Nigerian vote not credible, say EU observers

By Tom Ashby

Reuters
Monday, April 23, 2007; 8:43 AM

ABUJA (Reuters) - European Union observers said Nigeria's presidential election could not be considered credible on Monday as early results showed ruling party candidate Umaru Yar'Adua set for a landslide win.

Outgoing President Olusegun Obasanjo said elections were not perfect, but appealed to Nigerians not to lose faith in the democratic process.

The ballot for the first handover of power from one civilian leader to another in the vast oil producer was undermined by ballot-stuffing, violence and a shortage of millions of voting papers on Saturday.

"These elections have not lived up to the hopes and expectations of the Nigerian people and the process cannot be considered to have been credible," said Max van den Berg, chief EU observer, in a statement.

A local coalition of civil society observers called for the cancellation of the vote to allow a re-run in Africa's most populous country, scarred by decades of corrupt dictatorship since independence from Britain in 1960.

"The election was a charade. A democratic arrangement founded on such fraud can have no legitimacy," they said.

The EU observers called for urgent action over the election, but did not say if it should be cancelled and held again.

World leaders had expressed hopes that Nigeria, West Africa's economic powerhouse, would emerge as a major force for the spread of democracy across the continent.

Obasanjo appealed to any aggrieved parties to use legal avenues to seek redress, adding that results so far did not deviate from projections.

YAR'ADUA LEAD

Partial results from a third of Nigeria's 36 states showed Yar'Adua of the ruling People's Democratic Party (PDP) with 9.8 million votes versus 1.3 million for his nearest rival, local media said. A definitive result is expected later on Monday.

But the figures also revealed more evidence of fraud. Results from one area of Delta state were cancelled because they showed more votes than registered voters. Residents had reported a near total absence of ballots on voting day.

Obasanjo, whose election in 1999 returned Nigeria to democracy, must step down after failing to rewrite the constitution and stay for a third term.

Former military ruler Muhammadu Buhari, the leading opposition candidate, said he would not accept the result and called on parliament to impeach Obasanjo.

The opposition said it might bring its supporters out on the streets if the PDP claimed victory.

About 65 people have been killed in violence related to both the presidential election and regional polls a week earlier in the world's eighth-largest oil exporter. World oil prices rose on Monday because of the fears of further violence.

The government said unnamed coup plotters were trying to discredit the poll after failing to blow up electoral headquarters on election day with a petrol tanker.

Police arrested protesters at the electoral headquarters in the capital Abuja on Sunday and banned all rallies.

Election commission head Maurice Iwu acknowledged some materials arrived late at polling stations but said the "big picture" was of a free and fair election.

Analysts had predicted Yar'Adua would win due to unrivalled funding and the powers of incumbency, but Buhari had been expected to put up a credible challenge because of widespread disaffection with poverty and crime.

(Additional reporting by Austin Ekeinde in Port Harcourt, Camillus Eboh and Estelle Shirbon in Abuja, Tume Ahemba in Lagos)

© 2007 Reuters

Halliburton: In the Company of Thieves

This Week in Babylon

Posted on Friday, March 9, 2007. Halliburton in Nigeria, Iran Pushback, Comfort Women Make Abe Uncomfortable

Sources

Over the past few years, information has been dripping out about a scheme in which an international consortium led by a Halliburton subsidiary apparently bribed Nigerian officials to win construction contracts worth $5.3 billion. The four-member consortium, called TSKJ, beat out a bid from another group headed by Bechtel Corporation, and it now seems possible that Bechtel may be dragged into the scandal as well. In addition, there are questions about whether Vice President Dick Cheney, the former head of Halliburton, had knowledge (or chose not to have knowledge) of the illegal payments.

The story dates to 1995, when TSKJ was awarded an initial contract for $2.2 billion by the notorious regime of General Sani Abacha. It subsequently emerged that the consortium's agent in Nigeria, a British lawyer named Jeffrey Tesler, had created a firm in Gibraltar to manage the consortium's Nigerian business, and it seems that the Gibraltar company made $176 million in mysterious payments related to the project, with much of that money believed to be kickbacks to Nigerian officials.

