EFCC vs. Diezani Allison-Madueke: Another View

By Abubakar D. Sani, Esq.

Introduction

The charges reportedly filed by the Economic and Financial Crimes Commission against the former Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke appear to be potentially undermined by their seeming inconsistency with certain provisions of the 1999 Constitution. This is because (if news reports of those alleged charges are to be believed), all but one of them might be problematic, necessitating – possibly – their re-think by the prosecution. I will presently elaborate, but first, a brief over-view of the charges.

According to media reports, the 13-count charge filed on the 14^th day of November, 2018, accused the former Minister as follows:-

• Count 1: That on the 20^th day of November, 2011, she took possession of the sum of US$20 million dollars, allegedly the proceeds of corruption, contrary to Section 15(2)(d) of the Money Laundering Prohibition Act 2011 as amended in 2012, and punishable under Section 15(3)

• Count 2: That, sometime between February 2012 and June 2012, she took possession of US$17.5million, allegedly the proceeds of corruption, contrary to and punishable under the same provisions of the Money Laundering Act, as amended.

• Count 3: That sometime in September 2013, she acquired a property in Banana Island, Lagos through a proxy, valued at US$37.5million, allegedly the proceeds of corruption, contrary and punishable under the same provisions of the same law as in Counts 1 and 2 above.

• Count 4: That on or about the 4^th day of June 2012, she took possession of the sum of N650million, which was allegedly the proceeds of corruption, contrary to and punishable under the aforesaid provisions of the Money Laundering Act, as amended.

• Count 5: That on or about the 4^th day of June 2012, she acquired certain property in Abuja, through proxies, valued at N650million, which consideration was allegedly the proceeds of corruption, contrary to and punishable under the self-same provisions of the same law as in the previous counts.

• Count 6: That, sometime in May, 2012, she took possession of the sum of N937million, allegedly the proceeds of corruption, contrary to and punishable under the same provisions of the MLP Act, as amended.

• Count 7: That sometime in May, 2012, she acquired certain properties in Yaba, Lagos, through proxies, valued at the sum of N973million, which sum was allegedly the proceeds of corruption, contrary to and punishable under the same provisions of the MLP Act.

• Count 8: That sometime in May 2012 she allegedly took possession of the sum of N928million which was the proceeds of corruption, contrary to and punishable under the same provisions of the MLP Act, as amended, as the previous charges.

• Count 9: That sometime in May 2012, she allegedly acquired certain landed properties in Port Harcourt, Rivers state with the sum of N928million which fund was the proceeds of corruption, contrary to and punishable under the same provisions of the MLP Act, as amended.

• Count 10: That sometime January 2011, she took possession of the sum of N805million, allegedly the proceeds of corruption, contrary to and punishable under the same provisions of the MLP Act, as amended.

• Count 11: That sometime in May 2012 she acquired certain landed properties in Ikoyi, Lagos, through proxies, valued at N805million.

• Count 12: That, sometime between January 2011 and December 2011, she took possession of the sum of US$2.2million, allegedly the proceeds of corruption, contrary to and punishable under the same provisions of the MLP Act.

• Count 13: That, sometime between January, 2011 and December, 2011, she acquired a certain landed property in Old Government Reservation Area, Port Harcourt, through proxies, with the sum of US$2.2million which was allegedly the proceeds of corruption contrary to and punishable under the same provisions of Sections 15(2)(d) and 15(3), respectively, of the MLP Act, as amended.

What About the Law?

Section 15(2)(d) of the Money Laundering Act, as amended, which the former Minister is charged with contravening, provides as follows:

“Any person or body corporate, in or outside Nigeria, who directly or indirectly acquires, uses, retains or takes possession or control of any fund or property (which he/it) (knows) or reasonably ought to have known that such fund or property is or forms part of the proceeds of an unlawful act, commits an offence of money laundering under this Act”

Section 15(3) provides that the punishment for contravening the provisions of Section 15(2)(d) of the Act is imprisonment for not less than seven years, but not more than fourteen years.

Analysis

It can be seen that, with the exception of the 3^rd Count, all the other twelve Counts in the indictment accuse Mrs. Madueke of committing the acts which allegedly constitute violations of the MLP Act between January 2011 and June 2012. The sole exceptions are the acts alleged in Count 3, which purportedly took place in September 2013. The legal implication of this will presently be explained.

Legal Status of the Charges

It is not only in movies that – as thespians say – timing is everything. It is even more so in relation to criminal indictments. In other words, the date when an offence was allegedly committed is crucial in determining the guilt or otherwise of the alleged culprit, having regard to the provisions of Section 36(8) of the 1999 Constitution, which stipulate, inter alia, that: “No person shall be held to be guilty of a criminal offence on account of any act or omission that did not, at the time it took place, constitute such an offence”.

In the context of the charges against Mrs. Madueke, at the time she allegedly committed the acts alleged in all but the third count (between January, 2011 and June, 2012), the provisions of Section 15(2)(d) of the MLP Act which she allegedly contravened did not exist; they were not part of the extant MLP Act, 2011 that was in force at that time; rather, they were inserted in the amendment thereto, the Money Laundering (Prohibition) (Amendment) Act, 2012, vide Section 9 thereof, which took effect on the 21^st day of December, 2012.

CBN’s GSI Guidelines and Chronic Bank Debtors

The circular recently issued by the Central Bank of Nigeria (CBN) permitting banks to set off the credit balances of customers against any debts owed by such customers with other banks, seems – on the face of it – to be long over-due, given its glaring benefits as a solution to the pervasive incidence of non-performing bank loans.

However, it is worthwhile to see if it stands up to legal scrutiny, given that the CBN introduced it purportedly pursuant to its mandate in Section 2(d) of the CBN Act, 2007, “to promote a sound financial system” in the country.

The Guidelines stipulate that the Global Standing Instructions shall be used as a last resort by a creditor-bank – without recourse to the Borrower – to recover past due obligations, from the latter, through a direct set-off from the Borrower’s deposits or investments held in his qualifying accounts with participating banks.

In order to activate it, customers will be required to submit certain information (their BVN, the value of the full repayment amount, the duration of the facility and the repayment account). In the event of a loan default, the GSI is triggered by the Creditor-bank activating the mandate, specifying the amount to be recovered.

Critique

I believe that the initiative overlooks the implications of the legal relationship between a bank and its customer, which is essentially contractual. Having regard to the GSI, its legal background viv-a-vis all the parties involved, in my view, is the separate contractual relationship which exists between each bank (the lending bank and the setting-off bank) and the customer, inter se .

It is trite law that only parties to a contract are bound by it and no one may enforce it except the parties themselves – even if the contract was made for the benefit of a third party. This means, in this context, that any undertaking which a customer gives to a bank to set off any debt due from him to that bank against any money which he may have in another bank, is not legally enforceable against the second bank – unless that bank was a party to the undertaking.

The apparent answer to this might be that the debtor is estopped by his undertaking from resisting the set-off. However – just like contracts – estoppel also applies only to parties or their privies. I believe that this excludes the second bank, because it is not the privy of the first bank, either in law or in estate – the only two (out of the three) categories of privies recognized by law for the application of the doctrine, which might be applicable in the circumstances.

I believe that the foregoing raises the question of the legal status of CBN’s said policy/directive: does it have the force of law? Can it be justified under any provision of the CBN Act and/or any other law? Can it displace or override the contractual relationship between a customer and a bank?

Written By Abubakar D. Sani, Esq.