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09.03.2021 investigations EXCLUSIVE: Over N200m Fraud in Lai Mohammed’s Ministry of Information and Culture

Published 9th Mar, 2021

By Damilola Ayeni

Power doesn’t corrupt people. People corrupt power.” — William Gadis

In 2017, news of a missing file sparked panic among the bigwigs in the Federal Ministry of Information and Culture. The file contained documents of a procurement deal carried out towards the close of the 2016 financial year. When all efforts to retrieve the papers failed, the ministry credited each worker in the Procurement Department with N175,000. It was an appeal to anyone with the file not to let out the content.

Lai Mohammed’s ministerial appointment in October 2015 was good news in the Ministry of Information and Culture. The ministry used to be two different entities before its amalgamation by President Muhammadu Buhari a day before the swearing-in of his long-awaited cabinet. All ministries had been without ministers for more than four months. When the president eventually tilted the poster boy of his anti-corruption mantra to Radio House, the wait looked like it was worth it.

GENERATOR FRAUD

Serious procurement fraud had been going on among the ministry’s fat cats for a long time. A little while before Lai’s appointment, a contract was awarded for the supply of 18.5 and 13KVA diesel generators to the Federal Information Centres (FIC) in the country. The contractor supplied 3.5KVA generators but was primed to get the amount appropriated for the 18.5 and 3.5KVA plants. He was going to give a good share of the money to the ministry officials who made the contract possible.

In Nigeria, procurement is one of the government activities most vulnerable to corruption. Top public officials liaise with bidders before awarding a contract, and the contractor who agrees to do give up the highest bulk gets the job. Up to 60% of all Nigerian corruption cases are tied to public procurement.

For the generator project, a worker in the Ministry of Information and Culture told FIJ that top ministry officials were poised to harvest up to 70% of the money. Expectations were, therefore, high for the new minister. Ordinary workers of the ministry hoped that Buhari’s ‘change’ mantra would begin with the sanitization of the procurement sector. And for Lai, the first test was going to be the generator deal.

Would he approve the payment or prosecute the contractor and everyone involved in the alliance? The minister would fail, and barely six months after his appointment, ministry workers would, in a protest, accuse him of budget inflation and financial irregularities.

WHEN INVESTIGATORS ARE THE FRAUDSTERS

Lai set up a panel over the generator controversy. Investigators deployed to ascertain the delivery of the generators at the FICs had submitted reports suggesting massive procurement fraud. The panel was, however, made up of the same directors who masterminded the fraud, and so was a hornless bull. The Civil Service Code of Ethics condemns any activity that is inconsistent with morality. A civil servant must not solicit payment or gifts in the course of discharging his/her duties.

But the panel would be completely silent over the breach of ethics by some of its members. It ruled that the contractor be paid to the tune of what he supplied. At the end, a huge sum remained in the coffers of the ministry from the generator project and leftover from other capital projects. The ministry’s big names, who would not let such a huge sum return into the Single Treasury Account (TSA), approached the minister with a plan. They could warehouse the fund with the help of the Accountant General of the Federation, and then come up with a deal. They would benefit and the minister would benefit, too. Why let the money go? Their plan was approved, and then the game began. 

On Wednesday, March 29, 2017, Bunmi Morgridge, Deputy Director of General Service, wrote a letter to the then acting Permanent Secretary, Hussaini Dayar, asking for urgent procurement of some office equipment, including five Ford Ranger vehicles and some computer accessories such as 30 HP laptops, 30 MacBook pro (2016 Edition) laptops, 30 Apple iPad pro 12.9 inches 128gb, 30 HP Laserjet P2035 Black and White toner printers, 30 HP Laserjet colour printers, 30 HP Sharp AR 6020 Digital photocopiers amongst others.

FLOUTING THE PROCUREMENT ACT

In response, Dayar directed the immediate commencement of procurement processes. The idea was to pull out the warehoused fund for an entirely new project and the players would get their cuts. What followed was a string of activities that contravened standard procurement procedures as contained in the law. The 2007 Procurement Act forbids any public acquisition without prior budgetary appropriation. The law also provides that invitation of bids be advertised on at least two national newspapers in addition to the procurement journal and the official websites of the procuring entity. None of these was done.

In a letter dated April 4, 2017, Longe Sunday, Deputy Director of Procurement, advised the APS that a request for quotation be sent to Messrs Coscharis Motors Ltd. In a doctored Ministerial Tenders Board (MTB) minute, Morgridge would claim that the ministry did not announce the bidding for vehicles in any newspaper because of the new government policy on local content. However, FIJ found out that Coscharis Motors is not an autonomous Nigerian vehicle assembler, consequently invalidating her claim.  

INFLATION OF N34.6M ON FIVE CARS

The Ford Ranger

For the purchase of computer accessories, the director cited “some technical constraints” and the imminent closure of 2016 financial year as reasons it could not follow due process in the bidding. Coscharis was to supply five Ford Ranger Base (4×4) Double Cabin at N18,550,000 each, while Gbarus Nigeria Ltd got the contract for computers, phones, printers and photocopiers at N89,768,250. Presently, each of the vehicles sells for N14,500,000 (USD38,032) at Coscharis, and would have sold for N11, 600, 000 at the exchange rate of 2017, leaving proceeds of N34.6million for Lai and his team on the motor vehicles contract alone.

