C O N F I D E N T I A L SECTION 01 OF 03 ABUJA 000578
DOE FOR PERSON
DEPT PASS USTR FOR AGAMA
E.O. 12958: DECL: 03/27/2018
TAGS: PGOV OREP PREL KCOR EFIN ECON NI
SUBJECT: CODEL SHELBY MEETS WITH ACTING EFCC CHAIRMAN
Classified By: Ambassador Robin R. Sanders for reasons 1.4 (b & d)
Â¶1. (C) SUMMARY. Senators Shelby, Gregg and Corker met with
Acting Economic and Financial Crimes Commission (EFCC)
Executive Chairman Ibrahim Lamorde on March 17 in Abuja.
Ambassador, EconCouns and INLOff also attended. The meeting
focused on the activities of the EFCC regarding corruption,
money laundering and terrorist financing. The meeting also
addressed banking sector reform and the problem of oil
bunkering in the Niger Delta. Lamorde explained that the
EFCC has evolved its focus from money laundering and
financial fraud cases, such as "419" e-mail scams, to
handling all financial crimes including the prosecution of
high-ranking government officials for corruption. He opined
that no matter what resources are devoted to alleviating
poverty, those resources will continue to be squandered until
corruption is addressed. Lamorde assured the Senators the
EFCC is independent, reporting only to the National Assembly
and the Office of the President. He also noted that the EFCC
can prosecute cases internally without reporting to the
Attorney General. END SUMMARY.
Â¶2. (C) Senators Richard Shelby, Judd Gregg and Bob Corker,
accompanied by Ambassador, EconCouns, staffers and INLOff
(notetaker) met with Acting EFCC Chairman Lamorde at EFCC
headquarters in Abuja on March 17. Lamorde introduced Chief
of Staff Dapo Olorunyomi, Head of External Relations and Fund
Raising Mr. Mohammed Bamalli, Head of Operations in Abuja Mr.
Bala Ciroma, Assistant Team Leader for the Terrorism Finance
Unit for the Nigerian Financial Intelligence Unit (NFIU) Mrs.
Biola and First Special Assistant to the Acting Chairman Mr.
Musa Bello. Senator Shelby indicated that the CODEL was
primarily interested in money laundering and terrorism
financing, as well as the challenges that the EFCC faces.
Lamorde proceeded to describe the EFCC's history and
Â¶3. (C) Lamorde said he has been with the EFCC since its
inception in 2003. Since that time the EFCC has evolved its
focus from money laundering (M/L) related to illicit drug
proceeds and financial fraud cases, such as "419" e-mail
scams, to handling all financial crimes including the
prosecution of high-ranking government officials for
corruption. In fact, Lamorde noted that the need for creating
the EFCC and expanding its mandate became clear when the
Financial Action Task Force (FATF) placed Nigeria on its
warning list of countries with deficient monitoring of
financial institutions. The image of the Nigerian banking
sector was tainted. Most banks at the time were sole
proprietorships with insufficient capitalization and
inadequate oversight. Lack of oversight led to the collapse
of several banks, problems with fraud and money laundering,
and loss of confidence in the banking sector. To rehabilitate
the image of its financial institutions, the GON reduced the
number of banks from 100 to just 24 at present, required
larger capital reserves, increased deposit insurance
requirements and established new rules on bank ownership. In
addition, the GON amended its 1995 Money Laundering Law and
passed the Money Laundering (Prohibition) Act of 2004 to
include all financial crimes such as public corruption, drugs
and 419 scams.
Â¶4. (C) According to Lamorde, there was a need to establish
the NFIU not only to track M/L in the banking sector but also
terrorism financing (T/F), particularly after the events of
9/11. Since its creation under the EFCC Establishment Act of
2004, the NFIU has worked aggressively to successfully remove
Nigeria from the FATF list of non-cooperative countries. The
NFIU subsequently became a member of the prestigious Egmont
Group and now shares and receives intelligence information
from other member FIUs. Because of the NFIU's actions, banks
are now subject to monitoring of their activities and to
reporting requirements through Suspicious Transaction Reports
(STRs) and Currency Transaction Reports (CTRs). This type of
monitoring has revealed several cases of corruption. For
instance, through monitoring STRs, an Inspector General of
Police, who was found to be extremely corrupt, was
prosecuted, convicted and his assets seized and forfeited.
