NIGER DELTA: CORRUPTION PERMEATES ALL

C O N F I D E N T I A L SECTION 01 OF 02 LAGOS 000093

SIPDIS

SIPDIS

STATE FOR AF/W, INR/AA, DS/IP/AF, DS/ICI/PII, DS/DSS/OSAC
OSLO FOR HELENA SCHRADER
DOE FOR GPERSON
TREASURY FOR ASEVERENS, SRENENDER, DFIELDS
COMMERCE FOR KBURRESS
STATE PASS USTR FOR ASST USTR FLISER
STATE PASS TRANSPORTATION FOR MARAD
STATE PASS OPIC FOR ZHAN AND MSTUCKART
STATE PASS TDA FOR NCABOT
STATE PASS EXIM FOR JRICHTER
STATE PASS USAID FOR GWEYNAND AND SLAWAETZ

E.O. 12958: DECL: 02/28/2018
TAGS: PGOV PREL SENV NI
SUBJECT: NIGER DELTA: CORRUPTION PERMEATES ALL

REF: LAGOS 57

Classified By: Consul General Donna Blair for reasons 1.4 (B) and (D)


1. (C) Summary: Sheriff Mulade, President of the Gbaramatu
Youth Council (GYC) and assistant consultant to the Delta
State Oil Producing Areas Development Commission (DESOPADEC)
told us in February that DESOPADEC pays off House of Assembly
members to ensure they will pass future DESOPADEC budgets,
and pays militant leaders to ensure their projects do not get
attacked. According to an auditor for Chevron, international
oil company (IOC)-sponsored development bodies pocket
development funds and profits for themselves. Corruption is
so prevalent in the Niger Delta it must be used if
development bodies hope to fulfill their mandates. Despite
well-meaning global memorandum of understanding (GMOU)
efforts by IOCs, these have proven largely unsuccessful at
developing communities. End Summary.

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DESOPADEC: Play the Game to Stay in the Game
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2. (C) Mulade told Poloff on February 26 that DESOPADEC has
received very little money since its inception in early 2007.
Mulade speculated DESOPADEC would be funded once the Delta
State House of Assembly approves the 2008 budget.


3. (C) Mulade intimated that DESOPADEC Chairman Chief
Wellington Okirika gave approximately 15-20 percent of the
organization's earlier funds to Assembly members' cronies
(anyone bearing the Assemblyman's letterhead). This, he
argued, was necessary to ensure Assembly Members continued to
support DESOPADEC in the state's annual budget. Of the
remaining 80 percent given to DESOPADEC, approximately 30
would go towards "public relations" costs, which he inferred
meant to commissioners, DESOPADEC consultants, and to
"security" costs (payments to appease militants) to ensure
projects progressed unharmed. Therefore, only 50 percent of
DESOPADEC's allocation could be spent on community
development projects, he intimated. Mulade commented one
must buy into this cyclical form of corruption to achieve
even limited progress. Mulade also posited this type of
corruption protects Assembly members from impeachment because
they have compromised Okirika's reputation and he, therefore,
would not dare expose them.


4. (C) Despite its current lack of funding, DESOPADEC appears
to have been accepted by riverine inhabitants as responsible
for developing the Niger Delta, Mulade commented. Community
members are taking their grievances to DESOPADEC and, for
now, understand the commission is significantly under funded.


5. (C) Tom Polo remains the most powerful militant in Delta
State and much of the Niger Delta; as such he receives funds
directly from the federal and state government to ensure
peace, Mulade said, but he could not say which federal
ministry or office was directly responsible. Mulade said
there exists a "negative peace" because the region appears
calm on the inter-ethnic front but there are many militant
Ijaw factions tired of Tom Polo's dominance (Mulade
specifically mentioned "Henry"--not Henry Okah--and Victor
Ebikabowei). These individuals live in Bayelsa State and are
known to be stockpiling weapons against Tom Polo, he
commented. Mulade said Tom Polo is able to keep these
potential competitors quiet by giving them a small portion of
government payments. (Comment: Ironically, Tom Polo appears
to spend Delta State oil revenue to assert dominance over
militants in Bayelsa. End Comment.)

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LAGOS 00000093 002 OF 002


Auditor: GMOUs Less Successful Than Billed
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6. (C) An auditor hired by Chevron told Poloff in
mid-February the company's Global Memoranda of Understanding
(GMOUs) and Regional Development Councils (RDCs) (Reftel)
have proven much less successful than intended. Corruption
and social misunderstandings (over rights versus privileges),
he said, are largely responsible for the lack of success.
While RDCs look great on paper, they are poorly managed and
community board members use Chevron funds for personal rather
than community gain.


7. (C) For example, our contact said that while a community
may accept a number of bids to build a road, the winning
contractor is likely to have familial ties to the local RDC
Chairman; the Itsekiri are reportedly very successful at this
technique. Our contact said these projects are not always
finished and are often padded to ensure everyone gets their
"share." Similarly, many RDCs have created microfinance
institutions, he reported, but profits are pocketed rather
than reinvested to broaden an institution's lending capacity.
Further, community borrowers rarely pay back loans because
they believe they are entitled to the funds. He was surprised
that the RDCs tried to so little to hide corruption from the
auditors.


8. (C)However, communities appear happy with the status quo
because they see activity occurring. While Chevron
discontinued direct development efforts (building schools,
bridges, roads, etc.) in favor of GMOUs, it is still
completing previously approved projects. Once Chevron
finishes direct development efforts, communities will see how
little they are benefiting from RDCs, our contact predicted,
and may again hold Chevron responsible. (Note: Senior Chevron
operational managers credit the GMOU and RDC process for the
relative calm they enjoy in their oilfield near Escravos. End
Note.)


9. (C) Our contact said the GMOUs are, in theory, wonderfully
designed to teach RDCs and communities to identify and lobby
for their needs. The GMOU concept was so well regarded that
Shell has adopted a very similar approach, but one entailing
even less oversight and training (Chevron brought U.S.
professors to the Niger Delta to teach RDC members how to
approach development, evaluate bids, etc.) and, our contact
predicted, would prove unsuccessful.

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Comment
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10. (C) Our contacts' description of corruption permeating
all levels of business and development has been echoed often
by others. Intrinsic corruption hurdles will significantly
challenge government efforts to institute due process,
government accountability and transparency efforts. It is
hard to imagine how individuals in government, development
bodies and other institutions will be able to operate
transparently in a society where corruption and "favors" has
become the norm. End Comment.


11. (U) This cable was cleared by Embassy Abuja.
BLAIR