When the original deal was signed in 1995, TSKJ was headed by an American firm called M.W. Kellogg. Halliburton got involved in 1998 (when Cheney was CEO) and it purchased Kellogg's parent firm. Kellogg was then merged with Brown & Root, a Halliburton unit, to form KBR, which continued to manage the firm's business in Nigeria. In March 1999, with Cheney still at the helm, TSKJ won a second contract worth $1.4 billion, and three years later, when Cheney was already V.P., the consortium won a third contract worth $1.7 billion.

Ever since these accusations first saw light, Halliburton has claimed that any dirty deals that took place occurred almost entirely before it became a partner in the consortium. But the series of agreements that TSKJ signed with Tesler to manage the deal includes several agreements that were made after Halliburton got involved, as well as one signed when Cheney was CEO. A few years ago, I interviewed Olivier Schnerb, an attorney for a former executive with another TSKJ member, the French firm Technip, and he affirmed Tesler made questionable payments well after Halliburton joined the project. “The plan,” he explained, “was to corrupt Nigerian officials.”

Meanwhile, Le Figaro has reported that Tesler deposited several million dollars in a Swiss bank account controlled by A. Jack Stanley, whom Cheney had picked to head KBR and oversee the company's interests in Nigeria. Tesler acknowledged making payments to Stanley, but he claims they were only to obtain local Nigerian currency for the project. This seemed far-fetched even to Halliburton, which subsequently severed all ties with Stanley on the grounds that he had violated the company's “codes of business conduct.”

That's the recap. But Halliburton's newly filed 10-K with the Securities and Exchange Commission includes some interesting new revelations and hints that more damaging information will be coming down the pike. According to the filing there are ongoing probes into the matter in the United States (by the SEC and the Justice Department), in Nigeria, in France, and in Switzerland. “We also believe,” reports the filing, “that the Serious Frauds Office in the United Kingdom is conducting an investigation.” According to the filing the SEC has issued a subpoena to Stanley, “and to others, including certain of our and KBR's current and former employees, former executive officers of KBR, and at least one subcontractor of KBR.”

After becoming the target of multiple international investigations, Halliburton says that it believes that payments were in fact made to Nigerian officials. In fact, the 10-K states that information uncovered by the company last summer indicates that, “prior to 1998, plans may have been made by employees of The M.W. Kellogg Company to make payments to government officials in connection with the pursuit of a number of other projects in countries outside of Nigeria.”

A well-placed source has been telling me for years that TSKJ and the Bechtel consortium secretly coordinated their bids on the Nigerian contract, and that a loser's pot was created to compensate the also-ran bidder. I'd never been able to confirm that, but the Halliburton filing suggests that there may be something to the allegation: “Information has been uncovered suggesting that Mr. Stanley and other former employees may have engaged in coordinated bidding with one or more competitors on certain foreign construction projects.”

Antony Goldman, a London-based political-risk consultant specializing in West Africa, wonders how Halliburton managed to uncover all of this troubling information only after investigations were launched on three continents. “The filing suggests that Halliburton's due diligence in acquiring Kellogg and its efforts to understand how its subsidiary had obtained this exceptionally lucrative business in Nigeria couldn't have been terribly rigorous,” he told me. “It looks like it could have done far more to explore the matter and to protect shareholders from this type of exposure.”

Iran Pushback

For months the Bush Administration has been claiming that it has the goods on Iran's meddling in Iraq and on its dirty doings in other parts of the world. In a series of press briefings and statements, officials have trotted out a host of evidence, including pictures of weapons captured in Iraq that have serial numbers “proving” that they were made in and supplied by Iran. But for some mysterious reason, these claims by the White House have encountered some skepticism, even (of all places) on Capitol Hill, according to an article (not online) by Laura Rozen in National Journal.

