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Written by Administrator
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1.0 INTRODUCTION
The Senate received the Report of the Ad-Hoc Committee on the Petroleum Development Fund and Other Related Matters or Organizations on Tuesday, 28th February, 2007, and concluded debate thereon 6th March, 2007.
The Senate at its sitting of 6th March, 2007, after debate on the Ad-Hoc Committee€™s Report constituted a committee to review the Reports and report back in one week. On Wednesday, 14th March, 2007, extension of time was sought and obtained and the Committee was given an additional one week to present its report.
MEMBERSHIP OF THECOMMITTEE
1. Senator Umaru I. Tsauri - Chairman
2. Senator Bello M. Yusuf - Member
3. Senator Timothy A. Adudu - Member
4. Senator Sa€™ad A. Mohammed - Member
5. Senator Akinlabi Olasunkanmi - Member
6. Senator John Azutu-Mbata - Member
7. Senator Chris Adighije - Member
3.0 TERMS OF REFERENCE
The Terms of Reference of the Committee are as follows:
i) To evaluate and assess the evidence, findings and recommendations of the Ad-Hoc Committee in the light of any new information and evidence with a view to proposing resolutions to be adopted by the Senate, and
ii) To take account of views and comments of Senators during the debates, and to update and improve the work of the Ad-Hoc Committee in the light of new evidence or perspectives presented during the debates.
The Committee held its pre-inaugural meeting on Monday 12th, March, 2007, and agreed that it was necessary to inaugurate the Committee.
4.0 INAUGURATION OF THE COMMITTEE
The Committee was inaugurated on Tuesday, 13th March, 2007 by His Excellency, The President of the Senate, Senator Ken Nnamani.
The Committee held several meetings thereafter to deliberate on the scope of the assignment and consequently adopted a methodology for the work.
5.0 METHODOLOGY
The Committee resolved that in the course of its work, it would take the following into consideration:
i) The Verbatim Report of the Public Hearing conducted by the Ad-Hoc Committee Report.
ii) The observations, findings and the recommendations of the Ad-Hoc Committee Report.
iii) The views of Senators as expressed in the Hansards of Wednesday 28th February, 2007 and Tuesday 6th March, 2007.
iv) a. Available new evidence
b. Available new information.
OBSERVATIONS AND COMMENTS
Ad-Hoc Committee
1. Non compliance with the provisions of Section 9 subsection (i) of the Finance (Management and Control) Act with regard to tenor of investment. The law provides for a maximum of 180 days or 6 months. (1. The Committee observes that the applicable section of the Finance (Control and Management) Act is section 23 as expressly outlined in section 3 of the PTDF Act)
2. Some of f1e accounts of the PTDF with the Central Bank are not known to the PTDF management (2. Sustained; the account referred to are:
i. Reserve Account ii. Inspectorate Account; iii. Bank Operations Account and
iv. Independent revenue Account. (See annexure 1a and 1b). The Accountant-General of the Federation was invited to appear before the Committee vide our letter of invitation dated 15th March, 2007 (See annexure lc)
a) To address the expenditure from the reserved account in which the Department of Petroleum Resources had remitted about $1.7 billion
(See annexure 1 b)
b) To address the authorization for such expenditure.
c) To explain the status of the account between December, 2006 to date but he did not appear.)
3. Funds accruing to the PTDF account are not promptly remitted by DFR. (3. Sustained)
4. Some Federal Ministries made incursions into the funds of the PTDF by applying and obtaining approvals from Mr. President for the financing of their projects. (4. Sustained; the projects approved by Mr. President are as follows:
i. Ministry of Science and Technology was granted the sum of $10 million for the purchase of Computer for all Nigerians Initiative (CANI).
ii. Defence Industries Corporation of Nigeria (DICON) was granted the sum of 1 billion for rehabilitation.
iii. Incorporation of Galaxy Backbone.)
5, There seems to be no proper co-ordination between the DPR, the AGF€™s Office and the PTDF. The inflows into the various accounts kept in the name of PTDF by the CBN and managed by the AGF could not be ascertained by the operators of the PTDF. (5. Sustained, the committee notes that the then Presidential Adviser to Mr. President on Petroleum and Energy, Engr. Funsho Kupolokun vide his letter dated 21st December, 2000 had suggested an amendment to the PTDF Act to accommodate the proposed restriction on the PTDF funding and other matters. (See annexure 2))
6. Restriction of funding to a limit of 25% of signature bonus receipts or $100 million in any given year was in 2006 and not in 2005 as testified by the DPR and this is not supported by the law establishing the PTDF. (6. Sustained)
7. The Management of the PTDF confirmed that some things were done impromptu and several things were done outside the budget approved government. (7. Sustained)
8. Documentation in PTDF is inadequate. (8. Sustained)
9. The office of the Auditor-General was evasive in addressing its inability to see that the accounts of the I TDF were audited on a yearly basis. (9. The Committee notes that this falls outside the mandate of the office of the Auditor-General.)
10. From the testimonies given it was confirmed that those heading the Finance department of the Fund were not privy to some financial decisions. (10. Sustained)
11. Addresses given for the verification of the Overseas Scholarship Scheme were not adequate. (11. The PTDF assert that addresses of their students and the institution of their training are available and verified.)
