23 Aug 2000

stacybrooks@lisatrust.net

TELL Magazine, No. 34, August 21, 2000

(TELL is the Nigerian equivalent of Time Magazine in USA.)

OPERATION FOOL THE NATION: The John Fashanu report on alleged $6 billion debt buy-back scam may be a mirage after all.

By OSA Director
with additional reporting by Ademola Oyinlola/Washington DC and Janet
Mba-Afolabi

Idris Abubakar, a senator representing Gombe South Constituency, is fast acquiring the image of a fighter. When the Senate Committee on Local and Foreign Debts, chaired by Abubakar, gave a clean bill of health to Nigeria's debt buy-back operation in the period of 1988 to 1993, many were wont to believe. However, John Fashanu, a Nigerian-born United Kingdom-based former international soccer star, dismissed the report as a cover-up. Indeed, Fashanu accused the Senate committee of bias and laziness for not getting to the root of the transactions which he described as an embarrassing scam.

According to Fashanu, the Abubakar-led Senate committee, which described the debt buy-back deals as transparent, may have been misled to such conclusions because "the Senate committee never reviewed the report (Fashanu's report) that was submitted to the Nigerian government." Incriminating documents, he claimed, were withheld from them (Senate committee). "It took over a year for the forensic accountants and financial investigators to piece together the maze of transaction which uncovered the looted funds; and now, that information is being closely guarded or withheld from the proper officials by the very individuals that want to cover up their own crimes, mainly the Central Bank of Nigeria, CBN, officials in charge of debt buy-back scheme from 1988 to 1993," said Fashanu, who expressed his determination to pursue the matter further.

With such vehement rebuttal, Fashanu was only treading a familiar turf. In a well-orchestrated media blitz, Fashanu, in April, announced to the world that a three-year private investigation undertaken by him had unearthed a monumental scam of about $6 billion in the debt buy-back transactions done between 1988 and 1993. This was during the tenure of General Ibrahim Babangida, the famed 'Evil Genius' whose eight years of military dictatorship culminated in the annulment of June 12, 1993 Presidential election. The winner of that election, Moshood Abiola, later died in custody in 1998. Hence, with Babangida's unenviable and corrupt leadership background, many Nigerians who have been calling for a probe of the gap-toothed general latched on the "Fashanu report" to pressure President Olusegun Obasanjo for an intensive probe of Babangida's era, described as the period when corruption and graft became entrenched as statecraft.

But TELL learnt that Fashanu is an unlikely character to champion such a crusade with emerging facts regarding his motives and sincerity. Fashanu claimed he stumbled on the fraud by chance in his bid to run checks on some potential business partners in Nigeria. He told The NEWS magazine recently that, in the course of running the checks, "a lot of information began to come out, it got bigger and bigger until we were looking at a fraud of at least $6 billion, involving 200 separate bank accounts." The patriotic zeal to give Nigeria a better image in the global community, Fashanu claimed, propelled him to finance and hire some investigators to expose the shady deals in the debt buy-back scheme.

The former English soccer star even boasted: "I have details of account numbers, identities of those involved, dates and times these frauds were perpetrated." But such claims began to dim when he spoke to The Punch newspapers. Fashanu made spirited attempts to give former self-appointed military President Babangida a clean bill. Since the debt buy-back transaction took place during Babangida's dictatorship and with the degree of knavery that characterized that junta, insinuations were that the missing $6 billions allegedly found by Fashanu might have gone into the foreign accounts of Babangida and his henchmen. But Fashanu, in what to some amounts to sheer double talk and diplomatic brinkmanship, emphasized that he never accused Babangida of theft. Said he, "If you know how government works, you will know that things are not just as straightforward." Who then are the perpetrators and beneficiaries of the scam? Why has Fashanu refused to release the documents incriminating the perpetrators? In short, what does Fashanu want to achieve?

TELL learnt the expose by Fashanu may just be a smokescreen in an ongoing high wired politics in the international circuit. Since the disclosure of the debt buy-back, Fashanu is yet to release a single name or bank account of any Nigerian who has benefited from the deals. Even Babangida, who was loudly suspected by all, has tacitly been cleared by the soccer star turned businessman. But two names have featured prominently as participants and major beneficiaries of the transaction. They are Jeffrey Schmidt and Bob Minton, both American financial investors, who were said to be close to Babangida. The duo were alleged to be the brains behind the major offshore company, Greenland Holdings Inc. based in Panama, that was used to purchase Nigeria's debt. Even between the twosome, the multimillionaire, Minton, seems to have received more of the attacks. But why?

The public, perhaps, had the opportunity to find out recently in Washington DC. The Nigerian Democratic Movement, NDM, led by Professor Bolaji Aluko, head of the Chemical Engineering in Howard University and son of the popular economist, Professor Sam Aluko, organized a public forum where Minton and Fashanu were to speak on all the grey areas in the debt buy-back controversy. Unfortunately, Fashanu, in spite of repeated assurances, surprisingly failed to turn up for the event. The organizers of the event were shocked at Fashanu's absence, especially for the fact that the former Wimbledon Football Club captain and his agent, Robert Clarke, had written to Aluko previously, urging him to help sensitise the relevant sections of the US government and people to their investigations and the need to recover the alleged looted funds for the benefit of Nigerians.

