Ikoyi Billions: At the Cross Roads of Financial Crimes and National Security

Bolaji Adebiyi in Abuja

Vice-President Yemi Osinbajo’s committee set up to investigate the N13.3 billion recovered from a flat in Osborne Towers, Ikoyi, Lagos got cracking on Monday, reviewing replies to questionnaires it sent out at the weekend to principal characters in the inquiry that intelligence quarters warn could expose the underbelly of the nation’s foremost spy organisation, the National Intelligence Agency (NIA).

The committee, which also includes the Attorney-General of the Federation (AGF) and Minister of Justice, Mr. Abubakar Malami (SAN), and the National Security Adviser (NSA), Maj.-Gen. Babagana Monguno (rtd), was constituted by President Muhammadu Buhari last week to investigate how and by whose authority the money claimed by the NIA was made available to it, and to establish whether or not there had been a breach of the law or security procedures in obtaining its custody and use.

The committee is also to investigate allegations of violations of the law and due process made against the Secretary to the Government of the Federation (SGF), Mr. Babachir Lawal, in the award of contracts under the Presidential Initiative on the North East (PINE), running into millions of naira.
The Director-General of the NIA, Ambassador Ayo Oke, and Lawal were suspended last week pending the outcome of the investigation which report is expected within 14 days.

While Lawal’s troubles began in December last year when the Senate indicted him for allegedly awarding PINE contracts to his company, Rholavision, Oke’s began on April 12, 2017 when the Economic and Financial Crimes Commission (EFCC) raided the Osborne apartment, hauling in N13.3 billion. It is the biggest cash found in a single operation since the whistle blowing policy of the federal government started yielding fruit.

Although the EFCC, which had presumably leaked the find to the media, left the public in doubt about the ownership of the billions, the doubt was cleared when THISDAY reported that the funds belonged to the NIA, which claimed that the flat was a safe house in which it kept some of its money for covert operations.

The agency was later to explain that the money was part of the $289 million intervention fund approved for its covert operations and infrastructure development by President Goodluck Jonathan in 2014. Some of the operations and projects in Abuja, according to the agency, had been completed, while others are still ongoing. It said the Ikoyi money was warehoused for some of the operations in Lagos.

Questions that immediately arose from this claim were whether the president, to whom the agency’s DG accounts to directly, and the NSA, who coordinates the nation’s intelligence agencies, knew about the money? Why was the money not kept in the agency’s headquarters that was more secure? Why was it that the wife of the agency’s DG ferried the money to the safe house? And whether it is usual for the agency to keep such a large amount of money in cash?

These are obviously questions that the Osinbajo committee would have to unravel.
But intelligence experts that spoke to THISDAY on Monday warned that except the investigation is handled with extreme care, the nation’s intelligence community might be undermined with dire implications for national security. They contended that because of the security implications of the operations of intelligence agencies, they operate largely under cover, making their modus operandi unusual, clumsy and, in fact, sometimes illegal.

“The unusual operational practices of intelligence agencies are a worldwide phenomenon,” a source said on Monday, adding: “When Nigeria needs to intervene in the politics of another country, say, Liberia, to install a president that will support its policies, how do you think it does it? It is the NIA that is used.

Where in its books would you find such operational funds?” Another typical example was the $400 million cash flown by the United States government to Iran after a deal was struck to end Iran’s nuclear programme.
Asked if such unusual operational mode is not subject to abuse, the source admitted it could, but argued that there were standards and rules, guiding intelligence operations, explaining that in terms of financial accounting, the agencies are usually responsible directly to the president.

“So there can be no such thing as money laundering as far as intelligence is concerned because the agency’s operatives would always be in possession of money for covert operations,” he said.
Basically, what the source was pointing out was that because the world of intelligence and espionage is almost always murky and clandestine, it is likely that its business is not usually done through bank transfers and cheques, and almost always done by cash. “It’s like asking the CIA to pay informants through transfers,” he quipped.

Actually, by the provisions of Paragraph 12(1) & (2) of the National Intelligence Agency Instrument No.1, a subsidiary legislation to National Security Agencies Act, 1986, the NIA accounts directly to the president and its accounts are prohibited from external auditing.