12. Several grants and loans were sourced from the PTDF account on projects and programmes which are not in line with the objectives and the law establishing the. (12. Sustained)
13. The Fund took an overdraft in 2001 when there was a cash balance of N8, 436,588,617.00 in its accounts. (13. Sustained)
14. Huge sums of money in foreign currency were kept in the PTDF office not minding the risk. (14. Sustained)
15. Lack of sound financial decisions on the part of M~pagement led to funds being trapped in distressed banks - City Express-NI00 million; Trade Bank- N560 million. (15. Sustained)
FINDINGS
A. PLACEMENT OF DFPOSITS WITH TRANS INTERNATIONAL BANK (TIB), LOANS TO OTUNBA JOHNSON OYEWOLE FASAWE AND THE NDTV/PTDF LINK.
The Committee found as facts that:
1. On 16th July, 20m, an account was opened with TIE by PTDF. (1. Sustained)
2. On July 16, 2003 the sum of USD10 million was placed by PTDF with Trans International Bank Plc (TIB). (2. Sustained)
3. On December 24, 2003, the sum of USD20 million was plC1ced by PTDF with Trans International Bank Plc. (3. Sustained)
4. On 20th October, 2003, TIB advanced a loan of N400 million to NDTV, a business concern promoted by Otumba Fashawe. (4. Sustained)
5. On 22nd October, TIB advanced a loan of N420 million (5. Sustained)
to Mofas Shipping Company United, another company promoted by Otunba Fashawe.
6. On October 23, 2003, TIB advanced a loan of N300 million to Transvari Services Limited, a business concern promoted by Ahmed Vanderpuye, a business associate of Otunba Fashawe and his partner in NDTV. (6. Sustained)
7. In January 2004, after the deposit of $20 million with TIB, the ban1, - advanced another loan of N730 million to NDTV. (7. Sustained)
8. The said Otunba Fashawe, on the Vice President€™s admission, is a close friend of the Vice President. (8. Sustained)
9. Though the Vice President denied any business relationship with Otunba Fashawe on NDTV, the preponderance of the evidence is to contrary. (9. The Committee disagrees with the observation for the following reasons:
1. Mr. Kachikwu Dumebi testimony was self contradictory and not credible (see annexure 3) particularly pages 94-95 of the verbatim report of 18th December, 2006.
2. Otunba Johnson Fasawe had corroborated (under oath) the Vice President statements ( under oath) that the N30 million paid for the Headquarter building of the NDTV was a loan and that Adamu Abubakar who owns 10% shares in NDTV was not the vice President€™s son. The Vice President clarified that the loan of N30 million was in fact from a verifiable PDP campaign account.
3. The Vice President brought his son before the Ad-Hoc Committee and declared that he had no business interest in NDTV. The Vice President did that under oath.
4. Submissions from the Corporate Affairs Commission do not reflect the name of the Vice President in the ownership structure of NDTV.
Senator Akin Olasunkanmi however dissents for the following reasons;
1. The share holding of NDTV shows that one Adamu Abubakar owns 10% shares in NDTV and coincidentally one of the sons of the Vice President goes by the name Adamu Abubakar.
2. The Vice President brought a letter from the Congress man William Jefferson to the Federal Ministry of Communication in respect of NDTV/iGate deal.
3. The Vice President gave a loan to Otunba Johnson Fasawe which he used to pay for the head office of NDTV.)
10. The Vice President admitted lending N30 million to Otunba Fashawe for the payment of the deposit for the lease of the NDTV Headquarters situated at plot 555 Adetokunbo Ademola Crescent, Wuse II, Abuja. (10. Sustained)
11. The letter of Congressman, William Jefferson, suggests the possible use of PTDF funds for the purpose of NDTV i-Gate transaction. (11. Sustained)
12. The evidence of Dumebi Kachikwu was direct and credible to establish:
a. The Vice President€™s connection with NDTV
b. The use of PTDF funds to finance the NDTV/i-Gate deal. (12. Refers to No. 9 above)
13. The loans to NDTV, Mofas Shipping Co. Ltd. and Ransvari Services Ltd were irregular, poorly documented and uncollateralized and this was confirmed by the Managing Director of Spring Bank Plc that acquired TIB under the bank consolidation programme, Mr. Michael Uchenna Chukwu in his oral testimony before the committee.
