A consortium of anti-corruption groups who have spent years investigating the Malabu OPL 245 oil scandal have called on Nigeria's Ministry of Justice to break its "thunderous silence" over a secret deal that could have seen huge sums of recovered assets repatriated to a private U.S. company.
The campaigners, who include Nigerian and western non-governmental organisations (NGOs), claim that hundreds of millions of dollars could be diverted from the country under a confidential contract linked to President Buhari's billion-dollar asset recovery programme.
The contract was signed between Lagos law firm Johnson and Johnson Solicitors, which was hired by the government in 2016 to help oversee OPL 245's asset recovery, and a company controlled by U.S. litigation funder Drumcliffe Partners.
Under the terms of the contract, the Drumcliffe company, Poplar Falls LLC, would have been entitled to up to 35 per cent of recovered assets - potentially hundreds of millions of dollars.
This flies against the policy of President Muhammadu Buhari's government to only award a maximum of five per cent of any recovered assets to third parties.
The details of the contract were leaked last month, prompting huge concerns.
Despite repeated requests from PREMIUM TIMES to comment on the revelations, the Ministry of Justice has remained silent.
The anti-corruption consortium, comprising HEDA Resource Centre in Nigeria, Re: Common in Italy, and the Corner House and Global Witness in the UK, now say the revelations are a "slap in the face" for President Buhari.
In a statement to PREMIUM TIMES, they said: "The Ministry of Justice's silence is thunderous. This is a slap in the face for President Buhari's clear policy that lawyers should only get a maximum five percent recovery fee. The Ministry of Justice has a duty to ensure that Nigeria is not disadvantaged by the activities of government-appointed asset recovery lawyers.
"A failure to monitor their contracts is a failure to protect Nigeria's interests. The bucks stops with the Attorney General, and ignorance is not an excuse under the law," they said.
Drumcliffe's PR agency, Montfort Communications, and their lawyers, Carter-Ruck, have explained that the contract was a draft and not the final executed agreement. When asked to confirm that for this report, they failed to respond.
Johnson and Johnson, run by Babatunde Johnson, was appointed by the government in 2016 to help recover assets that are alleged to have been stolen during the Malabu OPL 245 scandal.
The scandal centres on the offshore oil block OPL 245. The block had been awarded to a shelf company called Malabu Oil and Gas in 1998, when Dan Etete was petroleum minister.
It later emerged that Mr Etete actually controlled Malabu.
In 2011, Mr Etete, with the help of senior government officials in the then administration of President Goodluck Jonathan, sold the block to Shell and Eni for $1.1 billion.
He is then alleged to have gone on a massive spending spree with much of the proceeds, including purchasing a private jet that was seized in Montreal, Canada in May as part of the asset recovery process.
Eni, Shell and a number of their corporate executives, former Nigerian government officials, and middlemen have been on trial in Milan since 2016 for allegedly conspiring to seal that deal. The accused, including Eni and Shell, have all strenuously denied any wrongdoing.
The long-running trial is now reaching its end, with the prosecution having presented its closing arguments last month.
Nigeria's legal team summed up its claim for a civil damages award on Wednesday, and asked for the court for a minimum payout of $1.1 billion in the event of a guilty verdict against Eni and Shell.
But throughout the saga, there have been various twists as journalists and NGOs, such as Global Witness, continued to probe the deal.
The latest controversy centres on the asset recovery programme itself, a scheme that is potentially hugely lucrative.
Asset recovery programmes, which involve lengthy court cases in multiple jurisdictions, are usually highly complex and costly.
It is not unusual for governments to outsource that process by appointing lawyers. But the lawyers themselves often need specialist asset recovery financiers to fund the litigation.
These litigation funders take significant risks on behalf of their investors, and in return they can demand large fees that are usually a cut of recovered funds.
In the case of Johnson and Johnson, they hired Drumcliffe as their litigation funder.
To help protect and ring-fence their investors' money, Drumcliffe established Poplar Falls LLC, a special fund incorporated in the US state of Delaware.
It is understood that when the government appointed Johnson and Johnson, the law firm was told that the commission cap for recovered assets would be five per cent, which is much lower than companies such as Drumcliffe usually charge.
But the leaked contract between Johnson and Johnson and Poplar Falls, details of which were reported by Sahara Reporters last month, suggests a much higher reward was agreed.
PREMIUM TIMES and its UK partner Finance Uncovered have been in possession of the agreement since last year but had refrained from publishing its contents until its validity could be established.
It appears to have been signed in March 2018 between Babatunde Olabode Johnson and Drumcliffe principal James C. Little. It was signed on the same day Nigeria applied to the Italian court in Milan to be admitted as an "injured party."
In it, Drumcliffe agrees to provide Johnson and Johnson with up to $2.75 million to fund Nigeria's pursuit of damages from the defendants, in return for more than twice their money back and a 35 percent cut of any proceeds if the Nigerian case is successful.
PREMIUM TIMES initially alerted a senior official in the Nigerian justice ministry responsible for running the country's asset recovery programme about the leaked contract last December, who replied saying that the ministry was "oblivious of any such funding agreement."
The official, Solicitor-General Dayo Apata, said that the government's direct contract with its recovery agent, Johnson and Johnson, was "clear on the terms of payment, mode of payment and account [into which] the funds are to be paid."
Mr Apata confirmed that "recovery agents are only entitled to a percentage (not more than five per cent) of actual recoveries as success fees after remittance of the recovered monies habe been confirmed by the Central Bank of Nigeria."
PREMIUM TIMES pointed out to Mr Apata that certain sections of the funding agreement between their agent, Johnson, and his backers, Drumcliffe, appeared to suggest they had reached a separate and very different understanding to the government's.
One section stated that Johnson and Johnson had a right to Nigeria's entire legal claim in Italy and an associated claim in Switzerland, as opposed to a more limited right to a five per cent professional success fee.
Another section allocated the funder a 35 per cent interest in any successful recovery, instead of a share of Johnson and Johnson's five per cent professional success fee.
It also stated that successfully claimed funds would be paid into an account controlled by a third-party lawyer for priority payment to the funder, instead of being paid directly into the government's asset recovery account first.
PREMIUM TIMES then asked Mr Apata and his boss, Attorney-General Abubakar Malami, a series of follow-up questions. These included whether they believed the leaked funding contract contravened Johnson's own deal with the government, and if so, what action they planned to take.
They failed to respond.
Over the past several months, Johnson and Johnson and Drumcliffe agreed to explain the circumstances in which the contract had been signed - but only on condition of strict commercial confidentiality.
They claimed that the agreement was a draft, not the final executed agreement. Asked to confirm this on the record, following the publication of the leaked contract by Sahara Reporters, they did not respond.
PREMIUM TIMES also approached Attorney General Malami and Solicitor General Apata again in the wake of the leak, to explain the Ministry of Justice's position regarding the contract, but they did not respond.
The anti-corruption consortium has now called on the judges presiding over the Milan trial to "insist" that any damages awarded to Nigeria be paid directly to the government's federation account at the central bank.
A verdict in the trial is expected by the end of the year, although appeals could follow. A judge might also be inclined to award "symbolic damages" of far less than $1.1 billion to Nigeria.
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