Rozen says that the case against Iran appears to be “murkier and less decisive than the thrust of recent administration statements suggests,” and that the Senate Select Committee on Intelligence is “moving aggressively to vet” a series of past National Intelligence Estimates on Iran. She identified three NIEs that are being reviewed:

One from May 2005 entitled “Iran's Nuclear Weapons Program”; a second from the same month that includes a look at Iran's foreign relations; and a third from three months earlier that focuses on Iran and terrorism.

According to Rozen's story, members of the Intelligence Committee are demanding to see the raw data that purports to back up the NIEs—because of what a congressional source described to Rozen as “the debacle of October 2002.” The source was referring to an NIE from that month in which it was claimed that Iraq was sitting atop stockpiles of WMDs. “Up to that point, we took the documents from the intelligence community at face value,” Rozen quotes this person as saying. “There's no way to tell there's anything wrong with the October 2002 NIE until one reads the source documents. The key part to understand is that there's not enough evidence to support key judgments they had in there.”

Hopefully the source was not exaggerating when he told Rozen that the intelligence community and the administration would no longer “get the benefit of the doubt . . . . This committee is not walking into another debate without performing due diligence on these documents.”

Comfort Women Make Abe Uncomfortable

I wrote last fall about Japan's lavishly financed Washington lobbying campaign to block a congressional resolution that would urge Japan to accept responsibility for forcing women and girls from other Asian countries into sexual slavery during the World War II era. Now there's a new effort in Congress on the “Comfort Women” issue that looks to be gaining momentum.

There's a good (and not just because it cited my old story) roundup on new developments by Tom Zeller Jr. at the New York Times website. Zeller cited the recent congressional testimony of Koon Ja Kim, who said that in 1942, when she was 16, she and a group of other Korean girls were loaded on to a freight train and taken to occupied China. “The next evening, a Japanese officer came to the house [where she was held],” she said. “He spoke Japanese, which I did not understand. I did not know what he was saying or what he wanted until he raped me. When I refused and fought back, he punched me in the face and the blow split my eardrum. That was the first of many days and nights that I was raped. On a daily basis, I was raped by Japanese soldiers, and it was common to be raped by 20 different soldiers a day.”

Despite such testimony and a mountain of other evidence, Japanese officials continue to deny the abuses against the Comfort Women. And Prime Minister Shinzo Abe told the BBC that “Even if the [congressional] resolution passes, that doesn't mean we will apologize.”

By Ken Silverstein

This is This Week in Babylon by Ken Silverstein, published Friday, March 9, 2007. It is part of Washington Babylon, which is part of Harpers.org.

Convergent Interests: U.S. energy security and the "securing" of Nigerian democracy"

EXECUTIVE SUMMARY

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Nigeria and the United States: Convergent Interests

In its anxious search for energy security, the United States has embarked on a risky strategy to arm and train the militaries of oil-producing West African countries under the rationale of pursuing the Global War on Terror. Over the past 15 years, amidst widening crises in the Middle East and volatile petroleum markets, the U.S. has quietly institutionalized a West African-based oil supply strategy, closely focused on an “Oil Triangle” centered on the Gulf of Guinea. These policies are deeply flawed because they will serve to undermine America’s energy security even as they breed growing resentment and violence against U.S. economic and strategic interests.

In order to manage this policy, the U.S. Department of Defense just announced the establishment of an African military command—AFRICOM—to spearhead an “oil and terrorism” policy, which will oversee the deployment of U.S. forces in the area and supervise distribution of money, materiel and military training to regional militaries and proxies. Pentagon analysts and generals claim that vast “uncontrolled spaces” in Saharan and Sahelian Africa, which are said to include large portions of northern Nigeria, are rife with terrorists seeking to damage the United States, even though the evidence for such claims is woefully thin. Nevertheless, a $500 million “Trans-Sahara Counter Terrorism Initiative” (TSCTI), which will tie African militaries to American policies, is in the works. Given the internal security problems often found in resource rich countries, it is much more likely that the newly-acquired skills and equipment will be directed against domestic opponents than global terrorists.