14. The Special Adviser to the President on Petroleum and Energy, Alhaji Rilwanu Lukman, had in a memo dated April 10th 2003, sought the Federal Executive Council€™s approval for the sum of $125 million for the implementation of specific projects listed in the said memorandum, This memo which was routed through the Vice President who at the time had a supervisory responsibility over PTDF was approved on 25th April, 2003. (14. Sustained)
15. On October 14, 2003, the then Executive Secretary of e PTDF, Hamisu Abubakar, sought the approval of the Vice President for another $20 million without the knowledge of the Presidential Adviser on Petroleum and Energy, Alhaji Rilwanu Lukman. This was approved without reference to the Federal Executive Council and no documented input of the President or Alhaji Lukman. (15. Sustained)
16. The then Executive Secretary of PTDF, Hamisu Abubakar, had justified his request for the additional $20 million thus:
€œIn the course of the execution of the project, we observed the need to achieve uniformity and complete spread of the projects, also the projects have some linkages with existing programmes of the institutions. Therefore, it has become expedient to ensure that the projects are executed as scheduled. These needs have consequently exposed some funding gaps which have to be filled through an urgent supplementary release€. (16. Sustained)
17. The earlier $125 million and subsequent $20 million rather than being used for the approved projects were largely invested through placements with Equatorial Trust Bank Plc and Trans International Bank Plc. (17. Sustained)
18, There is a curious coincidence between each respective placement by PTDF with TIE and loans from TIE to NDTV, Mofas Shipping Co. Ltd and Transvari Services Ltd which Otunba Johnson Oyewole Fasawe has substantial interest either directly or through his associate, Ahmed Vanderpuye. (18. The Committee notes the coincidence that exists between the deposits and the loans, but could not establish that the coincidence was enough to link the deposits with the loans.)
19. This coincidence corroborates the claim of Congressman William Jefferson in his letter aforementioned and the evidence of Dumebi Kachikwu that PTDF funds were used to finance the DTV/i-Gate deal. (17. The Committee disagrees for reasons stated in (18 above)
20. Other than PTDF funds aforementioned, there was no evidence that anyone else invested any money in the DNTV/i-Gate transaction (20. There was no evidence of PTDF funds in NDTV/iGate transaction other than TIB loan.)
1. No satisfactory answers were given regarding the status of the PTDF projects for which the funds were released in the first place. (21. Sustained)
2. The approval of the Federal Executive Council in respect of the $125 million was for the implementation of the Fund€™s projects as outlined in prayer 7 above and for the overall sustenance of the Fund. (22. Sustained)
23. The placement in TIB for the purpose of financing NDTV /i-Gate deal, a purely private transaction as against the putative purposes for which the funds were released in the first place amount to misappropriati0n of public funds and abuse of public trust by the Vice resident, Alhaji Atiku Abubakar and the then Executive secretary of the PTDF, Hamisu Abubakar. (23. The Committee disagrees for reasons stated in (18 above).)
B. PLACEMENT OF DEPOSIT WITH EQUATORIAL TRUST BANK (ETB,), IT€™S RELATIONSHIP WITH THE VICE PRESIDENT, HIS EXCELLENCY, ALH. ATIKU ABUBAKAR, OTUNBA MIKE ADENUGA AND GLOBACOM
1. The PTDF started its banking relationship with ETB in 2002 with the transfer of $50 million from its account with UBA Plc New York to Equatorial Trust Bank. (1. Sustained)
2. On April 10, 2003, the PTDF received approval for $125 million for the execution of specific projects and programmes as earlier mentioned. (2. Sustained)
3. On 17th July 2003, ETB received the sum of $62, 100,000 from PTDF as further deposit. (3. Sustained)
4. On 26th August 2003, ETB received the sum of $52,900,000 from PTDF as further deposit (4. Sustained)
5. Both latter payments totaling $115 million went into the PTDF€™s domiciliary account with ETB. (5. Sustained)
6. On 20th August, 2003, on the instructions of the PTDF, ETB purchased the total sum of $100m at the rate of N128 to the Dollar which was the Central Bank€™s rate at the time. The purchased funds were placed at different times with different maturities. By this arrangement, $15 million was left in the domiciliary account of PTDF on its instructions. (6. Sustained)
7. These various sums have since been repaid by ETB to the PTDF with accrued interest. (7. Sustained)
8. There was no evidence before the Committee of any lending relationship between ETB and Globacom and neither did the Committee find any link between the PTDF and Marine Float Limited account (8. Sustained)
9. The Committee also established the Mike Otunba Adenuga is only a share holder of ETB and the Committee could not establish any link between PTDF and himself. The evidence before the Committee was to the effect that Otunba Adenuga was never the Chairman of ETB. (9. Sustained)
C. ADDITIONAL APPROVAL OF $20 MILLION FOR PTDF IN 2003
1. On 10th April, 2003, the Presidential Adviser on Petroleum and Energy, Alhaji Rilwan Lukman wrote through the Vice President to the President, Federal Republic of Nigeria, requesting for the sum of $125 million to implement the following PTDF projects: (1. Sustained)
2. Capital expenditure on Phase II of upgrading the II facilities and infrastructure of the Petroleum Training Institute, Effurun; (2. Sustained)
1. The establishment of Offshore Technology Development Centres (OTDCs) for training of manpower for off-shore petroleum activities
2 The strengthening and expansion of on-going programs for the universities; provision of quality laboratory and library facilities in petroleum technology related areas, with special attention to basic and applied research oil petroleum technology.
3. Establishment of a Central National Petroleum Laboratory for inter-university and industry collaboration, expertise enrichment, and information flow, with a comprehensive network of on-line inter-library system.
4. Establishment of a National Geodata Base, in line with current practice in all oil exporting countries, to be a national repository and storage facility for all oil exploration and production data for easy retrieval, analysis and utilization.
5. Indigenous capacity building to enable Nigerians engage themselves in the gas sub-sector and preserve and protect our long-term national interests in the West African and Tran-Saharan Gas Pipeline projects.
