Sunday, October 24, 2004

'How I Paid Out Money to Etete and Others'

'How I Paid Out Money to Etete and Others'
In this court proceedings, Jeffrey Tessler, the consultant at the centre of the $180 million bribe scandal involving Halliburton and the NLNG contracts reveals how he pays out money to several Nigerian public officials and politicians in what has become a glaring evidence of monumental corruption. Excerpts:

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Did not the awarding of these concessions granted to MALABU depend on Chief Etete as Petroleum Minister?

I don't know but I think he was involved. Judging by the time he took, he certainly wasn't the only one. Actually when negotiations started, Chief Etete indicated that these concession would be awarded fairly quickly, and I had absolutely no idea things were going to drag on until 1998. There was also a rather strange clause that we should have talked about last time, saying that the bonus payable to the Government would be $20 million.

What's the situation now?

I believe that in 1999 the concession of block 214 was cancelled, and subsequently awarded to a consortium including EXXON MOBIL, CONOCO-PHILIPS and I think AGIP.

Concerning block 245, its award to MALABU was reconfirmed by the new Government (led by Mr Abubakar) in 1999. In 2001, MALABU was again confirmed by Mr Obasanjo as the owner of parcel 245. Later the Government changed its mind and cancelled the concession made in favour of MALABU. Since that time there has been an arbitration process involving the new Government and SHELL which is the new holder of the parcel.

Chief Etete asked me if I could act on behalf of MALABU in proceedings against the Federal Government and perhaps against SHELL. I refused. It is a rule of mine never to be involved in proceedings against the current Government.

Are you not personally involved in these proceedings owing to the fact that you bought 5 per cent of the shares and are in fact in possession of 40 per cent of the shares in MALABU?

It's a rule of mine, I don't want to be involved in litigation against the current government which might turn into litigation of a political type, and in any case my role as a consultant for TSKJ is more important to me than the investment in MALABU. It would hardly be appropriate for me as a consultant to TSKJ to be involved in litigation of a 'political' nature. Between 1999 and 2001 it appeared that Chief ETETE was the owner of the whole of MALABU. I had nothing to do with his acquisition of shares from the shareholders who had them. I believe that by 2001, perhaps a year or two earlier, he himself claimed to be the owner of MALABU. This information came from the press.

The Judge: Let us return to the bank accounts used by Mr Etete. Apart from the PAPA account opened in the name of Buzaki Etete, which was credited with $296,542 in the first quarter of 1996, two other accounts opened in the name of Dan Etete were credited with the following payments from the TRISTAR UBP account:


$482,795 between July 1996 and February 1997 (Credit Suisse account no. 2300095 in the name of Omoni Amafegha (D319)


$500,000 on 10 February 1998 (Banque HOFFMAN account no. 12423 in the name of Omoni Amafegha under the code name PAPA (D320).

Do you contest any of these payments?

No. My reply is the same as before.

That represents nearly half of the $2.5 million. Did you pay any other sums into other accounts in favour of Mr Amafegha account number (D 311/15)?

I thought I was paying these sums into Mr Amafegha's account, and that was confirmed when I learned later that Amafegha was listed as a shareholder of MALABU. As I said, and I have tried to be as clear as possible, my belief was that Mr Amafegha was not the same person as Etete, I paid the money into Amafegha's account but the account details were supplied to me by Etete.

Mr. Etete stated on 24/04/2003 (Page D 260) that the MALABU company, of which he was the legal representative, had owned block 245 since 1997 or 1998, in other words since a time when he had been Petroleum Minister. Is that the block which you acquired?

MALABU had owned two parcels, block 214 and block 245, I think since their concession in mid-1998. The register of shareholders presented to me showed that Mr Amafegha held 30 per cent of MALABU and in fact 70 per cent was held by Alu Mohammed whom I knew personally.

Alu Mohammed is a relation of another of my clients, Wakili Adamu. Alu Mohammed was chairman of Bulkship Nigeria limited and chairman of the Nigerian Shippers' Alliance. He was an independent, apolitical businessman. Mr Wakili Adamu had for a while been chairman of the Chamber of Commerce.

