This is an amazing story, not the corruption (which is barely news) , but the misreporting by Global Witness and the Western media generally.
Global Witness write:
“NEW LEAKED EMAILS PUT SHELL AT CENTRE OF BILLION DOLLAR BRIBERY SCHEME INVOLVING SOME OF THE MOST POWERFUL OFFICIALS IN NIGERIA” (ref 1)
They then write:
“Shell’s most senior executives were told payments for massive oil block would go to a convicted money-launderer, and then likely flow to then President Goodluck Jonathan and others, but still went through with the deal.
Oil giants Shell and Eni knowingly participated in a vast bribery scheme for one of Africa’s most valuable oil blocks which deprived Nigeria and its people of $1.1billion, an exposé by Global Witness and Finance Uncovered reveals today.”
What do we know from past history about such transactions? Thanks to Eva Joly we actually know a great deal (ref 2) . What we now know is that the web of payments is generally far reaching (ref 3). In the case of Elf a transaction with Angola had payoffs to the French Prime Minister and other French Ministers, head of French secret service and the German Foreign Minister.
Let us look at the questions NOT ASKED. Why did Shell enter into this transaction and what were the prices paid? As told by Global Witness Shell had no reason to enter into this transaction at all. Really? Lets put another scenario. What would be a fair price for the asset? If the oil asset were worth $2billion and corrupt officials were only asking $1bn as long as the payment was paid to them then we know one step of why Shell was tempted to enter into these transactions. It was getting assets below fair market price. But that is not yet the full story.
If the asset was worth $2bn but only $1bn was paid it can be entered into the books of Shell at fair market price and the difference can be shared out among a privileged few. It is that opportunity that would make sense of Shell ignoring previous court orders. The possible private gains would be so enormous that a mere $30m fine would be spare change. Global Witness write:
‘Most alarmingly for investors, when the OPL 245 deal was being negotiated Shell had already been charged in a U.S. case for paying bribes in Nigeria. Five months before the deal was struck, Shell had entered into a deferred prosecution agreement – the equivalent to being under probation – with the U.S. Department of Justice, which was still in place when the deal went through. Today’s news suggests Shell may have violated this agreement by entering into a bribery scheme. It is hugely concerning that the company’s most senior executives went anywhere near this deal given the company had such serious sanctions hanging over it’.
This is so naive that it is culpable.
When they say the loss to Nigerian tax payers is $1bn this is appallingly false accounting. The loss to Nigeria is the fair market price which could be $2bn or more. Are investigative reporters always this naive?
Lets look at some history. In the past there have been cases where an MNC has sent someone to bribe a foreign official (Japanese) only to discover that the foreign official only asked for 25% of the budget.The negotiator then arranged for the Japanese official to increase his demands on the basis that the Japanese official and the MNC negotiator would share the balance. That is how these matters work.
So typical of western media it is reported as a Nigerian scandal (ref 4) , whereas with Elf the judge, Eva Joly, made it clear it was a FRENCH scandal in its own right. Shell is not at the centre of a Nigerian corruption scandal, Shell is at a centre of Shell corruption scandal.
In no other situation would anyone expect someone who is willing to steal from Jane (Nigeria) to be above suspicion of wishing to steal from William (Shell). But this involves Nigeria so normal common sense does not apply.
Is this the standard of investigative reporting one can expect when Africa is at the other end?
- David Ignatius
eva joly – Legal Affairs – True Crime_ The Scent of French Scandal