6. Commencement of feasibility studies and Need Analysis on the establishment of the College of Petroleum Studies, Kaduna.
7. Indigenous capacity building in solid minerals development in line with the statutory schedule of activities added to the PTLJF in its draft amendment law now before the National Assembly.
3. It is a fact that the $125 million was not utilized for the execution of any of the projects mentioned above. (3. Sustained)
4. On 14th October 2003, the then Executive Secretary of PTDF, Yusuf Hamisu Abubakar requested for the sum of $20 million for the reason stated hereunder: (repeated for emphasis) (4. Sustained)
€œIn the course of tie execution of the project, we observed the need to achieve uniformity and complete spread of the projects; also the projects have some linkages with existing programmes of the institutions. Therefore, it has become expedient to ensure that the projects are executed as scheduled. These needs have consequently exposed some funding gaps which have to be filled through an urgent supplementary release€.
5. It is also a fact that the $20 million when released to PTDF was placed in TIB and given out as loams which could not be recovered. It was not used for any projects. (5. The Committee notes that the placement of the deposit cannot be linked to the loan)
6. The Committee finds as uncalled for, and indeed flagrant this request for additional $20 million and the subsequent approval given by the Vice President His Excellency, Alhaji Atiku Abubakar especially when the $125million earlier approved for specific projects was still not utilized. The transaction was not conceived in the public interest or in the interest of the PTDF and the Committee so finds. (6. The Committee finds that in the case of the additional approval of $20 million on 14th October, 2003, the then Executive Secretary, Hamisu Abubakar, misrepresented the fact and wrongfully obtained approval from His Excellency, the Vice President of the Federal Republic of Nigeria.)
D. PLACEMENT OF FUNDS:
1. The Committee noted that the Fund W2.S mostly operal2d like an investment organization without recourse to its enabling law. This has accounted for the management of the PTDF not being focused on prompt implementation of its programmes and projects. The urge to place funds in some banks which had no solid financial base led to huge sums being trapped in distressed banks like the City Express Bank and Trade Bank where Nl00 million and N560 million respectively were lost. (1. Sustained)
2. It is also noteworthy that in most cases, placements of funds were made without compliance with Section 9 of the Finance (Control & Management) Act which states that €œthe consolidated rev (€œlue. fund and any other public fund of the Federation subject to any express provisions of law regulating any such fund, may in part consist of deposits with a bank, or with joint consolidated Fund, either at call or subject to notice not exceeding six months, or of any investments in which a trustee in Nigeria may lawfully invest trust funds, and the disposition of moneys of the Consolidated Revenue Fund or of such other public fund (subject as aforesaid) for any such purpose shall need no legislative authority other than that contained in this section and may be made by the Accountant-General of the State Agents or Overseas Governments and Administration in accordance with specific instructions issued by the Minister€. (1. Not Sustained for reasons stated in observations No.1 on page 1)
3. The issue of funds placement is not whether or not funds were lost as is being argued, but whether or not the funds were utilized for the purpose for which they were meant in the first place. It is clear that the funds were not utilized for the purposes for which they were approved. (3. Sustained)
E. PTDF PROJECTS IN 2006
1. In 2006, a number of projects were embarked upon by the Fund. The Committee in the course of its work was urged to give a liberal interpretation of the objectives of the Fund as provided for in Section 2 of the Fund€™s enabling Act. The Committee however finds that laudable as some of the projects may be, they fall outside the purview and contemplation of Section 2 of the Act, no matter how liberally construed. (1. Sustained)
2. The Federal Executive Council (FEC) retroactively approved/ ratified these projects long after commitments had been made on them. (2. Sustained)
3. The Committee funds that FEC€™s approval no matter how well intentioned cannot legitimize an action that had no legal basis in the first place. (3. Sustained)
4. Section 2 of the PTDF Act provides as follows: (4. Sustained)
€œThe fund shall be available for the purpose of training Nigerians to qualify as graduates, professionals, technicians and craftsmen, in the fields of engineering, geology, science and management in the petroleum industry in Nigeria or abroad., and in particular, and without prejudice to the generality of the foregoing, the fund shall be utilized as follows:
a) to provide scholarships and bursaries, wholly or partially in universities, colleges, institutions, and in petroleum undertakings in Nigeria or abroad.
b) to maintain, supplement, or subsidize such training or education mentioned above.
c) to make suitable endowments to faculties in Nigerian universities, colleges, or institutions approved by the Minister.
d) to make available suitable books and training equipment in the institutions aforesaid., for sponsoring regular or as necessary visits to oilfields, refineries, petrochemical plants, and for arranging any necessary€™ attachments of personnel to establishments connected with the development of the petroleum industry., and for financing of and participation in seminars and conferences which are connected with the petroleum in Nigeria or abroad.
The projects commenced by the PTDF in 2006 included
1. ESTABLISHMENT OF AFRICAN INSTITUTE OF SCIENCE AND TECHNOLOGY (AIST) IN THE FCT.
1. The Committee noted from the submissions made that the total component of the institute would involve the establishment of a technology village designed to be the hub for the managerial training of the Oil and Gas personnel for the Gulf of Guinea. The contribution of PTDF in the establishment of the institute was $25 million. (1. Not Sustained because the Committee after considering the brief submitted to it by Mr. President, a liberal view was given to accommodate the Establishment of African Institute of Science and Technology (AIST) in FCT
)
Laudable as this project may seem, it is not envisaged by Section 2 of the enabling Act.
