New Panama Papers: Corruption gushes from Nigerian oilfields

ABUJA, Nigeria—A Nigerian oil mogul currently entangled in two ongoing investigations used offshore accounts and shell companies to hide his illicitly gained profits, according to revelations in a new series of Panama Papers published yesterday by the International Consortium of Investigative Journalists (ICIJ). Kolawole Aluko is one of several Nigerian politicians and business people who use shell companies to steal money from Nigeria’s developing economy, investigators allege.

Aluko owned four companies in the British Virgin Islands and served as the director of a company in the Seychelles, according to the internal records of Mossack Foncesa, the law firm at the heart of the Panama Papers scandal. The 47-year-old Swiss resident used one of his companies, Earnshaw Associates, to register a Bombardier Global Express jet in Malta and eventually to secure a $30 million loan certified by Mossack Foncesa in 2014.

The list of Aluko’s uncovered assets and property is lengthy: A 215-foot-long yacht with a helipad, 10 dining areas, a Jacuzzi, and a sun deck; four homes in California; two Manhattan penthouses and one in Dubai; 132 houses and apartments in Nigeria; land in Canada and Switzerland; three airplanes; 58 cars; $67 million in offshore accounts in London and Switzerland; and an assortment of watches.

The documents leaked from the Panamanian law firm in April have highlighted the depth of offshore financing and triggered several investigations worldwide, including in Nigeria. The documents revealed Dan Etete, a former Nigerian oil minister convicted of money laundering in France, signed a consultancy agreement with an offshore company created by Mossack Fonseca. The agreement required the company to negotiate the sale of oil blocks to China, but the deal never proceeded. Another uncovered file disclosed a $12 million loan from a shell company to a Nigerian, with an agreement typed only on half a sheet of paper.

Nigeria is no stranger to illegal offshore finances. Oxfam recently revealed that up to 12 percent of Nigeria’s GDP is lost to illicit financial flows. According to the group Global Financial Integrity, Nigeria ranked 10th on a list of developing countries with the most illicit financial flows between 2004 and 2013.

“There’s a culture of impunity in the country,” said Aauwal Musa, the Nigerian director of anticorruption coalition Transparency International. “It (persisted) simply because the government was not interested in stopping corruption.”

Nigerian officials are currently investigating whether Aluko helped smuggle millions of dollars out of the country with former Nigerian petroleum minister, Diezani Alison-Maduekwe, who is facing a similar investigation. During Maduekwe’s tenure, Aluko’s oil company, Atlantic Energy, received eight crude oil licenses in the Niger Delta region between 2011 and 2012. According to the ICIJ, the company sent thousands of dollars of crude oil to the United States, Germany, Italy, the Netherlands, and elsewhere.

The Nigerian government also claimed Aluko bought his yacht with money from illegal crude oil sales. He is one of four people accused of cheating the government of nearly $1.8 billion from illegal oil sales.

The amount siphoned “is equal to the combined 2016 budgets of about four states in Nigeria, which monies could be utilized to cater for about 13 million” people, the government noted.

In May, the government won a court order to freeze several of Aluko’s assets. Government officials made the move after Aluko in April sold his 15,000-square-foot home in Beverly Hills at a $2 million loss, a likely attempt to dissipate his assets. But Aluko has maintained his claim of innocence.

“As a private citizen, I organize my businesses and family matters to maximize convenience, as well as operational and administrative efficiency,” Aluko told the ICIJ. “My companies operate in accordance with the laws and regulations of the relevant jurisdictions and, insofar as tax liabilities arise, they pay taxes in the jurisdictions in which taxes are due to be paid.”

Nigeria’s Economic and Financial Crimes Commission brought charges earlier this month against several Nigerians with ties to Maduekwe, including Aluko. But prosecutors dropped his name from the charge sheet after admitting they couldn’t locate him to serve him with the legal documents.

The publicity surrounding the Panama Papers makes it unlikely any of the defendants will easily avoid prosecution, Musa said, thanks in part to the collaboration between international security forces and nonprofits: “There’s no way they can escape.”