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$27m Embassy Scandal: Why We Petitioned the National Assembly

By Elombah Daniel
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Being Statement Read Today, 18 July 2013 At The Resumed Hearing of The Senate Committee on Foreign Affairs investigating the Matter.

The Statement was read by My Law Mefor on behalf of the Transform Nigeria Movement.

The Transform Nigeria Citizens Initiative wrote this petition because we believe former Ambassadors and present Nigerian Embassy officials in Washington DC, including Obiozor and Adefuye have questions to answer over the embassy properties they sold, and disparities in money realised and recorded over the transaction.

The questions are: How did Nigeria's former Ambassador to the United States, Mr. George Obiozor sell properties belonging to the Nigerian Embassy in the Washington DC area? Why are there vast disparities in the records of the sales? Where is the $27million realised from the sold properties?

As the convener of the Transform Nigeria Movement and the publisher of elombah.com news website, i have followed this controversy since 2005 and have come across reports over the property sales meticulously which show that the sale of the properties and the handling of its proceeds may have been anything but transparent. I have also spoken severally to the lawyer that handled this transaction on behalf of the embassy who believes that the proceeds may have been stolen!

Also at issue is the seizure of proceeds of tax returns on the properties by the Washington, DC lawyer, Emeka Ugwuonye, for services for which he claimed the Nigerian authorities owed him unpaid fees.

THE FACTS
Between August 2005 and April 2007, four choice properties belonging to the Nigerian embassy were sold by Ambassador Obiozor with approval from Abuja from one H.C. Osuagwu.

Another building, which was said to have been of a lower standard and but with a higher monetary value, was also purchased for the ambassador as his official residence.

These transactions include:
A property located at 3100 Woodlawn Avenue in Washington DC, which was sold in August 2005 for $3.25 million

A property located at 1333 16th street, across from the Ritz Hotel in Washington DC, which was sold for $7 million on May 31st 2006;

A property at 2201 M Street, Northwest, Washington DC, which was sold for $14.2 million, the biggest sale but there are no public records.

The Ambassador residence, at 6705 Connecticut Avenue, Chevy Chase, Maryland, which was sold for $1.6 million in August 2007; a new replacement residence had been bought in April of the same year, four months earlier.

In 2009, Saharareporters said they obtained from Maryland Department of Assessments and Taxation which revealed a huge discrepancy between the price listed as the sale price of the Ambassador's former residence when it was sold in 2007, and the date of its sale.

Similarly, the lawyer who handled the transaction, Emeka Ugwuonye, said that the former Ambassador's residence in Chevy Chase, Maryland, was sold for $3.2 million in February 2007. That differs from the publicly available records available to Saharareporters which shows that the house was sold on 1 August 2007 for $1.6 million to Edelen, Steve and Patricia Nava Edelen (an easy 50 per cent difference). Sources told Saharareporters that the property was split into two and sold separately, with a batch of transactions clearly unreported in Maryland's public records.

Also of interest is the new residence that was bought for the ambassador at 10 Stapleford Hall Court in POTOMAC, Maryland, for which Nigeria paid $2.7 million. The old Ambassador's house in Chevy Chase sat on a bigger land area of 2.17 hectares, and included such facilities as a swimming pool.

But the sale transactions also left 12 out of the 16 principal officers of the Nigerian Embassy in Washington DC, including the Deputy Chief of mission, having to go out and rent houses at exorbitant rates, Saharareporters reported.

These transactions raise various levels of suspicion, including the quality of information made available in Washington DC public records at the Metropolitan Regional Information Systems (MIRS) regarding these properties. For instance, two of the properties: the former Deputy Ambassador Residence, 3100 Woodlawn Avenue, and 1333 16th Street in the North-western Washington DC area were listed, contracted for sale and the transaction closed on the same date- August 23 2005 and June 6 2006.

Further checks also reveal that the buyer of the Woodlawn property sold the house to another buyer in August 2008 three years later for over $6 million even as the housing market took a downturn in the US. This lends credence to the allegation that the property may have been deliberately undervalued in 2005 when Obiozor sold it, as property values in the area did not double over that two-year period. Besides, the property was never listed on the market, as the real estate property market database shows that the number of days it was on the market before being sold to have been zero ('0').