Furthermore, to spend $25 million on an institution that has no legislation to support it especially when the approval of the National Assembly is not sought is flagrant to say the least.
2. INCORPORATION OF GALAXY BACKBONE
As submitted by the PTDF, Galaxy Backbone Plc was conceived as a result of Mr. President€™s concern about the haphazard and uncoordinated ways various Ministries, Departments Agencies and the Private Sector continued to invest in core ICT infrastructure leading to duplication, lack of synergy and colossal wastage. Consequently, His Excellency, the President, Chief Olusegun Obasanjo, GCFR inaugurated a Presidential Committee on ICT infrastructure Harmonization which w ,s mandated to carry out an inventory of existing infrastructure in relation to COJA, CHOGM, NAN Networks, PS NET as well as the ICT network currently operated by Jigawa State Government, with a view to proposing a plan for the integration of these infrastructure into a national backbone which was christened National Information and Communication Technology Infrastructure Backbone (NICTIB)
This gave birth to what is now called Galaxy Backbone Plc which is designed to create tl1e required infrastructure for the attainment of digital inclusion for all by providing connectivity and internet services to all rural and under-served communities in the country.
The PTDF had spent the following sums on the project, consisting of:
i) UJD 5 million paid up capital converted to Naira for that purpose
ii) USD10 million for setting up the company and its offshore requirements for which letters of credit are to be opened.
iii) N25 million as company€™s running cost and iv) N250 million for legal services.
Commendable as this project may be, it falls outside the scope of Section 2 of the enabling Act.
2.1 THE LEGAL BILL - EMMANUEL CHAMBERS
The Committee noted that Emmanuel Chambers owned by foremost Nigerian Lawyer, Chief Afe Babalola, OFR, CON, SAN was retained to incorporate Galaxy Backbone Plc. The said Chambers subsequently submitted a bill of N300 million for its€™ services for which M€™f. President, Chief Olusegun Obasanjo approved N250 million. The PTDF in its submission to the Committee and its oral testimony averred that the said bill covered services other than the incorporation of Galaxy Backbone Plc. ( Sustained)
Chief Babalola (SAN) in his submission to the following:
i) Legal advice on incorporation of Galaxy Backbone Plc.
ii) Preparation of incorporation papers of Galaxy Backbone Plc.
iii) Liaising with Ministries of Finance, Science and Technology, News Agency of Nigeria and Accountant-General€™s Office for the purposes of incorporating Galaxy Backbone Plc.
iv) Registration of Galaxy Backbone Plc
v) Merger of existing ICT outfits in Nigeria vi) Handling of the Legal aspect of issuance of 41 % shares of Galaxy Backbone to the public
vii) Fulfillment of legal requirements to incorporate all existing ICTs in the country
viii) Acting as retainer to the PTDF on legal matters
While the Committee finds that the bill may have been justifiable given the scope of work, and the calibre of the lawyer involved, it however notes:
i) That the bill was not itemised
ii) That the brief to Chief Babalola had different milestones which were achievable at different times. Consequently, settling the entire bill all at once before all the milestones have been achieved amounted more or less to paying in full upfront. the approval of the President, Chief Olusegun Obasanjo not withstanding.
iii) There was no evidence that V AT / Withholding tax or other relevant taxes were paid on the bill.
iv) That PTDF was paying for a service that was outside its mandate.
3. PURCHASE OF COMPUTERS FOR CIVIL SERVANTS UNDER THE COMPUTER FOR ALL NIGERIANS INITIATIVE (CANI)
On 6th July, 2006 Mr. President launched the Computer for All Nigerians Initiative (CANI) Scheme, a Federal Government assisted Personal Computer (PC) ownership social programme designed to assist individuals to purchase PCs and Laptops at discounted prices under affordable and convening repayment plan. This scheme is being promoted by the Federal Ministry of Science and Technology (FMST) and the National Information Technology Development Agency (NITDA)
Following the launching of the Scheme which has as its objective, to increase PC penetration at homes, build a computer literate workforce and stimulate the development of vibrant PC hardware and software in Nigeria, the FMST recommended that the entire Public Service be encouraged to be computer literate by owning their own PCs and desk tops to be purchased by the Federal Government and sold to them at a subsidized rates. The Ministry therefore sought and obtained the approval of FEC to purchase various types of computers worth $10 million for that purpose. The computers are to be distributed to Civil servants at subsidized rate of about N2u, 000 per PC which is to be deducted monthly from their salaries along with N4, 000 administrative costs.
To realize the above stated initiative the PTDF was directed to release the sum of $10 million to the Federal Ministry of Science and Technology as a revolving loan payable by the benefiting civil servants whom are to be eventually refunded to PTDF.