However, Minton, who came to the venue with a heap of documents relating to the transactions, told TELL that he never participated in any dubious deal to rip off Nigerians through their government or agents. "What we did was within internationally recognized financial guidelines and laws." Minton noted that his disclosure, "due to the lies bandied around," was against the agreement he had with the government of Nigeria to keep their transactions strictly confidential. The main grouse of his accusers, Minton claims, is because he is fighting the Church of Scientology. "Fashanu is hired by the Church of Scientology. And his so-called investigator, Robert Clarke, works for the scientology organization."

According to Minton, the Church of Scientology, founded by L. Ron Hubbard, is a very powerful sect which allegedly "draws its members from a broad cross-section of society, and like other destructive cults, uses a sophisticated combination of deceptive recruiting methods, false promises, hypnosis, behaviour modification, sleep deprivation, dietary manipulation, information control, phobia indoctrination and other mind control techniques to entice and control its members." Minton formed the Lisa McPherson Trust to fight and "expose the abusive and deceptive practices of the Church of Scientology and help those who have been victimized by it." The trust, which started operations on January 6, 2000, is named after a young lady, Lisa McPherson, who allegedly died in the Church of Scientology's Fort Harrison Hotel after being held against her will for 17 days. Minton told the magazine that his crusade against the scientologists has caused him great stress, including the "present campaign to tarnish my name and professional integrity."

No doubt, in the titanic struggle between these two powerful forces, a well-heeled organization on the one hand and a wealthy financial investor on the other, all that is foul is fair. And some persons may have been used, even innocently. Certainly too, truth has become a casualty in the crossfire between both combatants. When Minton was given a human rights award in Leipzig, Germany in April, the Fashanu group was alleged to have manipulated this information to mean that he went to hurriedly close his account to Germany and move them to Switzerland.

The several companies said to have been floated by Minton and Schmidt for the purchase of Nigeria's debt were actually owned by the CBN. Such companies included Greenland Holdings Inc. in Panama, Triolet International Limited and Shamrock Financial Corporation, both in New Hampshire, USA. Testifying before the Senate committee, Mahe Rafindadi Rasheed, the deputy governor, domestic operations of CBN, said, "Greenland Holdings was a wholly-owned company belonging to the CBN and used for the purpose of concealing a debt buy-back from the eyes of the Paris Club and others who frowned on debt buy-backs.

Rasheed revealed that the ownership of Greenland Holdings was concealed because of the parity clause in the agreement Nigeria signed with its creditor countries. Consequently, "you cannot single out one creditor and deal with him alone in having a reduction of his debt, that is in purchasing it back from the creditor himself: you must deal with all the creditors on equal basis." As a result of this parity clause, he went further, "that is why third parties must be sought in order to effectuate debt buy-backs. It is also as a result of that, when buying debt buy-back, it must be done confidentially so that other creditors, particularly the Paris Club, would not know."

Really, when the United States of America got to know that Greenland Holdings was a CBN-owned company, which was being used for debt buy-backs, they advised the bank to close it immediately. But the usefulness of floating Greenland Holdings was immense as "we did not want to give money to a third party who may disappear with it," Rasheed said.

But did the debt buy-back yield any financial reward for the country? Rasheed said it resulted "in external debt reduction of over $5 billion for the country." Minton confirmed this to the magazine in Washington. He disclosed that he made a tidy profit of over $45 million. In the agreement signed between CBN and Greenland Holdings on March 24, 1988, it noted, inter alia. "Greenland will cover all expenses, including lawyers' fees and OLD (the bank) fees. Net profit to Greenland will be approximately one per cent of the face value of the debt."

A financial expert who spoke to TELL said the transaction between Minton and the CBN was done within acceptable international laws. "There is no doubt that Minton made a lot of profit but that was based on the content of the agreement. He didn't violate any law." But Fashanu's investigator, Robert Clarke, will hear none of this. In his letter to Aluko, he stated that "domination and evidence indicate that these individuals (Minton and Schmidt) not only profited from these transactions but set up a sophisticated offshore network to establish and operate companies and trusts with most likely the intention of hiding their true identities and ownership so as to try and elude the US tax jurisdiction and many other jurisdictions as well. After close examination of the documents, it is apparent that these individuals set up a complex money laundering operation through established on and offshore finance institutions using real and manufactured Third World debt instruments actively being traded on the secondary market."

If actually Minton and Schmidt were involved in money laundering, why did the US government not prosecute them since they eventually became aware of Greenland Holdings account? And why has Fashanu and is investigator, Clarke, refused to initiate court proceedings against Minton in a US court for tax evasion as they claim. Moreover, if Fashanu's claim that he was motivated by a sense of national pride and patriotism is to be believed, why did he demand for $500 million from President Obasanjo before handing over the documents containing his investigations? And since President Obasanjo made this disclosure, Fashanu is yet to deny or respond. He has, however, argued that the latest move of the government in retaining the services of Phillipe Neyroud, a Swiss attorney, to file criminal complaints against Minton, justifies, to some extent, his allegations of a big scam.

Perhaps, the most devastating criticism of Fashanu's tactics and motives came from his former admirer, George Noah. The London-based Nigerian journalist was, indeed, the first Nigerian to interview and write on Fashanu's "heroic and patriotic" exposition of the $6 billion scandal. On finding out that Fashanu might have fooled the nation, Noah poured invective and diatribe on the former soccer star for his diabolical campaign. He described Fashanu as a military apologist and an Abacha lackey. The ex-footballer, Noah said, will be the first to admit that his widely publicized "Fashanu report" is nothing about politics, "but by commenting on Nigeria's debt buy-back deals from 1988-1993, Fashanu has ignited a political dynamite and the expected debris may eventually consume him."