The contradictions of this policy are evident in Nigeria, which currently provides 10-12 percent of U.S. oil imports and serves as the cornerstone of the strategy even as it demonstrates its deeply-flawed reasoning. Since the end of 2005, the on- and offshore oilfields of the Niger Delta––the major source of the country’s oil and gas––have essentially become ungovernable as a site of on-going and violent contestation between local ethnic groups, oil corporations and the Nigerian government. This violence results in repeated reductions and shutdowns of oil, sometimes exceeding 500,000 barrels per day. Moreover, reports the World Bank, some 80 percent of Nigeria’s oil monies flow to one percent of the population, while 75 percent of the country’s people live on roughly one dollar per day. In other words, the United States is relying on increased oil production from the African Oil Triangle to reduce its dependence on Middle East petroleum, but could replace one set of insecurities with another.

In fact, militarization by the United States will exacerbate an already tense situation in Nigeria and other parts of the Oil Triangle without having any effect on terrorists. Only a concerted effort to support Nigeria’s democratic forces and legislative oversight of the country’s presidency can ensure American and the region’s security, and quell wholesale theft of oil revenues as well as the insurgencies, criminality and social banditry now rampant in oil-producing areas.

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This is an executive summary of, Convergent Interests: U.S. Energy Security and the ‘Securing’ of Nigerian Democracy, by Paul M. Lubeck, Michael J. Watts and Ronnie D. Lipschutz, published in February 2007 by the Center for International Policy in Washington, DC. The full report can be found at: http://www.ciponline.org/NIGERIA_FINAL.pdf

Oil Inferno

January 3, 2007

By Michael Watts

Ryzard Kapucinski, the great Polish journalist, once wrote that 'oil is a fairy tale and like every fairy tale a bit of a lie'. The terrifying oil explosion that engulfed a Lagos neighborhood following Christmas Day--the current death toll is almost 300--says less about vandals who hot-tap the exposed pipelines running through the city's abject slum world than the venality, waste and corruption of a Nigerian petro-capitalism fuelled by windfall profits and modernity's addiction to the automobile. The horrific pictures of charred human carcasses being dragged from the burned-over wreckage of the Awori area of Abule Egba, a suburb of Lagos, is a bleak testimony to the total failure--the great lie--of secular national development in post-colonial Nigeria. The spectacle of an oil nation in which desperate poor city dwellers scramble to scoop petrol and kerosene from ruptured or tapped pipelines stands at the heart of the abject failure of many oil states, what Stanford political scientist Terry Karl calls 'the paradox of plenty'.

Nigeria produces over 2 million barrels of oil a day (currently valued at roughly $40 billion per year) which accounts for 90% of its export earnings and 80% of government revenue. Nigeria also supplies 9% of US imports and is the pillar in the US post 9/11 African oil strategy of the Bush administration which anticipates that the Gulf of Guinea will provide perhaps 25% of US imports by 2015. A multi-billion dollar oil industry is however a mixed blessing at best, and for most Nigerians nothing more than a fairy tail gone awfully wrong. To inventory the 'achievements' of Nigerian oil development is a salutary exercise: 85 percent of oil revenues accrue to 1 percent of the population; over three decades perhaps one quarter of $400 billion in oil; revenues have simply disappeared; between 1970 and 2000 in Nigeria, the number of people subsisting on less than one dollar a day grew from 36 percent to more than 70 percent, from 19 million to a staggering 90 million. According to the International Monetary Fund, oil 'did not seem to add to the standard of living' and 'could have contributed to a decline in the standard of living'. The anti-corruption chief Nuhu Ribadu (one of the few bright lights on a dark political landscape), claimed that in 2003 70% of the country's oil wealth was stolen or wasted; by 2005 it was 'only' 40%. Over the period 1965-2004, the per capital income fell from $250 to $212 while income distribution deteriorated markedly. Since 1990 GDP per capita and life expectancy have, according to World Bank estimates, both fallen. This isn't pretty.