The Committee finds this project outside the intendment of Section 2 of PTDF€™s enabling Act. Furthermore, the Committee cannot bring this project under the powers of the Fund to invest its monies because a revolving loan for computers that are already subsidized cannot in the view of the Committee amount to an investment. (Sustained)
4. SUPPLY OF €˜SKILL G€™ SCIENCE AND TECHNOLOGY EQUIPMENT TO SECONDARY AND TECHNICAL COLLEGES/ PCL YTECHNICS
The Honourable Minister of Education had sought and obtained the Federal Executive Council€™s approval which was conveyed to PTDF to intervene. in the sum of N2.514 billion for the supply of €˜Skill G€™ Science and Technology equipment to Federal Unity Schools, Technical Colleges of Education and Federal Polytechnics.
The Committee finds the intervention of the PTDF in the project as falling within its mandate. (Sustained)
5. PROGRESS REPORT ON OBASANJO ADMINISTRATION AND PHOTOGRAPHS FOR STATE HOUSE LIBRARY
This project was initiated to bring out a publication on the achievements of the Obasanjo Administration in an itemised and reader friendly style. The sum of N4.5 million was approved for it by the Executive Secretary, Adamu Maina Waziri.
The Committee finds the expenditure on this project as unnecessary since it does not fall within, by any stretch of interpretation, the PTDF mandate. (Sustained)
6. PURCHASE OF VEHICLES FOR COMMON POOL
The immediate past Executive Secretary of the Fund, Alhaji Adamu Maina Waziri made a request for the Purchase of vehicles for the pool and projects monitoring. A total of N37, 494,036 was approved. The vehicles purchased were:
One Peugeot 407 saloon
One Toyota Hilux pick up
6 nos Toyota Corrolla 1.8 GLE
TIle Committee finds that the purchases are regular especially as all necessary clarifications and approvals were sought and obtained before the purchases having established the need for the vehicles. (Sustained)
7. CONTRACTS FOR THE REHABILITATION OF PTDF HEADQUARTERS
The immediate past Executive Secretary, Alhaji Adamu Maina Waziri also carried out a renovation work in the PTDF Headquarters. This included the installation of a lift, main building renovation, installation of a 350 KV A generator, and the supply and installation of 500 KV A transformer.
The project was approved by the President, Chief Olusegun Obasanjo and subjected to due process though due process certification was yet to be received.
The Committee was not in a position to confirm whether or not the contract was inflated.
There will be need for the project to be verified and evaluated. (Sustained)
8. NOTE PURCHASE AGREEMENT BETWEEN UBA AND OTHER BANKS AND PTDF
This agreement is otherwise known as the Pioneer Consumer Car Purchase Scheme for Public Officers. The agreement is an interest yielding investment.
Under this agreement, the agencies involved are required to invest various amounts which are backed by promissory notes with a yield of 7% per annum. In this project the PTDF invested N2.4 billion.
The Committee finds that the Fund under its enabling Act can invest its funds as spelt out in 1 (c) thus: €œany sums from time to time freely donated or accruing to the government or the fund for the training and education of Nigerians in the Petroleum industry as the said Minister may direct and moneys in the said fund together with interest (if any) payable in respect thereof shall be applied for the purposes specified in section 2 of this Act.€
The Act does not Emit it to specific investments. The Committee consequently finds this investment regular. (Sustained)
9. DEFENCE INDUSTRY CORPORATION (DICON) REHABILITATION ACCOUNT.
Within the context of using existing human resources development facilities in Nigeria for an expanded manpower programme in the oil and gas industry the Federal Executive Council approved the sum of N1 billion to use DICON€™S facility for the training of welders in the oil and gas industry.
The initiative to build indigenous capacities and capabilities towards the attainment of government€™s local content objectives falls within the mandate of the PTDF. The Committee finds this project within PTDF mandate and therefore regular. (Not sustained because the Committee considers this project outside the purview of the PTDF mandate.)
G. IRREGULAR APPROVALS
By and large, it is pertinent to state that some of the approvals by Mr. President in 2006 and later ratification by the Federal Executive Council, for the release of PTDF funds were done in disregard of PTDF€™s enabling Act These include:
1 a) Establishment of African Institute of Science and Technology in the Federal Capital Territory (FCT);
b) Incorporation of Galaxy Backbone Plc;
c) Purchase of Computers for Civil Servants under the computer for all Nigerian initiative; and
2. Progress report on Obasanjo Administration and Photographs for State House Library, approved by the then Executive Secretary, Alhaji Adamu Maina Waziri.
Apparently because the Fund is a special purpose Fund for which by virtue of Section 80 (4) of the Constitution, appropriation was not required by the National Assembly, it was treated more or less by the Presidency like a security vote with scant regard to the provisions of the Act establishing the Fund to the detriment of its core objectives. Training for the oil and gas sector appears to have been relegated to the background as against unrelated projects for which there may have been appropriation elsewhere.
The fortunes of the Fund did not appear to have improved from when its supervision moved from the Vice President to the President.
