in-perspective/

“Why we raided Dasuki’s homes, and what we found — SSS”, Sani Tukur, Premium Times, 19 July 2015, http://www.premiumtimesng.com/news/186903-why-we-raided-dasukis-homes-and-what-we-found-sss.html

“Nigeria’s Dasuki ‘arrested over $2bn arms fraud’”, BBC News, 1 December 2015, http://www.bbc.com/news/world-africa-34973872

“EFCC files fraud charges against Dasuki, Yuguda, Dokpesi, Bafarawa, others”, Global Patriot Times, 9 Dec. 2015, http://globalpatriotnews.com/efcc-files-fraud-charges-against-dasuki-yuguda-dokpesi-bafarawa-others/

“Grand theft nationale”: : how elites stole Nigeria dry”, Abbas Jimoh, Daily Trust, 2 July 2016, http://www.dailytrust.com.ng/news/general/grand-theft-nationale-how-elites-stole-nigeria-dry/153491.html

“Armsgate: how Badeh looted air force funds – witness”, Nigeria Economic and Financial Crimes Commission, 17 March 2016, http://efccnigeria.org/efcc/news/1801-armsgate-how-badeh-looted-air-force-funds-witness

“Arms scam: EFCC detains Badeh, gets order to hold Amosu”, Fidelis Soriwei & Eniola Akinkuotu, The Punch Nigeria, 9 February 2016, http://punchng.com/arms-scam-efcc-detains-badeh-gets-order-to-hold-amosu/

“Nigerian Government Insists On Secret Trial Of Ex-NSA Sambo Dasuki”, Premium Times, 31 January 2017,   http://saharareporters.com/2017/01/31/nigerian-government-insists-secret-trial-ex-nsa-sambo-dasuki

[1] The value of the naira fell over the course of the Yar’Adua and Jonathan administrations, from 125 to the US dollar in June 2007, reaching a low of 117 in March 2008, before rising steadily to 199 by the time Jonathan left office in May 2015. As the bulk of the transactions occurred towards the latter part of President Jonathan’s time in office, it is likely that the total dollar value of the extra-budgetary spending was towards the lower end of the given range.

[2] https://www.dailytrust.com.ng/news/general/grand-theft-nationale-how-elites-stole-nigeria-dry/153491.html

[3] https://www.thisdaylive.com/index.php/2016/07/05/armsgate-finally-efcc-arrests-omisore-2/

[4] http://africanfreepress.com/arms-deal-efcc-arrests-ex-airforce-chiefs-wife/#.WN59MY61tmA

[5] http://www.dailytrust.com.ng/news/general/armsgate-latest-11-top-military-brass-to-lose-commands/129278.html

[6] http://www.cdblog.com.ng/2-1b-armsgate-efcc-confiscate-sambo-dasuki-major-general-abubakars-houses/

[7] http://thewillnigeria.com/news/armsgate-army-confirms-arrest-of-adc-to-former-president-jonathan-adegbe-11-top-officers-transferred-to-efcc-custody/

[8] http://dailypost.ng/2016/05/18/armsgate-witness-reveals-how-ex-pdp-chairman-haliru-bello-got-n300m/

[9] https://politics.naij.com/697582-armsgate-president-buhari-orders-probe-badeh-amosu-full-list.html

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