Obviously aimed at protecting intelligence operations, the instrument derives from an October 21, 1960 memo from Prime Minister Abubakar Tafawa Balewa to the Director, Directorate of Research, Ministry of External Affairs, Alhaji Aminu Sanusi, directing the latter to account directly to him.

“You will be responsible, through the Secretary to the Prime Minister, to me personally for the proper expenditure and accounting of all funds from the secret vote. Those funds will not be subject to detailed audits, but you will be required to render a certificate to the Secretary to the Prime Minister on 1 January to 1 July of each year, showing the total sum expended during the period and a breakdown of the main headings under which such expenditure has been made,” the prime minster said in the memo to the director, who is the precursor of the DG, NIA.

Did the DG, NIA comply with this law? Insiders told THISDAY that Oke did. In his April 2015 general brief to the president on the state of affairs of the agency, he itemised the $289 million intervention fund approved and released to the agency by the Jonathan administration in November 2014. In another memo to the NSA in January 2016, he gave more details of the funds, including projects being undertaken, the amount expended, balance in the bank and cash at hand.

Based on his report, the NSA set up a verification team, which inspected the projects and submitted its report in February 2016. The NSA wrote back to the DG, NIA on 17 May 2016, stating that the detailed report of NIA’s projects and exercises had been presented to the president who was pleased with the agency’s foresight in developing the critical infrastructure outlined in the report.
If Oke filed his report with the appropriate authorities, why then is he in trouble? Insiders suggest that his bosses might not have read the reports and secondly that the inter-agency rivalry might have been at the root of his woes. Both might be at work.

While the president might not have been able to read the report because of his busy schedule that was compounded by his health issues, Monguno is said to loath reading. The reports, THISDAY gathered, are however, part of the annexures to the reply to the questionnaire sent to him by the Osinbajo committee.

There has been a running battle between the EFCC and NIA since April last year over the financial operations of the spy agency. The EFCC had instituted a secret investigation into the Central Bank of Nigeria (CBN) account of the NIA. The intelligence agency only became aware of the investigation when the account of Julius Berger PLC, one of the contractors handling its projects, was blocked.

Enraged by what it believed to be a breach of the law and security protocol, the NIA protested to the NSA who in an April 19, 2016 memo to the EFCC asked it to “refrain from the external audit of NIA and other intelligence agencies” as it contravened Paragraph 12(1) & (2) of NIA Instrument No 1 issued under the NSA Act, 1986.

The EFCC was apparently not happy with the NSA’s restraining order, insisting that it had the powers to investigate suspected financial crimes. The NIA opposed this claim on the grounds that intelligence service involves national security, which cannot be enquired into by a non-intelligence body like the EFCC. This conceptual disagreement perhaps explains why on April 12, 2017 when the NIA requested the EFCC to call off its raid on its Osborne flat, the anti-graft agency refused.
This is one big issue that the Osinbajo committee would have to crack: Can the warehousing of the billions claimed to be operational funds of the NIA in the Ikoyi flat be classified as a financial crime (money laundering) that the EFCC is empowered to investigate and prosecute, or is it a national security issue that the anti-graft agency is precluded from enquiring into?

Other questions that must be addressed would have to focus on the operations of the EFCC, which in several instances has been known to put the cart before the horse. Did the EFCC obtain a search warrant to break into the Ikoyi apartment? If it did and proceeded to the court to obtain a temporary forfeiture order, did it do a search at the Lagos Lands Registry to ascertain the owner of the flat? Did it extend its search to the Corporate Affairs Commission (CAC) to verify the shareholders/directors of the company said to have bought the flat? Why did the EFCC ignore the NIA DG and the agency’s operatives when they owned up to the billions discovered in the flat? With the lid blown open on what was obviously a covert operation, who takes responsibility for the glaring breach of security protocol?

Most importantly, the Osinbajo committee has to ensure that in trying to establish probity and accountability, his committee will also attempt to ensure that what security and intelligence agencies do in the “dead of the night” to keep us safe, is not compromised.