Consultancy Fee Scandal: Jonathan Approved N1.45b, BPE Tells EFCC
Detectives probing the alleged N1.45 billion legal and consultancy fees scandal at the Bureau of Public Enterprises (BPE) have got some key documents which will help them get to the root of the matter.
The BPE is insisting that the legal contract was valid because ex-President Goodluck Jonathan approved it, based on a memo from ex-Vice President Namadi Sambo, who was the chairman of the National Council on Privatisation (NCP).
It also said Sections II (J) and 55 of the Public Enterprises (Privatisation and Commercialisation) Act Cap. P.38, LFN 2004 exempt the National Council on Privatisation (NCP) from complying with the processes of the Bureau of Public Procurement (BPP).
In a June 27 letter to the Economic and Financial Crimes Commission (EFCC), the BPP requested the anti-graft agency to investigate the payment scandal.
One of the lawyers of the Peoples Democratic Party (PDP) was paid N950 million for the liquidation of the Power Holding Company when the company had ceased to exist and N500 million was paid as consultancy fees to the Office of the Accountant-General of the Federation.
The fees were paid contrary to the advice of the immediate past Attorney-General of the Federation, Mr. Mohammed Bello Adoke (SAN) and the BPP.
Based on the BPP alarm, the EFCC has since started probing the payment.
But, in a fresh twist, the BPE insisted that the contract was legal and approved by ex-President Jonathan.
Armed with a heap of documents sent to EFCC, the agency said its supervising organ (the National Council on Privatisation) does not need any approval of its disposal procurement from BPP.
One of the documents, exclusively obtained by our correspondent, reads in part: “The Bureau of Public Procurement reviewed the procurement process and issued Certificates of ‘No Objection’ dated February 26, 2013 (attached as Annex U4) to the BPE to appoint Messrs J.K. Gadzama & Partners as the Consultant, Legal Advisory Services for the winding up of PHCN in the sum of N929, 613,188.94 inclusive of 5 per cent VAT. A letter of award /engagement was issued to J.K. Gadzama &Partners on 6th March, 2013.
“The National Council on Privatisation at its 3rd meeting for 2013 held on Thursday, May 9, 2013 approved the engagement of Messrs. J.K. Gadzama & Partners as the Consultant, Legal Advisory Services for the winding up of PHCN in the sum of N929,613,188.94. Excerpts of NCP minutes attached.
“Thereafter, copies of the draft contract agreements were forwarded to the Vice President and Chairman, NCP (for approval), who subsequently directed that the draft contract agreements be forwarded to the Honourable Attorney-General of the Federation (AGF) for review before execution.
“By a memo referenced SH/VP/BPE/C2/XVII, dated August 30, 2013, a copy of a memo from the AGF to the Vice President and Chairman of NCP dated August 27, 2013 was forwarded to the BPE by the Office of the Vice President and Chairman of NCP for necessary action.
“In the said memo, the AGF raised objection to the appointment of J.K. Gadzama as Liquidator of PHCN Plc, stating that such is within the purview of PHCN Board of Directors only.
“Following the intervention of the Chairman of the Board of NELMCO, the AGF in his letter to the DG of BPP dated 11th, September 2014 (which was copied to the DG BPE) withdrew his earlier query on the ‘No Objection’ earlier granted by BPP to procure J.K. Gadzama and Partners for legal advisory services for the winding up of PHCN Plc.
“BPE, in reliance on the letter above referred requested BPP to revalidate its earlier “No Objection” granted. The BPP declined to withdraw its “No Objection” without adducing any reason for doing so.”
The BPE said it reported the stalemate to the National Council of Privatisation (NCP) at its meeting on April 16, 2015.
It added: “The NCP noted that since the AGF had withdrawn his query on the procurement and there was no other tenable reason to withhold it, approved that BPE should immediately proceed to execute the contract with Messrs. J.K. Gadzama & Partners as the consultant, legal advisory services for the winding up of PHCN in the sum of N929,613,188.94 based on the ‘No Objection’ earlier granted by BPP.”
The BPE also gave the details of how ex-President Jonathan approved the contract during the transition period.
The agency said: “In a briefing memo to His Excellency, the former President on the decisions of NCP, the former Vice President and Chairman of NCP, among other things, highlighted its approval directing BPE to immediately execute contract with J.K. Gadzama for the winding up of PHCN Plc in the sum of N929,613,188.94 based on the ‘No Objection’ earlier granted by BPP since all contested issues had been resolved.
“The former President noted the said decision without any objection(memo attached as Annex U9). It is based on the two approvals of the NCP and Mr. President that BPE executed the contract with J.K.Gadzama & Partners who have since commenced execution of the contract.”
The BPE said it does not need any approval from the BPP to execute any procurement dealing with disposal of public property once it is carrying out NCP directive.
It said the Public Enterprises (Privatisation and Commercialisation) Act Cap. P.38, LFN 2004 empowers NCP to appoint and determine advisers and their remuneration.
Section II (J) of the Public Enterprises (Privatisation and Commercialisation) Act Cap. P.38, LFN 2004 empowers the NCP to approve the appointment of Advisers and their remuneration. The BPP had earlier claimed that the AGF did not at any time withdraw his ‘No Objection’.
The Director-General, Mr. Emeka M. Ezeh, said in a letter that no instruction was received from the AGF nullifying the earlier directive.
The letter said: “The Bureau of Public Procurement (BPP), having examined the request wishes to draw the attention of the BPE to Paragraph 14 of the Honourable Attorney-General of the Federation (HAGF)’s letter to the BPP referenced that; “item 1,3,5,6 and 8 of the scope of work for the Legal Advisor unnecessary for the liquidation of the PHCN.
“Similarly, any of the remaining items 2,4,7 and 9, which is not contemplated by the procedure described in Sections 457 -468 (and there is hardly any contemplated) would equally be unnecessary to accomplish the liquidation”.
“ It can be deduced from the above citation that the HAGF’s position on this procurement clearly indicates that Legal Advisory Service is not needed as all constituent items (1-9) under unnecessary as listed by the HAGF constitute all items under the Legal Advisory Service, as such; no item is left for BPP’s consideration for a further review.”