Other public officials such as senators, governors and civil
servants have also been detected and successfully prosecuted.
Regarding T/F, Lamorde indicated that the EFCC is building a
database of all charities which will allow them to monitor
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membership and finances to determine the source of funding.
He acknowledged that monitoring the finances of charities is
difficult as most funds come in the form of undeclared
donations. However, he commented that the best indication of
suspicious activity is the outward display of wealth by the
charity that has not been reported and that the EFCC will
generally investigate such cases.
Â¶5. (C) Senator Shelby asked about illegal activities in the
Niger Delta and the issue of poverty and the distribution of
wealth. Lamorde explained that the Niger Delta is a resource
rich region of Nigeria which faces a serious problem with oil
bunkering, with a nexus to arms trafficking, which he
described as criminal in nature and not related to any
political or social issues as often claimed. He added that
no matter what resources are devoted to alleviating poverty,
those resources will continue to be squandered until
corruption is addressed. He also noted the prevalence of
kidnapping and extortion which he attributed to petty
criminal gangs that operate in the area.
Â¶7. (C) Senator Shelby asked about the oversight and
monitoring of the banking sector. He posited that if banks
developed a better understanding of their customers' needs
and focused on strengthening the relationship with their
clients, they could more effectively monitor illegal
transactions. Lamorde responded that banks in Nigeria are
fairly large and attempt to serve a broad and diverse
clientele. Due to the volume and complexity of financial
transactions, banks must be alert to illegal activities and
are required to submit STRs and CTRs as they are in the best
position to monitor their clients' transactions, particularly
in cases of public corruption where deposited funds exceed
the official's declared assets and sources of income under
public disclosure laws.
Â¶8. (C) Senator Shelby also asked for the EFCC's insights into
the movement of cash by couriers and the difficulty of
monitoring transfers over borders. Lamorde acknowledged that
Nigeria has large borders such as the border with Cameroon
that are not well monitored. However, he noted that there
have been large seizures of cash at official border posts.
The perpetrators are generally wealthy Lebanese or South
Asians who convert Nigerian currency into US dollars for the
purpose of depositing the funds in Dubai where banking
regulations are lax. Senator Shelby asked whether such
persons are being monitored. Lamorde stated that a
significant number of 419 e-mail scams are conducted by
Lebanese and that it is very difficult to monitor their
finances as they immediately transfer funds to other Lebanese
accounts around the world.
Â¶9. (C) Senator Gregg inquired whether the EFCC is
independent, who it reports to, and whether it has powers of
arrest and prosecution. Lamorde said the EFCC reports to the
National Assembly in its oversight capacity and the Office of
the President. He emphasized that EFCC has an internal
prosecution unit and does not have to report to the Attorney
Â¶10. (C) Senator Corker asked about illegal oil bunkering.
Lamorde responded that pilfering is high and that pipelines
are routinely sabotaged. The oil is then sold on the black
market, in some cases to countries with refinery capacity but
no oil resources. For instance, refineries in Cote d'Ivoire
and Cameroon have routinely purchased bunkered Nigerian oil.
The origins of the oil were identifiable from its physical
characteristics. When the GON discovered these instances of
illegal bunkering, it made arrangements to sell legal crude
oil to these refineries in order to discourage continued
trade in illegal oil. Senator Corker asked what the
difference in price was at the time. Lamorde stated that it
depended on the prevailing market price but that the impurity
of the bunkered oil appreciably raised refining costs.
However, he cited examples of specific instances, where
bunkered oil sold at discounts of 20-30 percent. Lamorde
added that the EFCC had reduced its presence in the Delta as
violence increased and the military had to be called in.
Â¶11. (SBU) Senator Shelby thanked Lamorde for the discussion
and invited him to visit the Senate next time he is in the
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Â¶12. (U) CODEL did not have an opportunity to clear this
message prior to its departure.