(1 a) Not sustained because the Committee after considering the brief submitted to it by Mr. President, a liberal view was given to accommodate the Establishment of African Institute of Science and Tec1mology (AIST) in FCT.
b) Sustained
c) Sustained)
H. ISSUE OF RELEASE OF N20 BILLION AND N10 BILLION TO PTDF AND THE USE OF SAME TO FUND THIRD TERM AGENDA AS ALLEGED BY TH€ VICE PRESIDENT, ALHAJI ATIKU ABUBAKAR
On 10th May 2006, the PTDF obtained Mr. President€™s approval for the sum of N20 billion for the execution of the following projects:
i) Final finishing touches to the Upgrade of 8 nos Federal Universities.
ii) The Upgrade of Petroleum Training Institute to Federal University of Petroleum Engineering, Effurun, Warri.
iii) The procurement and supply of Laboratory Equipment Project to 102 Unity Schools and 6 Federal Polytechnics.
iv) The ICT Centres in 102 Unity schools, 20 colleges of Education and 24 Universities.
v) The National Technical Institute, Bonny, Rivers State.
vi) The Federal Polytechnic, Tugba, Bayelsa State
vii) The post graduate Overseas Scholarship Scheme.
From the submission of the PTDF, the Committee noted that on 13th September, 2006, the Accountant-General€™s Office authorized that the sum of N10 billion should be released to the PTDF.
PTDF Management in their oral testimony confirmed that till date only NI0 billion out of the required N20 billion
Therefore the evidence before the Committee is that so far, only NI0 billion of the approved funds were released to the PTDF. (Sustained)
J. OTHER FACTS
Additional facts obtained during the public hearing also indicated the structural weakness f the PTDF as an institution. Notable among them are:
1. The information gap between the PTDF and the 11. Sustained Accountant-General of the Federation regarding the inflows or out flows from the PTDF Reserve Account. (1. Sustained)
2. Some of the accounts kept in the name of PTDF by the 12. Sustained Accountant-General of the Federation was not known to the PTDF (2. Sustained)
3. The decision to restrict the) funding of the PTDF to a I 3. Sustained limit of 25% of signature bonuses or $100 million per annum whichever is lower was done without legal backing. (3. Sustained)
4. The supervision of the PTDF by the Executive has been grossly inadequate and this is compounded by the lack of the exercise of proper oversight responsibilities over the PTDF by the relevant Committees of the National Assembly particularly the Committees on Petroleum (Downstream) and Public Accounts. (4. Sustained)
1. As a result of poor supervision, bogus and unrealizable projects were recommended and funds approved for them. (1. Sustained)
2. Many of the projects for which monies were approved have not been implemented. (2. Sustained)
3. The increase in approval limits of the Executive Secretary of the PTDF from N700, 000 to N10 million was not in accordance with extant financial regulations. (3. Sustained)
4. Hussein Jalo, a former Executive Secretary of the PTDF from July 2005 to November, 2005 is under investigation by EFCC and the sum of N49 million and 6 nos vehicles have so far been recovered from him. (4. Sustained)
Given the time frame for its assignment, funding and logistics constraints, the Committee was unable to verify any of the projects approved for the PTDF. (Sustained)
The Committee also considered the Marine Float Limited Accounts which has generated a lot of public interest to be outside its Terms of Reference as no PTDF funds were traced directly to the said account. It was at best a second line beneficiary of the PTDF funds. (Sustained)
The Committee notes that contrary to arguments that no PTDF funds were lost in the various placements, the sums of N400 million loaned to NDTV, N420million to Mofas Shipping Company Limited, N730 million to NDTV and N300 million to Transvari Services Limited by TIB remain unrecovered. Though the loans have since been restructured with the acquisition of TIB by Spring Bank Plc., the loans cannot however be recovered outside the restructured framework without endangering the financial health of the bank.
Not sustained because the Committee established that the only money lost was the interest waiver of $320,000 which approval was given by Mr. President when restructuring repayment arrangement with Spring Bank Plc.
NEW FINDINGS
In furtherance of the Terms of Reference of the Committee especially as it relates to available new evidence and information, the Committee extended invitations to Mr. President, Otunba Johnson Fasawe, the Managing Directors of Spring Bank and Bank PHB Plc, the Accountant-General of the Fee eration as well as the Executive Secretary of the PTDF to appear before it. The Committee also sought for information from the Chairman EFCC, the Vice President, Alhaji Atiku Abubakar and the Registrar, Cooperate Affairs Commission among others.
Additionally, the Committee embarked on PTDF projects assessment in Abuja on Saturday 17th March, 2007.
The Committee finds that:
1. The approval given by the Vice President in respect of the $20 million on 14th October, 2003 was not authorized by Mr. President. This is contained in Mr. President€™s response to the Committee€™s letter on the issue (see annexure 4 and 5)
2. Marine Float account is owned by the Vice President while Mofas is owned by Otunba Johnson Fasawe. These accounts were used for the Obasanjo Atiku campaign activities. This was confirmed by the Vice President in his submission to the Committee (see annexure 6) and by Otunba Johnson Fasawe when he appeared before the Committee.
3. The sum of N700 million and N150 million were paid by Mr. President into the Mofas account on 12th February 2004 and May 16th, 2004 respectively. (see annexure 7 and 8).
4. That the Vice President has no business interest in NDTV. This was obtained during the testimony of Otunba Johnson Fasawe before the Committee.
5. That the Deposit/Reserved Account mentioned by the Accountant-General of the Federation in the name of PTDF was closed in December, 2006 when accruals into it stood at $1.7 billion but as at the time of closure the amount was $1.2 billion.
