Identifier | Created | Classification | Origin |
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08ABUJA578 | 2008-03-31 16:24:00 | CONFIDENTIAL | Embassy Abuja |
VZCZCXRO9270 OO RUEHPA DE RUEHUJA #0578/01 0911624 ZNY CCCCC ZZH O 311624Z MAR 08 FM AMEMBASSY ABUJA TO RUEHC/SECSTATE WASHDC IMMEDIATE 2447 INFO RUEHZK/ECOWAS COLLECTIVE IMMEDIATE RHEHNSC/NSC WASHINGTON DC IMMEDIATE RHEBAAA/DEPT OF ENERGY WASHDC IMMEDIATE RUEAIIA/CIA WASHINGTON DC IMMEDIATE RUEKJCS/DIA WASHINGTON DC IMMEDIATE RHMFISS/HQ USEUCOM VAIHINGEN GE IMMEDIATE RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK IMMEDIATE RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE |
C O N F I D E N T I A L SECTION 01 OF 03 ABUJA 000578 |
1. (C) SUMMARY. Senators Shelby, Gregg and Corker met with Acting Economic and Financial Crimes Commission (EFCC) Executive Chairman Ibrahim Lamorde on March 17 in Abuja. Ambassador, EconCouns and INLOff also attended. The meeting focused on the activities of the EFCC regarding corruption, money laundering and terrorist financing. The meeting also addressed banking sector reform and the problem of oil bunkering in the Niger Delta. Lamorde explained that the EFCC has evolved its focus from money laundering and financial fraud cases, such as "419" e-mail scams, to handling all financial crimes including the prosecution of high-ranking government officials for corruption. He opined that no matter what resources are devoted to alleviating poverty, those resources will continue to be squandered until corruption is addressed. Lamorde assured the Senators the EFCC is independent, reporting only to the National Assembly and the Office of the President. He also noted that the EFCC can prosecute cases internally without reporting to the Attorney General. END SUMMARY. 2. (C) Senators Richard Shelby, Judd Gregg and Bob Corker, accompanied by Ambassador, EconCouns, staffers and INLOff (notetaker) met with Acting EFCC Chairman Lamorde at EFCC headquarters in Abuja on March 17. Lamorde introduced Chief of Staff Dapo Olorunyomi, Head of External Relations and Fund Raising Mr. Mohammed Bamalli, Head of Operations in Abuja Mr. Bala Ciroma, Assistant Team Leader for the Terrorism Finance Unit for the Nigerian Financial Intelligence Unit (NFIU) Mrs. Biola and First Special Assistant to the Acting Chairman Mr. Musa Bello. Senator Shelby indicated that the CODEL was primarily interested in money laundering and terrorism financing, as well as the challenges that the EFCC faces. Lamorde proceeded to describe the EFCC's history and activities. 3. (C) Lamorde said he has been with the EFCC since its inception in 2003. Since that time the EFCC has evolved its focus from money laundering (M/L) related to illicit drug proceeds and financial fraud cases, such as "419" e-mail scams, to handling all financial crimes including the prosecution of high-ranking government officials for corruption. In fact, Lamorde noted that the need for creating the EFCC and expanding its mandate became clear when the Financial Action Task Force (FATF) placed Nigeria on its warning list of countries with deficient monitoring of financial institutions. The image of the Nigerian banking sector was tainted. Most banks at the time were sole proprietorships with insufficient capitalization and inadequate oversight. Lack of oversight led to the collapse of several banks, problems with fraud and money laundering, and loss of confidence in the banking sector. To rehabilitate the image of its financial institutions, the GON reduced the number of banks from 100 to just 24 at present, required larger capital reserves, increased deposit insurance requirements and established new rules on bank ownership. In addition, the GON amended its 1995 Money Laundering Law and passed the Money Laundering (Prohibition) Act of 2004 to include all financial crimes such as public corruption, drugs and 419 scams. 4. (C) According to Lamorde, there was a need to establish the NFIU not only to track M/L in the banking sector but also terrorism financing (T/F), particularly after the events of 9/11. Since its creation under the EFCC Establishment Act of 2004, the NFIU has worked aggressively to successfully remove Nigeria from the FATF list of non-cooperative countries. The NFIU subsequently became a member of the prestigious Egmont Group and now shares and receives intelligence information from other member FIUs. Because of the NFIU's actions, banks are now subject to monitoring of their activities and to reporting requirements through Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs). This type of monitoring has revealed several cases of corruption. For instance, through monitoring STRs, an Inspector