You are here

Military Chiefs, Others Steal $15Bn- TI

PrintPrintEmailEmail
fabian tarpael, abuja

Former military chiefs and politicians have reportedly stolen a whopping $15 billion – a sum equivalent to half of Nigeria’s foreign currency reserves – through “fraudulent arms procurement deals” in the last seven years, according to Transparency International (TI).

The fund simply disappeared into private pockets under the guise of procurement of arms and military equipment used in the fight against the Boko Haram terrorists in Nigeria.

TI, the global watchdog against corruption in a report exposed pervasive corruption in the defence sector in Nigeria.

“Nigeria’s corrupt elites have profited from conflict; with oil prices at a record low, defence has provided new and lucrative opportunities for the country’s corrupt kleptocrats. Former military chiefs have stolen as much as $15 billion – a sum equivalent to half of Nigeria’s foreign currency reserves – through fraudulent arms procurement deals,” the report stated. But, the Defence Headquarters (DHQ) has refuted sweeping allegations made against the military by Transparency International.

The report revealed that the Boko Haram insurgency has been fuelled by a high level of public sector corruption involving the top brass of the Nigeria Armed Forces and their civilian accomplices, a situation that has almost eroded the legitimacy of the Nigerian state. The 19-page report entitled, “Weaponising Transparency: Defence Procurement Reform as a Counterterrorism Strategy in Nigeria” exposes the damage corruption has done to the nation’s political stability, counter-terrorism efforts, socio-economic development and well-being of the citizens.

The report was published by Transparency International Defence and Security Programme in collaboration with Civil Society Legislative Advocacy Centre (CISLAC)

According to the report, Nigeria recorded sharp increases in defence spending between 2011 and 2015 as a result of the counterterrorism operations in the North-East, but unfortunately, there was little or nothing to show for it.

“Extra-budgetary spending on counterterrorism has dramatically increased throughout 2014 and into 2015, and with it the scale and scope of corrupt opportunities in the defence sector.

“Corruption has hollowed out the Nigerian Army, the largest in West Africa, and compromised the integrity of the country’s Navy, which has been implicated in the theft of millions of barrels of crude oil in recent years. “The result has been a corrupt war economy that incentivises high-ranking officials and security personnel to perpetuate conflict for personal gain. War has been a boom to Nigeria’s corrupt,” said the report.

The report further revealed that in Nigeria, politicians compete for private control of national coffers, rather than delivering public goods based on the growing needs of Nigeria’s booming population.

It said that under the influence of political connection, the politicians and their military accomplices were able to short-change the system as was seen in the celebrated case former National Security Adviser, Col Sambo Dasuki (rtd) who is currently standing trial for allegedly diverting funds meant for the counter- terrorism war to foster the political agenda of the government served. “Defence sector corruption in Nigeria has enabled the political elite to accumulate and distribute political patronage. Longstanding military exceptionalism meanwhile, has justified weak and compromised oversight of security-related spending and excessive secrecy.

“By far, the most significant corruption opportunities are those exploited through inflating procurement contract values and creating “phantom” defence contracts. Such contracts are used as a vehicle for money laundering: facilitated via weak or corrupted Nigerian banks, illicit financial flows are often hidden in property in the UK, United States, South Africa and Dubai.”

The report blamed the high rate of corruption in defence contracts on the secrecy associated with whole system, coupled with the general culture of corruption that has eaten deep into all facets of the Nigerian system. The reports said, among other things, that public sector corruption was undermining the state’s ability to address Nigeria’s many socioeconomic underdevelopment, unemployment and insecurity challenges.

According to the report, “Corruption has been particularly destructive in the defence  and security sector. Overlooked in peacetime, defence sector corruption has devastating real world consequences when conflict flares. With lower oil prices, corrupt elites have increasingly exploited alternative illicit revenue streams.

“The secret nature of defence and security budgets has made them the easiest and most lucrative opportunity to exploit. While Boko Haram has constructed a conflict economy geared around pillage, racketeering, and kidnapping; senior players in the Nigerian security sector have also profited from the insurgency.

Creating inflated or phantom contracts is still one of the easiest ways for corrupt actors to steal from the Nigerian defence budget. “In 2014, former NSA Dasuki awarded a $500 million contract for refurbished helicopters to Triax Company Limited. The helicopters have not been deployed. One source in the Nigerian Air Force described the purchase as “pure waste”.

As another source explained, “for the price of each helicopter provided by this contract, the Air Force could have acquired seven top grade, brand new military helicopters.”

Another common tactic in corrupt defence contracting is the use of ‘briefcase companies’: shell companies that exist only on paper. In December 2011, for example, unconfirmed reports surfaced of the MOD seeking six brand new Mi- 17SH military helicopters to support operations against Boko Haram. “The tender was not advertised, and instead, the eight companies were invited to bid for the multi-billion dollar supply contract.

No information is available on any of the companies invited to bid, what goods and services they provide to the defence or any other sector, who their employees are, or who owns them. None appear to have the capabilities to fulfill this contract; suggesting that the beneficiaries are simply set up to give the appearance of multiple bidders competing to lower the price to complete the contract.

“By acting in collusion, however, the multiple bidders are able to increase and artificially inflate the contract price. Some of the bids were in Euros or Pound Sterling, suggesting – perhaps deliberately – links to Europe or the UK, though none could be found. Most of the bids were around US $20 million per helicopter. Yet, an identical helicopter model purchased by the United States came to US $17.5 million per unit, while a similar model sold by Russia to India in 2012 cost US $17 million per unit,” the report said.

The report, however, acknowledged that President Muhammadu Buhari’s government has taken significant steps to identify and prosecute individuals involved in security sector corruption. In his comment, Auwal Musa Rafsanjani, Director of CISLAC said: “The defence sector is a juicy target for corrupt military leaders seeking to pad their pockets.

Without increasing transparency and oversight of our most secret sector, we will not succeed in keeping Nigerian wealth in Nigeria. Corruption in the defence sector only helps Boko Haram.”

Meanwhile, Maj-Gen. John Enenche, Director of Defence Information, refuted the allegations while briefing journalists at the Defence Headquarters in Abuja.

Enenche said that the allegations were false and, therefore, should be disregarded by Nigerians and the international community. He said the present leadership of the Armed Forces had done a lot to train, boost troops’ morale and procure vital equipment through due process for operations against insurgents in the North-East and other operations.

He said the DHQ, Army, Nigerian Navy (NN), Nigerian Air Force (NAF) Headquarters had established procurement branches that were guided by the rules and regulations of the Bureau for Public Procurement (BPP).

He said even the Ministry of Defence was dealing directly with states and governments on Defence equipment procurement without using contractors or vendors any longer. “On this note, it is suspicious that a sweeping statement of corruption against the military officials at this time is rather disheartening.

“More so, the Nigerian Military was, on March 22, credited by the United States of America (USA) as having done very well for fighting insurgency and extremism, among others. “Such an allegation came at the peak of consistent success being recorded in our areas of operational engagements, especially in the North-East,” Enenche said.

The Director of Defence Information explained further that the military operations in the North- East was very obvious, not only to Nigerians, but the whole world, hence the allegation must be treated with utmost suspicion.

“The DHQ is, therefore, assuring the general public that there is no calculated, deliberate or institutionalised corruption in any form within its system,” he said. The DDI concluded by saying: “I susp

Section