Maryland-based lawyer, Emeka Ugwuonye, handled all the sales and purchase transactions. A real estate Long & Foster Real Estate, Inc was fully involved in the sales.

Mr. Ugwuonye confirmed to Elombah.com that he offered legal services for the sale of the four houses as well as the purchase of the Ambassador's new house. For his services Mr. Ugwuonye was paid a retainership of $700,000 or more. when the Internal Revenue Service (IRS) returned $1.55 million to the Nigerian mission in taxes it had withheld on the transactions. This money remained in the hands of Mr. Ugwuonye.

The lawyer later to wrote to the embassy through his lawyers at Bruce Fein Associates that he had 'applied' the tax refunds to legal services for which he was being owed by the Nigerian government in various litigations he engaged in on behalf of the government. Principally, Mr. Ugwuonye said he was owed legal fees from his defence of General Abdusalam Abubakar in the human rights litigations in Chicago. That matter concerned the death of M.K.O Abiola at the hands of the retired army general while he was the military dictator in charge of Nigeria in 1998.

THE CONTROVERSY
Nigerian embassy officials are torn in different directions as gladiators in the dog-fight turn to primordial ethnic sentiments to the gain upper hand in deciding who controls the large pot of money comprising the proceeds from selling the embassy's properties, an amount in the region of $27 million, although it not yet clear what the exact prices are recorded in Nigerian mission records regarding the sales.

However, what prompted suspicions that even the amount declared by the embassy as realised from the transactions may have disappeared was that Last year, in May 2012, Elombah.com reported that some American banks decided to place an embargo on accounts belonging to Nigeria missions in New York and Washington D.C. According to that report, two leading American banks, Bank of America and Wells Fago, the Nigerian missions, the country's Embassy In Washington D.C and the permanent mission to the United Nations had their account frozen following the failure of Nigerian diplomatic officials to satisfactorily explain suspicious use of a total of $3.6m, wire through separate accounts with the two banks.

The officials of the two banks suspected that accounts belonging to the two missions may have been used as conduits for laundering and other unscrupulous activities, after being flagged by relevant financial monitoring agencies in the united State, auditors from the two banks decided to scrutinize the missions' books.

The reports further alleged that some Nigerian officials developed the habit of simply dumping funds with affected accounts without justifiable end use, thus turning the missions to conduit for siphoned away cash from Nigeria.

It was in their effort to disparage the media reports and quell media frenzy over these money laundering allegations, that the Nigerian ambassador to the USA, Mr Adefuye, released the closing bank statement of M&T Bank, and lo and behold, the balance left in the account in which $27 million dollars realised from the sales less the conveyance expense was less than $400,000.

These prompted the questions: what happened to the money?

On June 24 2012, President Goodluck Jonathan on Saturday directed the Economic and Financial Crimes Commission, EFCC to investigate Nigeria's bank accounts in the United States. Fielding questions during his third Presidential media chat at the Aso Villa Abuja, Mr. Jonathan said he ordered the investigation after reading the reports of money laundering related to the bank accounts. Till date, no one has revealed the results of of this investigation.

Elombah.com again published an article, 'The Minister of Foreign Affairs Implicated in the Ongoing Investigation over the Nigerian Embassy Banking Scandal', on June 27 2012.

We pointed out that the behaviour of the officials of the Ministry of Foreign Affairs over the ongoing stories about the Embassy account has been rather strange. Throughout the past week, elombah.com said, every effort to get information from the Ministry led to someone or another pleading for patience. There was considerable effort to mislead the press.

Why would a Ministry not be able to explain a simple matter about the bank account of its Embassy? Instead, the Ministry kept redirecting all inquiries to the Embassy. And finally the Embassy posted a weak and feeble statement on its website, stating that the embassy account was closed but not frozen. The Embassy also denied money laundering stating that the embassy account was closed because of a US Law - The Patriot Act.

The Ministry was so eager to point to that statement as if it could have answered all the questions. To worsen the situation, when effort was made to obtain more information from the Ministry, the Ministry officials handed out a printout of the report of a news website, Huhuonline.com which contained their explanation.

Many journalists were frustrated that such an online report was made a substitute for the explanation that the Ministry ought to have.

