Deconstructing The PTDF Funds Saga

culled from Independent, 3rd October 2006

The plot of the PTDF funds saga will go down as one of the most intriguing schemings in the corridor of power in Nigeria. As a lawyer, I came to this conclusion after a careful study of all relevant materials on this PTDF saga namely the EFCC report, the administrative panel report, Jefferson's letter to Obasanjo, Atiku's letter to the National Assembly, the New York Times expose on Congressman Jefferson as published by Nigeria's Vanguard on September 22nd,2006, literature on the operations of the PTDF as published in the local media and The News edition of October 2, 2006. My conclusion is that Obasanjo has cleverly weaved the campaign expenses of his deputy from a campaign account they jointly manage to accuse him of mismanaging PTDF funds through two mutual friends of theirs: Otunba Mike Adenuga and Otunba Oyewole Fasawe.
 
I am taking the challenge to expose this grand deceit so that whatever the outcome of the present scheming, Nigerians will not go away with the impression that the whole tragic-comedy is something else.
 
First, the claim by Obasanjo that he acted on Congressman Jefferson's letter to institute an investigation of PTDF Accounts has been disputed by at least two reference sources on the PTDF saga. If you read Jefferson's letter to Obasanjo, which has been published in the media, he admitted that he was writing the letter in reaction to an earlier letter by his estranged Nigerian business partner (Otunba Fasawe) who had petitioned Presidents Obasanjo (and George Bush of the U.S.A ) against Jefferson. What this means is that Jefferson was not the first to inform Obasanjo about the stalled business. The truth one can deduce from Jefferson's letter, Atiku's letter and FBI claims in the New York Times is that Otunba Fasawe has sought President Obasanjo's support to get the American government to help him retrieve his $6.5million trapped in the hands of Jefferson and iGate. In essence, Jefferson's allegations against Fasawe will pass for a blackmail to get even with Fasawe and indeed, escape from having to refund his money.
 
If Jefferson was reacting to Fasawe's petition and the request for his money, then the logical step for Mr. President is to suspect his allegations, which I think he did. This probably explains why he kept the letter in his drawers for two years until he needed anything, just anything, to get even with his troublesome deputy. The implication of this on the PTDF saga will become evident in a short while.
 
The second major premise of EFCC indictment of the Vice President is that he approved the investment of PTDF funds in ETB and TIB without the approval of the FEC. This, again, is a falsehood designed to achieve a preconceived goal. Anyone who reads the literature on the operation of PTDF and Atiku's defence in the letter to the National Assembly will see through this. In summary, the matter at issue is not FEC's approval of investment in the banks because FEC never exercised such powers on PTDF. The PTDF is a fund, which conducts its operations with income revenue generated through the investment of its funds. It does not seek nor ever got FEC approval for such investment. The $125m that was approved by FEC was not for investment. It was for projects and programmes of the PTDF. When FEC approved the concepts of the projects, the Executive Secretary of the PTDF raised a memo in which he argued that since the projects in question will take considerable time to pass through conception and due process, the funds could be better invested in banks to generate additional revenue for the government, an argument the Vice President shared.
 
The deposit of funds in banks did not require the approval of FEC and as such, no one breached any regulation by not getting an approval. The agency of government saddled with the responsibility of supervising such venture is the Office of the Accountant General of the Federation (AGF). Every account, including the EFCC report confirms that the AGF was not only duly informed of the investment in ETB and TIB; he approved the investment as requested by law. The choice of ETB and TIB is also not arbitrary as EFCC report makes it look. The two banks at all material time were duly certified among banks that could receive government investment. In essence, the AGF (not FEC) whose approval was required for the investment of the funds in the two banks approved the venture. As such, no law was breached in the investment.
 