Towards the end of 1998 there was a reorganization of the shareholders but I still think that Alu Mohammed was the majority shareholder at the end of 1998. In 1999 MALABU lost parcel 214 but retained parcel 245, as was reconfirmed in 2001. The discussions I had with Chief Etete concerned the purchase of part of Amafegha's 30 per cent holding in MALABU. These shares thus included rights over parcels 214 and 245.

During the discussions I had with Chief Etete in 1995, 1996 and 1997 I was unaware of MALABU as an entity. The object of the discussions was the acquisition of rights and titles to these parcels. I didn't know how many parcels would be allocated, I thought there would be at least one but I didn't know there would be two. So far as I can remember I paid $2.5 million during 1996 and 1997, but perhaps I didn't pay the whole of this sum.

In return, I received documents transferring 40 per cent of the MALABU shares to me.

Today I also hold transfer certificates relinquishing MALABU's share of the parcels then known as 214 and 245.

Are they blank transfer certificates?

No, they're made out by MALABU to the order of EXXON MOBIL. MALABU sold 40 per cent of its shares to EXXON MOBIL in September or October 1998. I have retained these original documents to protect my investment.

Why are the shares made out to EXXON MOBIL when the payments were made by TRISTAR?

Only a big company like EXXON MOBIL could develop the project, To the best of my memory, I think I agreed to pay $2.5 million but it's possible I haven't paid the lot.

Are we really to believe that you can't remember whether you've paid half the sum or all of it?

The figure in my mind is 2.5 million.

Have you checked since last time?

I can't verify it in a real or effective way. I don't know who the beneficiaries are. It is possible that that's all I paid.

Can you verify before the next session the exact amount you paid into the accounts whose details were supplied to you by Mr Etete?

I will do my best.

The TRISTAR account was credited in the first instance, between 27/12/1995 and 1/03/2000, with $59,960,000 in a series of payments from LNG Servicos carrying the reference numbers 5 to 52 (the first few payments having no reference numbers). This total corresponds to the one specified in the first TRTSTAR contract signed on 20/03/1995. Is that correct?

I think there were sixty payments which represent a total of sixty million dollars for tranches 1 and 2. Some payments, I think, credited accounts at UBP Geneva and HSBC Monaco.

The second contract was signed on 18 March 1999. A whole series of payments was made between 30 March 1999 and 30 June 2000 into the UBP Geneva account carrying references that start at 101 (101 to 117). Do these payments which represent over $15 million correspond to the second contract?

That ought to be the case.

The Judge: If we look at payments 101 to 114 and compare them with the amounts debited to Mr Stanley's AMAL, we can see that the percentage stays constant at 3.0769 per cent. How did you decide on that percentage?

I didn't pay 3 per cent, I believe I paid $380,000.

The Judge: I will rephrase my question. How do you explain the fact that on twelve occasions the amounts retroceded to Mr Stanley are equivalent to 3.0769 per cent of the payments received from LNG Servicos in execution of the second contract signed on 18 March 1999?

I don't know why that percentage. I settled on the basis of a systematic percentage. If you multiply 3.0769 by 32.5 you don't get the amount that I paid. That wasn't what I paid.

Did these payments continue to be made?

No, they stopped in 2000, I believe.

Why?

There was no reason to continue them. In the matter of the acquisition of shares I dealt solely with him, in the matter of the parcel itself I had dealings with a large number of people.

You never had any dealings with the vendor?

Not directly. The conditions negotiated for these rights and shares were either negotiated by or suggested by Chief Etete alone.

Why?

Because I expected him both to recommend a vendor to me and to recommend me to the vendor.

In what capacity did you approach him?

A lot of people were approaching the Minister at that time to be allocated parcels, something that would normally have come under his Ministry's jurisdiction. I couldn't buy a whole parcel but I wanted to own an interest, albeit a minority one, in a company that might get a parcel allocated to it, because at that time there were a lot of parcels going to be allocated. They were deep-sea offshore concessions likely to become viable.

Did it seem normal to you for the Petroleum Minister in person to give the details of a corrupt Swiss numbered account into which you yourself were to make payments in the context of this transaction?

He didn't make it clear during the initial talks. It was after the discussions and negotiations, which went on for months and during which we met in London, that he gave me the details of that account. I think he gave them to me in London. We also had telephone conversations because we used to talk about a lot of things including fraud, which I was investigating for him.