What, then, is the real story behind the horrors of Abule Egba? Let's begin with the fact that in the days before the explosion, fuel was almost impossible to find in Lagos and other cities across the country. Massive lines at gas stations during the holiday period were in large measure the produce of a hugely inefficient and corrupt local refining industry that functions, if at all, well below capacity. The brutal reality of life in the Nigerian petro-state is that fuel for everyday use is one of the country's scarcest commodities.

What might strike the American reader as a bizarre, and potentially deadly, popular livelihood strategy, namely oil theft, exposes the rank underbelly of Nigerian development. The poor quality of oil pipeline infrastructure and their close proximity to human habitation has long been a matter of concern for Nigerian activities and communities in the oil producing and consuming regions. In fact the recent Lagos disaster is business as usual. In 2003 I visited the remains of a church in Okrika, in the heart of the oil-producing Niger delta region, which had been incinerated by a pipeline explosion during a Sunday-morning service. Overall, the picture is one of massive irresponsibility and complacency by the Nigerian National Petroleum Company (NNPC) which has responsibility for most of the pipeline infrastructure, and a dismal lack of leadership and political will from Abuja, the federal capital.

Since the late 1990s, there have been at least major ten explosions and at least 2000 deaths associated with punctured and vanadalized pipelines. In 1998 over 1000 persons died in Jesse; more than 300 were burned alive in Warri in 2000. There have been at least three huge fires in Lagos alone since late 2004, the most recent on May 12th 2006. Countless other smaller events rarely reach the pages of the Nigerian press. The announcement by President Obasanjo that he has only now approved the NNPC plan to re-lay 5000 kilometers of pipelines underground can only be met with amazement--and the deepest of cynicism.

There are at least two important facets of the Awori story. One is what it says of the vast Nigerian slum world of which Lagos is part. By some estimations Lagos has a population of seventeen millions. Mike Davis in his extraordinary new book Planet of the Slums reminds us that perhaps eighty to ninety per cent of the rapidly growing population of African cities--Lagos is forty times larger than it was in 1950--are barracked in slums, a Dickensian nightmare of squalor, poverty and disease. The slum world of Lagos defies description, in part because its operations remain a mystery. In Ajegunle, one of its vast swamp shanty towns, perhaps 1.5 million people inhabit eight square kilometers. In a recent New Yorker article, George Packer describe the city as a burning garbage heap, populated by armies of scavengers that are superfluous and ultimately disposable. It is no wonder that Governor Bola Tinubu of Lagos saw in the charred remains of Abule Egba, 'the shame of our nation'.

And what of the vandalization of the pipelines and the theft of oil? The women and children who gathered around the punctured pipeline were almost certainly bit players. The pipe had been tapped on Christmas Eve and by the early morning there were widespread reports of two fuel tankers being filled in the presence of local police. Oil theft--referred to locally as 'bunkering'--is a very large and well organized business in Nigeria. By some estimations perhaps 10-15% of Nigerian oil is stolen by so-called oil syndicates. The impoverished Lagosians who scoop fuel into jerry cans are low-level feeders in a vast ecosystem of crime that reaches to the very highest levels of government and military, and involves the complicity of the transnational oil majors. Across the Niger Delta oil fields well-connected military and government officials have made use of disenfranchised and unemployed youth groups to orchestrate the tapping of major pipelines and to run the oil barges through the tangle of creeks in the Delta to offshore loading stations--all under the watchful eye of the Nigerian navy and coast guard. At present prices, this oil mafia controls a black economy worth billions of dollars annually.

Yet the bunkering business has radically backfired. Angry youth groups, many from marginalized ethnic minorities across the Niger Delta largely excluded from the federal oil revenue allocation process, have gained control of important sections of the oil theft trade. Bunkering finances the purchase of large caches of weapons for what has become a series of armed insurgences across the oilfields. The movement for resource control and self-determination that sprang to life in the late 1980's in the non-violent movement of Ken Saro-Wiwa and the Ogoni people, by the late 1990s had morphed into a series of militias­ the Niger Delta Vigilante, The Niger Delta Peoples Volunteer Force--for whom the slick alliance of a corrupt oil state and unaccountable transnational oil companies became the object of an armed and increasingly violent struggle. Many of these insurgents began life as political thugs hired by oil-fuelled politicians in the elections of 1999 and 2003 but their insertion into the bunkering trade has granted them a political autonomy and a military capability to conduct a guerilla war in the swamps and creeks of the Niger Delta.