It logically follows that if no law had been breached in the investment of the funds in ETB and TIB as evident above, the banks, which are in business to play an intermediary role in the economy, have the free will to lend their money to whoever they like as long as such people satisfy their criteria. It is therefore the business of ETB and TIB that they do business with. As for ETB, EFCC has sustained propaganda that Globacom paid for its SNO licence with the PTDF fund. Globacom has demonstrated through numerous advertisements that it paid the $180m licences through a credit facility from BNP Paribas, eight months before the investment of PTDF's funds in ETB. The EFCC did not say it controverted this claim by the investigation at the PNB Paribas. Globacom has caused the publication of correspondence with BNP Paribas showing that it funded the payment of the SNO licence. Perhaps, the most telling evidence that Globacom could not have relied on the PTDF fund to pay for its licence was the fact it secured $240m from the same BNP Paribas to pay for its abortive GSM licence almost two years earlier.
 
While all records show that the investment in the ETB has been fully returned with interest, the investment in the TIB has been acquired as a liability by Springs Bank, which acquired TIB in the last bank recapitalisation exercise. Generally, EFCC has been playing on the emotions of the public by claiming that a particular fund had been loaned to a particular customer. Banking law is clear that a depositor i.e. creditor to a bank cannot finger his own specific fund in the pool of funds in the bank's vault. All this hullabaloo of someone taking a particular fund is borne out of ignorance. When a bank is distressed, no creditor can point at the corner of the bank vault to identify his own saving. This logistics is what the law covers effectively by granting a creditor his bank instrument rather than a listing of the serial number of the banknotes he deposits in the bank!
 
A common charge in this engaging debate on the PTDF saga is that Atiku, rather than defend himself, has been accusing Obasanjo of corruption. Some commentators argue that he justifies his guilt by averring Obasanjo's guilt. I think those who hold this view have not followed the debate with keen attention. My reading of Atiku's position is this:
 
(1) the Mofas account, which the EEFC claimed is the conduit through which the PTDF fund was siphoned, is a campaign account jointly managed by President Obasanjo and Vice President Abubakar.
 
(2) The reference to withdrawals from that account traceable to the President is not to prove that the President is equally guilty of an offence. Rather, it is to prove that the account in question is a campaign account managed by the two of them.
 
(3)What the EFCC has done is to regard the withdrawals for the campaign activities of the Vice President as evidence of benefits from the TIB loan to Otunba Fasawe who put the account at the disposal of his mutual friends, Obasanjo and Atiku, but ignore the withdrawals linked to Obasanjo's businesses, woman friend, NGO, ancestral community and Bells Secondary School.
 
Atiku's contention that if EFCC duly acknowledges the president's expenses from that account as having no relationship with the PTDF fund, it should also acknowledge that his own expenses from the account are not linked to the PTDF fund is logical. It is also logical that if such expenses by the president are not siphoned PTDF's funds, then it cannot be so in the case of the Vice President. This position is supported by expenses dating to 2001, three years before PTDF invested its money in TIB.
 
In this regard, most commentators have allowed attention to be diverted from what should be the major national worry in this unfolding tragic-comedy: How was the money in the Mofas account raised? And how can we regulate the use of such slush funds in our party politics and elections? This is an age-long problem, which spurred the Coker Commission of Enquiry against Chief Awolowo in the First Republic and saw politicians like Abubakar Rimi, Bola Ige, Bisi Onabanjo, among others, to jail on the demise of the Second Republic.
 
To return to our primary task. There is only one logical conclusion one can reach by a reconstruction of the PTDF saga, using the relevant references listed above: President Obasanjo has utilised his legendary native intelligence to cleverly weave the campaign account expenses of Atiku to the PTDF fund to establish a case against him. But he forgets that in that same account, he has buried a corpse whose feet are protruding through the earth. If you are in doubt, please make a painstaking study of the EFCC report, the Administrative Panel report, Atiku's letter to the National Assembly, literature on the operation of PTDF, Congressman Jefferson's letter to Obasanjo and the New York Times expose on Jefferson as published in the Vanguard of September 22. You will discover the labyrinths of deceit weaved around the PTDF saga. It is a classic.
 
•Akinkoye, a London trained lawyer contribute this piece from Lagos.