Journalists spoken to on this matter complained that they were supposed to obtain information from the Ministry, and not for the Ministry to use news reports as its explanation. 'Why make a simple thing look like a maze'? They wondered.

It was clear that whatever is going on in Washington, the Ministry has much interest in covering it up, some concluded.

How much money was realized from the sale of the properties in the United States, where were the funds kept, how were the funds were spent, etc.

Up till date, enquiries from the embassy will say 'over $20m was realized from the sale" without giving actual figures.

The attention of Elombah.com was further drawn to this line of inquiry when it was discovered that President Jonathan had invited the EFCC into this matter directly by himself.

At the media chat that Sunday, President Jonathan had said, 'Only yesterday, I directed EFFC to go and investigate our bank accounts in the US because there was this story in one paper that the US authorities are looking into, because there are some money transfers and so on.'

Government observers have wondered why the President did not ask the Minister of Foreign Affairs to invite the EFCC to investigate the matter, as he did in the case of oil subsidy fraud allegations.

Recall that in that case, the President authorized the Minister of Petroleum to invite the EFCC. Why did the President himself directly invite the EFCC in the case of the Embassy? As we pressed for answers over this question, a person in a position to know the truth of what is going on told Elombah.com that the President's approach over the matter was a clear of vote of no confidence on the Minister of Foreign Affairs.

'The failure of Ambassador Olugbenga Ashiru to properly investigate such a serious issue only shows bias', Elombah.com was told.

We suspected that it was the failure of the The Minister to properly investigate this matter that made the president to bypass the minister and order the EFCC to investigate. It was also suspected that given the magnitude of the problems, it would have been impossible for the Ambassador to act alone without support or connivance with his supervising Minister.

On June 28 2012, the Honourable Minister of Foreign Affairs of the Federal Republic of Nigeria, His Excellency, Ambassador Olugbenga Ashiru issued a press statement in response to our report of 27 June, but we noted that while the statement sought to discredit our reports, it did not say anything at all about the whereabouts of the $27m.

In January 2013, after waiting fruitlessly for the result of the EFCC investigation ordered by the president to be made public, we felt compelled to write this petition to the NASS.

Interestingly, since the commencement of this Senate investigation, some individuals have waged a campaign of calumny against us for writing this petition. Even members of the media including the TELL Magazine and Saharareporters have been co-opted to wage a media war against the author of the petition.

It was in the course of one of such media campaign that Mr Ade Adefuye, professor and Nigeria's ambassador to the United States admitted his role in this corruption allegation tabled before the Senate by Transform Nigeria Citizen Initiative, led by Daniel Elombah, a London-based Nigerian.

Adefuye, while refuting claims that the embassy under his watch squandered $27 million, disclosed to TELL Magazine that he only met $10 million in the account when he assumed office as ambassador in 2010. While explaining why part of the money was spent, the ambassador added that embassy operations in Washington D.C were poorly funded, as it was only receiving about $200,000 of its monthly entitlement of $600,000. Explaining his role in the saga Adefuye told TELL Magazine that "In order to meet its financial obligations, he sought and got authorisation from the ministry of foreign affairs to make up for the shortfall in the embassy recurrent expenditure from the $10 million in the embassy's accounts. This, he explained, was done pending the time the embassy's funding would have been adequately taken care of by its budgetary allocation."

However, Nigerians should note here that Ambassador Adefuye thereby admitted to an illegal if not criminal behaviour. TELL did not even understand the implications of its admission. What TELL admitted on behalf of the Ambassador is the classic definition of misappropriation, which is a crime. What due process did the Ambassador follow to spend the 10 million dollars? Was that not what put Bode George in jail?

By law the entire money should have been returned to the Federation account by December 31st of the year in which the properties were sold and only the National Assembly has the right to appropriate the funds. Not even the president can spend the money for whatever purpose without appropriation by the National Assembly.

Also of interest is the Ministry of foreign affairs statement to the media that the entire money was properly spent and accounted for. This Committee should ask the Minister; "by whom?'

Transform Nigeria Citizens Initiative commends the Senate, and it's Committee on Foreign Affairs for initiating this investigation. We also use this opportunity to urge Nigerians to simply allow the Senate fulfill their oversight function and not pre-empt the outcome of the Senate hearings. We equally urge the senate Committee on Foreign Affairs not to be intimidated by current adverse media reports.