General of Police, who was found to be extremely corrupt, was prosecuted, convicted and his assets seized and forfeited. Other public officials such as senators, governors and civil servants have also been detected and successfully prosecuted. Regarding T/F, Lamorde indicated that the EFCC is building a database of all charities which will allow them to monitor ABUJA 00000578 002 OF 003 membership and finances to determine the source of funding. He acknowledged that monitoring the finances of charities is difficult as most funds come in the form of undeclared donations. However, he commented that the best indication of suspicious activity is the outward display of wealth by the charity that has not been reported and that the EFCC will generally investigate such cases. 5. (C) Senator Shelby asked about illegal activities in the Niger Delta and the issue of poverty and the distribution of wealth. Lamorde explained that the Niger Delta is a resource rich region of Nigeria which faces a serious problem with oil bunkering, with a nexus to arms trafficking, which he described as criminal in nature and not related to any political or social issues as often claimed. He added that no matter what resources are devoted to alleviating poverty, those resources will continue to be squandered until corruption is addressed. He also noted the prevalence of kidnapping and extortion which he attributed to petty criminal gangs that operate in the area. 7. (C) Senator Shelby asked about the oversight and monitoring of the banking sector. He posited that if banks developed a better understanding of their customers' needs and focused on strengthening the relationship with their clients, they could more effectively monitor illegal transactions. Lamorde responded that banks in Nigeria are fairly large and attempt to serve a broad and diverse clientele. Due to the volume and complexity of financial transactions, banks must be alert to illegal activities and are required to submit STRs and CTRs as they are in the best position to monitor their clients' transactions, particularly in cases of public corruption where deposited funds exceed the official's declared assets and sources of income under public disclosure laws. 8. (C) Senator Shelby also asked for the EFCC's insights into the movement of cash by couriers and the difficulty of monitoring transfers over borders. Lamorde acknowledged that Nigeria has large borders such as the border with Cameroon that are not well monitored. However, he noted that there have been large seizures of cash at official border posts. The perpetrators are generally wealthy Lebanese or South Asians who convert Nigerian currency into US dollars for the purpose of depositing the funds in Dubai where banking regulations are lax. Senator Shelby asked whether such persons are being monitored. Lamorde stated that a significant number of 419 e-mail scams are conducted by Lebanese and that it is very difficult to monitor their finances as they immediately transfer funds to other Lebanese accounts around the world. 9. (C) Senator Gregg inquired whether the EFCC is independent, who it reports to, and whether it has powers of arrest and prosecution. Lamorde said the EFCC reports to the National Assembly in its oversight capacity and the Office of the President. He emphasized that EFCC has an internal prosecution unit and does not have to report to the Attorney General. 10. (C) Senator Corker asked about illegal oil bunkering. Lamorde responded that pilfering is high and that pipelines are routinely sabotaged. The oil is then sold on the black market, in some cases to countries with refinery capacity but no oil resources. For instance, refineries in Cote d'Ivoire and Cameroon have routinely purchased bunkered Nigerian oil. The origins of the oil were identifiable from its physical characteristics. When the GON discovered these instances of illegal bunkering, it made arrangements to sell legal crude oil to these refineries in order to discourage continued trade in illegal oil. Senator Corker asked what the difference in price was at the time. Lamorde stated that it depended on the prevailing market price but that the impurity of the bunkered oil appreciably raised refining costs. However, he cited examples of specific instances, where bunkered oil sold at discounts of 20-30 percent. Lamorde added that the EFCC had reduced its presence in the Delta as violence increased and the military had to be called in. 11. (SBU) Senator Shelby thanked Lamorde for the discussion and invited him to visit the Senate next time he is in the US. ABUJA 00000578 003 OF 003 12. (U) CODEL did not have an opportunity to clear this message prior to its departure. SANDERS |