He told me that the account in the name of Mr Amafegha was the one into which I was to pay funds in intermittent fashion, but later the accounts changed. In the first place he must have given me the details of the account you mention, and in the course of later discussions he gave me the details of other accounts, still in the name of Mr Amafegha.

When I asked you who had given you this account number, you replied: 'if it's the person I'm thinking of but can't remember, it should be Mr Amafegha'. Why do you now say that it was Chief Etete who gave you the account number?

I've never met Mr Amafegha and I thought I was paying these funds to Mr Amafegha. I will try to be perfectly categorical. I always believed that I was paying funds into Mr Amafegha's account. I believed Mr Amefegha to be a real and very distinct individual. Chief Etete informed me that Mr Amafegha wasn't him. The details of Mr Amefegha's account were communicated to me by Chief Etete. The negotiations and discussions that I had concerning the parcels were always, from the start, with Chief Etete.

Why didn't you declare in the previous session that it was Chief Etete who had given you that account number?

Because at the beginning of the discussion you indicated that there would be another meeting.

The Judge: According to Mr Gory all he knew about TRISTAR and about yourself was what he had been told by Mr Chodan whom we now know to have been being paid by you.

Mr Tesler: I would be surprised if Mr Gory were content to base his opinion on what Mr Chodan might have said to him about the effectiveness of my work and the services provided by TRISTAR since 1994 and between 1995 and 2003. The services provided by TRISTAR after 1995 were, I am sure, well known to all partners in the joint venture, including in particular the opening in 2003 of (trains) 1, 2, 3, 4 and 5.

The Judge: Exactly. Mr Gory has clearly explained that the key individual, who represented both KELLOGG and LNG Servicos and managed the interface between TRISTAR and the partners in the joint venture, was Mr Chodan and no one else.

I can't speak for Mr GORY but I should have thought the successful opening of (trains] 1 to 5 would have been the key factor. I believe that TSKJ didn't just bring me in as a consultant, there were other people, Mr B. PATEL was present at the meetings with TECHNIP and other shareholders, so it's difficult for me to believe that Mr Chodan was the only conduit leading to my nomination and giving details of my work.

Did you inform other people at KELLOGG, and the other partners, of the fact that you had been paying Mr Chodan through a Jersey account?

No, I didn't do that.

Why?

I believe that's Mr Chodan's business.

You paid Mr Chodan without the knowledge of LNG Servic,os and its associates?

It's absolutely correct that I didn't inform LNG Servicos.

For what services did you pay Mr. Chodan?

Mr. Chodan introduced me to more than twenty possible sub-contractors able and perhaps willing to work on the main project and, as was mentioned earlier, I worked with potential and actual sub-contractors on this project for my own greater good. It's been a nice little earner.

When we look at the TRISTAR account chronologically (D 305/1) we note that very often the payments made into the account originating from LNG Servicos are followed by regular payments to Mr Chodan. These payments are not isolated. Very often, a sum equivalent to twice the payment to Mr Chodan is paid into the AMAL account. Who is the beneficiary of the AMAL account?

I don't know exactly, I think something like the FIDES TRUST.

I didn't ask for the name of a financial establishment or accountant, I asked for the name of the actual beneficiary.

I don't know.

You don't know the name of someone you're paying twice as much as Mr. Chodan?

I don't know. I believe that the final recipient of the FIDES TRUST account is Mr A.J. Stanley. I hesitated to mention it, I wasn't inclined to disclose it before because of his links with KELLOGGS. Mr. Stanley is a senior executive of KELLOGGS. I had negotiated currency exchange agreements with him between dollars and Nairas. I've known Mr Stanley since 1994 - 1995. I think I met him in London around 1994 or 1995 to discuss the LNG programme. He was introduced to me by Mr. Burerll and Mr. Chodan. Mr BURREL is a member of KELLOGG. He had a job similar to Mr. Chodan's. I think Mr. Burrel is of higher rank than Mr Chodan. I've known Mr Burrel since the time of NAFCON in 1992-1993. He was already there with the title of Africa director, executive vice-president Middle East and Africa.

Mr Chodan would have been responsible for a sector in the same area as Mr Burrel but on a lower level. I've known Mr Burrel longer than Mr Chodan. Mr Stanley is above both of them. He's chairman of KELLOGG. I believe that all the company bosses went to Nigeria once a year to meet General Abacha. The purpose of these meetings was to discuss the project's stage of advancement and the future. I believe they perhaps went twice and saw General Abacha twice. I think on one occasion they had a meeting with Abacha and he didn't turn up, which caused me a lot of trouble.

