HSBC Fingers Garuba, Agom in $182m Halliburton Bribery Scandal

Leaked records from HSBC, a huge global bank based in London, has indicted chief of staff to former military Head of State, General Abdulsalami Abubakar, now retired Major General Chris Garuba, and a former board member of the ruling Peoples Democratic Party (PDP), the late Andrew Agom, in the $182 million Halliburton bribery scandal.

The leaked files, obtained by the French newspaper, Le Monde and the International Consortium of Investigative Journalists (ICIJ), revealed that Garuba, a former governor of Bauchi State, is now chairman of Obekpa Petroleum, a Nigerian oil company.

Agom, a senior government official, was killed in an attack on his motorcade years back. The files also revealed new details about the HSBC’s role as a conduit for the bribes and new details about how indicted British lawyer Jeffrey Tesler’s operated.

The indictment of the high-ranking Nigerians not previously named publicly in connection with the scandal, according to the French newspaper, raised the possibility of renewed questions about Nigeria’s handling of the affair.

A network of secretive banks and offshore tax havens was used to funnel $182 million in bribes to Nigerian officials in exchange for $6 billion in engineering and construction work for an international consortium of companies that included the then Halliburton subsidiary.

Before his death, Agom was a board member of the PDP, which controlled the government when the scandal unfolded.

In 2010, Nigeria indicted former United States Vice- President Dick Cheney, who was CEO of Halliburton before he was elected, only to later clear him when Halliburton worked out a $35 million settlement.

Agom was, according to the Le Monde, the beneficial owner of an HSBC account linked to a Gibraltar- based company, Hemisphere Services Limited, which held a maximum amount of $797,377 at one point between 2006 and 2007.

Africa Confidential magazine previously named a company, Hemisphere Services (Nigeria), as a “recipient of largesse” from Tesler after viewing documents disclosed to the magazine during a French corruption investigation.

Agom’s account was opened in 1991, on the same day that an account was opened in the name of former Nigerian Air Force Chief, Abdullahi Dominic Bello. A Nigerian government investigator has previously described Swiss accounts held by Bello as a conduit for “slush funds”. The investigator did not specifically mention HSBC.

The HSBC files identified Garuba and his wife, Rita, as HSBC clients; their names are listed along with Tesler’s in an account named Bridlington Enterprises Limited, for which Tesler acted as an attorney.

“The files show that the account was opened the year before Tesler sent his first bribe payment to Switzerland, although the files do not show that Tesler transferred money into the Bridlington account, which held as much as $367,547 in 2006 or 2007,” the newspaper reported. Chris and Rita Garuba did not respond to ICIJ’s requests for comment.

In Nigeria, anti-corruption campaigners continue to call on authorities to identify and prosecute Nigerian citizens involved in the scandal. While never publicly released, a 2010 Nigerian government document reportedly included three Nigerian presidents, a vice-president, a minister, intelligence chiefs and corporate titans in a list of bribery beneficiaries. The report did not name Garuba or Agom.

“In terms of the personalities and the amount of money involved it is probably the biggest scandal in Nigeria’s history,” Dauda Garuba, Nigeria coordinator at the Natural Resource Governance Institute, said in an interview with ICIJ. Garuba has no connection to the Garuba family in HSBC’s files.

“Although we’ve seen the indictment and conviction of foreign companies and their top executives in Europe and America, Nigeria’s own government has not taken action in the very country in which the corruption took place,” Garuba said.

Tesler was sentenced to 21 months in prison and he forfeited $149 million from his Swiss accounts to the US government for serving as the go-between for bribes paid to secure contracts for KBR, the former Halliburton subsidiary, and the other consortium members, the Japanese firm JGC Corporation, Paris-based Technip, as well as Italy’s ENI S.p.A. and its Dutch subsidiary Snamprogetti Netherlands B.V.

The Halliburton Bribery Scandal dates to 1994 when the Nigerian government launched ambitious plans to build the Bonny Island Natural Liquefied Gas Project. Tesler began planning the bribe payments in 1994 and transferred small amounts of money through Switzerland in July 1996.

But by 2003, his role had escalated. In one brazen episode in Abuja, Tesler directed the drop-off of a travel bag stuffed with $1million in $100 bills in the foyer of a luxury hotel where the pernight cost of a suite can exceed the nation’s average annual income of $3,000. It was one of at least 20 money transfers that Tesler made or directed.

The cash was destined for PDP via the Nigerian National Petroleum Corporation (NNPC), according to an official Nigerian report.

The files obtained by Le Monde and ICIJ show that nine people, including members of the Tesler family and Nigerian nationals, held a variety of roles with accounts at HSBC Private Bank (Suisse) between 1990 and 2003 — months before the completion of the gas plant.

Nine of the 12 accounts instructed HSBC to keep all correspondence under lock and key in a bank safe. In response to ICIJ’s questions, an HSBC spokesman said the bank does not comment on specific clients.

Bank staff also responded to a request from Agom’s widow to unfreeze her husband’s account, whose post was sent to Tesler’s North London law firm and which was marked as subject to criminal investigations into Tesler.

The files do not indicate whether or not the account was ultimately unfrozen.

Tesler did not respond to ICIJ’s requests for comment.