In late 2005 a hitherto unknown militia--the Movement for the Emancipation of the Niger Delta [MEND]--took a number of oil worker hostages and subsequently mounted massive attacks on oil infrastructures owned by Chevron, Agip, Shell and the Nigerian national oil company. By late 2006 MEND has grown increasingly more brazen to the point where some companies have commenced the evacuation of expatriate staff. The turbulence on the Nigerian oilfields date back to the 1990's and escalated dramatically at the time that President Obasanjo came to power in 1999. The national oil company estimates that between 1998 and 2003, there were four hundred vandalizations on company facilities each year. In seven years the insurgencies and conflicts have cost the government $6.8 billion in lost oil revenue.

The Niger Delta is now almost ungovernable. In a 2005 report, Amnesty International concluded that the Nigerian security forces still operate with impunity. The government, they claim, has failed to protect communities in oil producing areas while providing security to the oil industry. The terrible conditions across the delta are compounded by the policies of the transnational oil companies who have finally acknowledged that their practices of community development and 'cash payments' have made the situation worse. In June 2004, the leak of an internally commissioned Shell Nigeria report revealed the company's direct contribution to corrupt practices and inter-community violence which has eroded what they call their 'license to operate.'

In the ashes of the Lagos inferno lies a much darker story of state corruption, corporate power and a growing oil insurgency, all framed by the existence of endemic poverty amidst oil wealth. As Nigeria prepares for the elections of April 2007, the grave danger is that buoyant oil prices will fund a huge electoral war chest for politicians only too willing to deploy restive youth and angry insurgents for their own political purposes.

In the background stands the US military. According to General James Jones, in testimony offered to the Senate Armed Services Committee in 2005, the new objective in Africa "should be to eliminate ungoverned areas, to counter extremism, and to end conflict and reduce the chronic instability" because of Africa's "potential to become the next front in the Global War on Terrorism." At a May 2006 African Seapower Conference in Abuja. Admiral Harry Ulrich, EUCOM's Commander of US Naval Forces Europe and Africa in referring to Shell's Bonga oil field --Nigeria's largest oil field, costing $3.6 billion to develop and lying within Nigeria's territorial waters--admitted that American ships were patrolling Nigerian oil fields within the 200 mile limit: "We are concerned for Nigeria and we want to help her protect the region from the hands of the maritime criminal..the US and any good nation want a safe coast for countries who are supplying their energy and that is why we are often there. So there is nothing to fear for Nigeria". Against a backdrop of spiraling militancy across the Delta, US interests have met up with European strategic concerns in the region and have established the Gulf of Guinea Energy Security Strategy.

By December, 2005 the American ambassador and the Managing Director of Nigerian National Petroleum Corporation agreed to establish four special committees to co-ordinate action against trafficking in small arms in the Niger Delta, bolster maritime and coastal security in the region, promote community development and poverty reduction, and combat money laundering and other financial crimes. The oil majors facing shut in of up to 500,000 barrels per day are inevitably concerned. A senior maritime analyst at the U.S. Office of Naval Research, revealed to participants at March 2006 conference at Fort Lauderdale "Shell led a group of oil companies in an approach to the US military for protection of their facilities in the Delta," and warned that "Nigeria may have lost the ability to control the situation." It is a perfect storm of oil-lubricated conflict. An oil inferno of another sort.


Interested readers might want to look at a new International Policy Report (2007) published by the Centre for International Policy in Washington DC by Paul Lubeck, Ronnie Lipschitz and myself which discusses the militarization of the Gulf of Guinea. The report is entitled "Convergent Interests: US Energy Security and the "Securing" of Nigerian Democracy" .


Michael Watts is Director of Centre for African Studies, University of California, Berkeley