How did you go about arranging these meetings with General Abacha?

It was never me who organized the meetings, not myself. I used to talk to the Chief of 'Staff, I believe at the time it was Mr Abdullahi Mohammed. At first, in 1995 and then in 1996, I managed to organize one of the meetings through Mr D. Yussufu.

Was that the same Mr Yussufu to whom you gave $75,000 in two payments made on 25/02/1997 and 11/08/1998 which we mentioned yesterday?

Yes, it's the same man.

What were the links between Mr Yussufu and General Abacha?

Mr. Yussufu had known General Abacha very well since the time when he occupied a senior post in the police, something we were talking about yesterday. He told me he knew him personally. Mr Yussufu told us the best way to obtain an audience by saying that the consortium ought to write to the Presidency and the President's office offering to come and see him to talk about the project's state of advancement and all related matters. I thought I understood what happened. Someone in the joint venture wrote to the presidency and the president's office answered giving a date for the meeting. I'm sure Mr D. Yussufu followed the exchange of letters and made sure the correspondence stayed on the rails. Visits of this sort continued from 1995 to 2003 and the team asked to see the President every three years more or less.

So far as the present head of state is concerned, I think they saw him in 2002 and these meetings have always been obtained in the same way. I would talk to someone important, I'd ask if it was possible for someone from the joint venture to meet the head of state, the protocol stayed the same with different people according to the administration in place.

In 2002 for example, I asked the Chief Executive of the NNPC to set up a meeting between the bosses of the joint venture and the head of state. The meeting took place in 2002. We talked to him about [trains] 4 and 5 and the, plan for (train) 6. I believe there were two meetings in President Abacha's time and one meeting with his successor Abdulsalami Abubakar and one with President Obasanjo. I seem to remember organizing another meeting with Abubakar in New York when he was passing through New York and I organized that meeting through the Nigerian Ambassador to the US. That must have happened between June 1998 and June 1999 when all the heads of state were at the UN.

It was certainly afterwards. The deputy MD of each of the two firms was also present. There was Mr Krammer, it's possible Mr Krammer came to the meeting with Mr Abubakar, I used to have the photocopies of passports people needed to attend those meetings. Two or three of the companies would be represented each time, as no one really trusted anyone else's account of the facts. I think that when Mr Krammer had high-level responsibility for this project at TECHNIP he used to come to these meetings himself, but I'm not sure he went to the meeting with Mr Obasanjo

Did you live in Nigeria?

No.

Have you been to Nigeria?

Just once, in 1983 or 1985. But I've worked with Nigeria permanently since 1977, in fact on a daily basis. At the time by telex, by telephone and Nigerians would come to see me in London on a regular basis. I've given advice to Nigerians on all levels. They came to London regularly, it's a former colony. Hardly a day passes without my seeing one. London's their second home.

In 1956, at MARUBENI. I had dealings with Mr MATSUDA, Mr Endo and Mr Tida.

Why did you pay Mr MATSUDA $1,190,000 in payments made between 1996 and 2000?

He was a sub-consultant, he was my consultant on LNG. He worked for me.

Why did you on 9/10/1996 immediately repay to Mr MATSUDA $404,000 of the $424,000 you had received on 4/10/1996 from the company that was none other than his employer?

There's absolutely no connection.

Weren't you helping Mr Matsuda to embezzle $400,000 from the MARUBENI company?

No, the two are unconnected.

Just a fluke?

To the best of my knowledge, I don't see any link between the two things.

When Mr. Matsuda got the $404,000 he didn't know his company had just paid you $424,000? What were the other regular payments to Mr. MATSUDA for?

Mr. Matsuda used to go to Nigeria. He used to provide me with intelligence, information on Nigeria and more particularly on the gas and oil sector in Nigeria. He used to send me stuff every day, press articles, on the situation in Nigeria, that lasted four years.

We had agreed on a figure that I would pay over the duration of the contract. The $404,000 were part of the total. I paid an agreed amount, I think it was around a million dollars spread over four years, and I paid in proportion with my revenues.






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