Nigerian billionaire, Kola Aluko cheated the Nigerian government in oil deals
In a recent report according to information gathered from Panama
papers which leaked shady deals by government elites who stole and
laundered billions of money in offshore accounts, a New York Times
report has made shocking discovery how three Nigerian oil ministers and a
Nigerian billionaire, Kola Aluko used shell companies to buy 132 houses
and apartments in Nigeria, $67 million in bank accounts, 58 cars and
three airplanes.
Here is the full report by New York Times:
Entrepreneurs and corrupt officials across Africa have used shell
companies to hide profits from the sale of natural resources and the
bribes paid to gain access to them, according to records leaked from a
Panamanian law firm.
Owners of the hidden companies include, from Nigeria alone, three
oil ministers, several senior employees of the national oil company and
two former state governors who were convicted of laundering ill-gotten
money from the oil industry, new reports about Africa based on the
Panama Papers show. The owners of diamond mines in Sierra Leone and
safari companies in Kenya and Zimbabwe also created shell companies.
Some of the assets cycled through the shell companies were used to
buy yachts, private jets, Manhattan penthouses and luxury homes in
Beverly Hills, Calif., the law firm documents show.
Articles posted on Monday by the International Consortium of
Investigative Journalists, and reports being published this week by news
media organizations in 17 African countries, underscore the critical
role that secret shell companies can play in facilitating tax evasion,
bribery and other crimes. In Africa, offshore finance often underlies
the exploitation of mineral wealth, with the benefits bypassing the
public and going largely to wealthy executives and the government
officials they pay off.
The 11.5 million documents taken from the Panamanian law firm,
Mossack Fonseca, by a source who has not been identified have been the
subject of news coverage around the world since April, shedding new
light on the murky world of offshore finance. The Panama Papers project,
organized by the international journalists’ consortium, has involved
more than 400 reporters around the world and has set off criminal
investigations in many countries.
Mossack Fonseca has said it should not be blamed for wrongdoing by
its customers. “We merely help incorporate companies, and before we
agree to work with a client in any way, we conduct a thorough
due-diligence process,” the firm said in a statement. The statement
noted that the firm had not been charged with criminal wrongdoing in
nearly 40 years of operation.
But the journalists found that Mossack Fonseca had sometimes missed
or ignored evidence of criminal investigations or charges against its
clients. Though the records show that the law firm did scrutinize many
of those who sought its services, its reviews were often belated or
incomplete, according to the articles’ main author, Will Fitzgibbon, who
works at the consortium’s office in Washington.
Several major figures examined in the new Panama Papers reports
have previously been accused of wrongdoing, and some are under criminal
investigation or have been charged. But the details of their use of
shell companies had not previously been disclosed.
The consortium identified 37 companies created by the law firm that
had been named in court actions or government investigations involving
natural resources in Africa. All told, Mossack Fonseca’s files revealed
offshore companies that were established to own or do business with oil,
natural gas and mining operations in 44 of Africa’s 54 countries.
In one major criminal case, Farid Bedjaoui, a nephew of a former
Algerian foreign minister, has been accused by Italian prosecutors of
arranging $275 million in bribes to help Saipem, an Italian oil and gas
services company, win pipeline contracts in Algeria worth $10 billion.
Mr. Bedjaoui, called “Mr. Three Percent” in news media reports for his
purported share of the payoffs, has denied the charges.
The journalists’ consortium found that Mossack Fonseca had created
12 of the 17 shell companies linked to Mr. Bedjaoui that Italian
prosecutors are investigating as possible conduits for bribes from 2007
to 2010. One of them, Collingdale Consultants Inc., was used to divert
as much as $15 million to associates and the family of Chakib Khelil,
Algeria’s energy minister from 1999 to 2010, according to the charges.
Mr. Bedjaoui, who has Algerian, French and Canadian citizenship, is
accused of spinning a complex web to hide his money, with 16 bank
accounts in Algeria, Dubai, Hong Kong, Lebanon, London, Singapore and
Switzerland. His assets have been seized in Canada and France, where the
police reportedly took a 140-foot yacht and paintings by Warhol, Miró
and Dalí. United States officials are examining three New York
properties bought by Mr. Bedjaoui, including a $28.5 million Fifth
Avenue condominium, records show.
Though the investigation of Mr. Bedjaoui first made headlines in
February 2013, internal emails at Mossack Fonseca suggest that the law
firm did not notice the trouble until seven months later, while
conducting an internet search on another client.
Pressed by officials in the British Virgin Islands, where most of
the shell companies were registered, Mossack Fonseca said it was unable
to provide contact details for employees at the law firm who had served
as nominal directors for some of the companies under investigation.
The law firm’s managing director in the British Virgin Islands wrote in an internal email that not having “the basic information on employees is totally embarrassing,” and might result in a fine.
While Mossack Fonseca reported Mr. Bedjaoui’s activities to the
authorities in the British Virgin Islands in 2013, the law firm
continued working with one of his companies, Rayan Asset Management,
until at least November 2015.
Offshore middlemen have incentives “not to know what the companies
they are forming are going to be used for,” said Heather Lowe, a lawyer
at Global Financial Integrity, an anticorruption group in Washington.
“If they know too much, they might have to turn away business.”
As a result, she said, “there’s often no gatekeeper to prevent illicit money from entering the financial system.”
Kola Aluko, an oil and aviation mogul and one of four defendants
accused of helping to cheat the Nigerian government out of $1.8 billion
in proceeds from oil sales, was another jet-setting user of Mossack
Fonseca’s services who was examined by the consortium.
The New York Times reported last year that Mr. Aluko had used shell
companies to buy two Beverly Hills mansions for $39 million and two
others in Santa Barbara, Calif., for $33 million. In May, shortly after
one of the Beverly Hills homes was sold for $21 million, a Nigerian
court froze Mr. Aluko’s assets, including a yacht once rented by Beyoncé
and Jay Z, two Manhattan penthouses, 132 houses and apartments in
Nigeria, $67 million in bank accounts, 58 cars and three airplanes.
Mr. Aluko told the journalists’ consortium that he had never been
convicted of a crime and that speculation about wrongdoing on his part
was “misguided.”
“As a private citizen, I organize my business and family
matters to maximize convenience, as well as operational and
administrative efficiency,” he said in a statement.
In another case, the consortium found 131 companies set up by
Mossack Fonseca for the Israeli mining magnate Benjamin Steinmetz and
his holding company. (The holding company, BSG Resources, told the
journalists’ consortium that it had “no familiarity” with many of the
companies.) One company, Koidu Limited, mines diamonds in Sierra Leone
and is the target of protests and complaints from local residents and
environmental advocates.
More surprising, perhaps, is the use of shell companies by safari
operators in several African countries — at least 30 offshore companies
set up by Mossack Fonseca, the consortium found. As in other African
ventures, the offshore operations make it possible to conceal money
earned in developing countries but moved elsewhere from the tax
authorities or the public.
The journalists’ consortium posted with its articles an online quiz
to test knowledge about Africa, its natural resources and offshore
finance.
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