By law, the Ministerial Tenders Board (MTB) is the approving body for all procurements in a ministry. Its decision is to be communicated to the minister for implementation. FIJ gathered that for the over N180million purchase of Ford vehicles and computer accessories, no MTB meeting was held. A minute was cooked and 12 out of the 13 board members (directors) appended their signatures. Following the minister’s approval, the purchases were made, and the documents kept on a shelf in the office of the Director of Procurement. When a quick check could not produce the file later, the game players sensed fire on the mountain: a great deal of scandal for the minister and the ministry championing the change begins with me campaign of the government. They pleaded with the workers they thought were capable of such stunts, but such pleas would not produce the missing documents. Then they summoned staff of the Procurement Department to an emergency meeting over ‘missing file’. While the meeting was on, each attendee received a credit alert of N175, 000.

“They said the money was meant for project monitoring, but it was meant to silence the staff,” a source, who spoke on the condition of anonymity, said. “It’s about four years, now, and no one has asked anyone to monitor anything. They only used ‘project monitoring’ to process the money in the voucher.”

NOT THE ONLY FRAUD

That was not to be the only fraud in Lai Mohammed’s information ministry. The Bureau of Public Procurement (BPP) rejected the Federal Ministry of Information and Culture’s request to purchase motor vehicles in 2019. However, the ministry went ahead to pull out N20million appropriated for the procurement and spent it outside due process.

The vehicle fund was spent in bits of N4.9million under the blanket of recurrent expenditures. It was a play upon the prerogative of the permanent secretary, who was part of the scheme. For services that cost less than N5million and have to do with the day-to-day running of the ministry, the PS reserves the right to effect payment without recourse to the National Assembly or the MTB. 

“They said they wanted to repaint some places. They said they wanted to buy bulbs, just to get the money into their pockets,” a source told FIJ.

In March, 2019, Lai was a guest at the National Assembly, where he presented his ministry’s budget for the year. In the budget, N82million was earmarked for the Abuja Cultural Carnival and while defending it before the Senate Committee on Culture and Art, the minister said it was a modest proposal for a carnival of national magnitude.

Findings revealed that a little over N55m was eventually released for the carnival, but it never held. In April, 2019, the ministry rescheduled the carnival, and a few days to the new commencement day, November 23, it was postponed again, this time indefinitely. FIJ learnt that the money was neither deposited in the TSA nor found in the ministry’s account at the end of the financial year.

A N20million contract was awarded to a company reportedly owned by Dr. Musibau Kayode, Director of Finance and Account, for a seminar on International Public Sector Accounting Standard (IPSAS). The event took place at the National Press Centre for three days. About 100 account officers from either arms of the ministry participated, and each got N60,000, putting the total pay at about N6m.

Could the organizers have spent N14m on lunch and honorarium for trainers? Dr. Kayode had been transferred to the Ministry of Police Affairs shortly after playing a role in the 2016 procurement deal. Lai allegedly influenced his return to his ministry in 2019 to replicate the same ‘ingenuity’. 

HOW IT STARTED

The 2019 procurement fraud started with a request to the BPP for permission to apply a selective tendering process. The option of selective tendering by the Ministry of Information and Culture was to give allowance for the minister and his compadres to take undue advantage of procedures. The minister’s cousin, known to ministry workers as ‘Otunba,’ would get contracts for furniture, wall calendars and rehabilitation of the Federal Government Press in Lagos at N67million.

Except in some extreme situations spelled out in the PPA, open competitive bidding is to be conducted for all public procurement. In competitive tendering, bidding is open to all qualified companies in the country. It is advertised in national dailies and the Federal Tenders Journal.

At the initial stage of the 2019 procurement process, Charles Ojugbana, Director Publication, Production and Documentation (PPD), sent an advert to the Federal Tenders Journal for bids in line with due process. But the minister ordered the immediate withdrawal of the advert, which was published on Page 7, Volume 15 of the publication. Lai questioned the director’s impudence, and when the latter insisted he needed no permission to follow due process, the minister ordered his suspension. Charles retired while on suspension in 2020.  

Engr. Evwierhoma, Deputy Director of Procurement, got N1.5million for the conduct of public bid opening and evaluation exercise, which would never hold. Documents backing the event were forged through the help of Mustapha Abubakar, Admin Officer at the Procurement Department. The statutory Procurement Planning Committee (PPC) was also not constituted for the 2019 capital projects. Signatures were forged and documents doctored. 

By evening of October 6, 2020, the Independent Corrupt Practices and other Related Offences Commission (ICPC) had received two different petitions challenging procurement processes under Lai. However, FIJ learnt that the minister frustrated all investigation attempts by the ICPC.

Transparency International recently ranked Nigeria as the second most corrupt country in West Africa, and Lai Mohammed, as spokesman of an anti-corruption government, blamed the report on the data and retrieval system, saying the country was underreported in the area where it was making progress. A careful look at TI’s 2020 Corruption Perception Index (CPI), however, revealed that public procurement corruption was to a large extent responsible for Nigeria’s poor ranking.

“Lai Mohammed has been swallowing money through the backdoor,” a worker in the ministry told FIJ. “Ask him for the details of the 72 people that attended his purported bid evaluation exercise in 2017. It never held. Ask him for members of the statutory Procurement Planning Committee for 2019 projects. He did not set one up.”

FIJ made several attempts to speak with Lai Mohammed on phone, but calls to his line were not answered. An SMS to his phone was also not replied.

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Published 9th Mar, 2021

By Damilola Ayeni

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