6. The laying ceremony for the establishment of the African Institute of Science and Technology (AIST) in FCr was performed on 27th February, 2007.
7. Of the eight project enumerated when the request for $125 million was being made in 2003, only two have so far commenced. These are:
a) Upgrade of faculties of 8 Nigerian Universities. b) Upgrade of Petroleum Training Institute (PTI) in Efurun, Warri. .
8. Of all the funds that have accrued to PTDF account from inception, only the sums of $125 million, $20 million and N10 billion respectively and have been released to PTDF.
Recommendations
1. The Committee recommends that in the case of deposits that were placed in Trans International Bank (TIB) and Equatorial Trust Bank (ETB), the circumstantial coincidence that existed between the deposits and the loans could not be used to link PTDF money with the companies that were granted loans. If there are any irregularities, it is the responsibility of the Central Bank of Nigeria (CBN) to sanction the bank.
2. a) In respect of the approvals of $125 million on 25th April, 2003 and the subsequent placements of $115 million in Equatorial Trust Bank (ETB) and $10 million in Trans International Bank (TIB), the committee is satisfied that the process was followed. The subsequent investment was within the contemplation of section 1 ( c) of the PTDF Act and section 23 of the Financial (Management and Control) Act.
b) However, in the case of the additional $20 million for which the then Executive Secretary, Hamisu Abubakar misrepresented the facts and wrongfully obtained approval of the Vice President. The committee recommends that EFCC which is presently investigating the matter should continue and prosecute him any offence disclosed.
3. Hussani Jalo, former Executive Secretary of the PTDF from July 2005 to November, 2005 is under investigation by EFCC and the sum of N49 million and 6 nos vehicles have so far been recovered from him. The committee recommends that EFCC which is presently investigating the matter should continue and prosecute him for any offence disclosed.
4. With regards to the approval which the Vice President gave in respect of the $20 million on 14th October, 2003, without the authority of Mr. President, (See annexure€¦€¦) the committee views the approval of the Vice President as illegal and therefore recommends that the Vice President, Alhaji Atiku Abubakar be referred to the Code of Conduct Bureau for further action.
5. In respect of some projects commenced by PTDF in 2006 viz:
i. Incorporation of Galaxy Backbone
ii. Purchase of Computers for Civil Servants under the Computer for all Nigerians Initiative
iii. Defence Industry Corporation of Nigeria (DICON) Rehabilitation. For which President gave approval and later got them ratified reactively, the committee views the action of the President, C-in-C, Chief Olusegun Obasanjo, as illegal and therefore refers Mr. President Chief Olusegun Obasanjo to the Code of Conduct Bureau for further action.
The committee also recommends that:
6. In respect of the progress report on Obasanjo Administration and Photographs for State House Library, for which the former Executive Secretary approved N4.5million, the committee views the project as outside the mandate of the PTDF Act. The committee recommends that the Executive Secretary, Alhaji Adamu Maina Waziri should be referred to the Independent Corrupt Practice (ICPC) for further action.
7. The committee sustains recommendation No. viii of the Ad-Hoc Committee that all projects approved for the PTDF from 2003 till date should be verified and evaluated by the relevant committees of the Senate, that is:
a) Committee on Petroleum Resources (Upstream) and
b) Committee on Public Accounts; or alternative
c) Ad-Hoc Committee for this purpose
8. The committee sustains recommendation No. xii of the Ad-Hoc committee that all accounts in the name of PTDF within and outside Nigeria should be established by the Senate Committees on Petroleum Resources (Upstream), Public Account; or alternatively an Ad-Hoc Committee for this purpose.
9. The Committee sustains recommendation No. xv of the Ad-Hoc Committee that the Agencies like the Central Bank, Ministry of Finance, Office of the Accountant General of the Federation, Department of Petroleum Resources and the Office of the Auditor General of the Federation that have direct bearing with the Fund should play their roles as expected to aid the Fund in meeting the objectives for which it was established.
10. The maintenance of four different accounts by the Accountant General of the Federation with the CBN in the name of PTDF, namely: Reserve Account, Inspectorate Account pursuant to the approval of the letter initiated by the then Special Adviser to Mr. President on Petroleum and Energy Engr. Funsho Kupoluku (see appendix€¦) for which approval was given by Mr. President putting a restriction on PTDF funding, the Committee states that the approval was illegal and a contravention of Section 1 of the PTDF Act. In this regard both Mr President and Engr. Kupoloku are culpable.
The Committee recommends that all accounts opened in contravention of section 1 ( c) of the PTDF Act should be closed be enforced.
11. The Committee recommends that all accounts opened in contravention of section 1 ( c) of the PTDF Act should be closed forthwith.
12. That the Petroleum Technology Development Fund Act should be amended to accommodate the current realities in the oil and gas industry as well as the Solid Mineral Sector.
APPRECIATION
The Committee wishes to thank the Senate of the Federal Republic of Nigeria for giving It the opportunity to serve.
PRAYER:
That the Senate do receive and consider the recommendations of the Committee.
Senator Umaru Ibrahim Tsauri
Chairman.
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