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OPL 245: Shell Den Haag HQ was raided by 60 investigators

Snippets from an article originally published by Dutch magazine Vrij Nederland on 9 November 2017. Translated from Dutch to English by Iefke Prins.

Clearly, Shell has played a crucial role in criminal activities; ‘the most important decisions were made at the headquarters in Den Haag’; Top management at Shell looked the other way and did not want any contact with Etete’; In the early morning of 17 February 2016, thirty tax authority investigators together with thirty Italian colleagues raided the Shell headquarters at the request of the Italian prosecutor. In the directors’ offices, 1800 pages of documents and e-mails were seized.; According to the e-mails, Shell was very much aware that Etete was corrupt.; On the day of the raid on Shell’s offices, the company’s CEO Ben van Beurden’s phone was wiretapped by Dutch police. In a leaked conversation with CFO Simon Henry, he mentioned ‘unhelpful e-mails’ from Copleston, who speculated ‘who would get paid what’. Van Beurden chalked up the conversations as ‘pub talk’, which he called ‘foolish’. He also decided that it would be better if the raid would not be reported to shareholders.; He instructed CFO Henry to ‘not voluntarily say anything other than what’s being asked’ to the authorities.; Shell’s behavior is all the more striking because the company was already under enhanced control by US authorities because of another Nigerian corruption case.

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Bags filled with Naira’s were divided amongst politicians. Photo: Shuttershock.

A scheme to purchase an oil field from a corrupt Nigerian former minister of oil was devised and approved at Royal Shell’s headquarters in The Hague. The complete file landed on journalist Harm Ede Botje’s desk. A reconstruction.

A raid on Shell’s headquarters, two former UK Secret Service MI6 agents negotiating with a corrupt Nigerian former minister of oil affairs on behalf of Shell, a former Russian ambassador intermediary in talks with the FBI, a fugitive Nigerian ex-Minister of Justice, millions of dollars in kickbacks for employees of the Italian oil company Eni, bags of Nigerian Nairas being divided among politicians and businessmen. They seem the right ingredients for a riveting thriller, but these events actually happened.

It is the story of a major corruption case during the purchase of an oil field in the Gulf of Guinea. Royal Shell played a key role: at the headquarters in The Hague the group created a paper reality. The upper echelons of the company set up and approved a framework to buy an oilfield from a corrupt ex-oil minister, a framework that did not comply with their own business principles and appears to be in violation of the law.

Earlier reports have already come out regarding the corrupt practices during the purchase of the oil field in Nigeria, also by Dutch media. But Vrij Nederland recently came into possession of the complete case the Italian Prosecutor’s Office has compiled: a hard drive containing nine gigabytes of information – thousands of pages of internal e-mails, reports and wire tapped phone calls.

During a lawsuit in London last year, the current Nigerian government said there had been a ‘corrupt agreement with an oil consortium’ of Shell and Eni. Italian prosecutor Fabio de Pasquale requested prosecution of five high Eni officials and four former Shell employees at the Italian court earlier this year. ‘Clearly, Shell has played a crucial role in criminal activities,’ De Pasquale wrote to his Dutch colleagues on October 15, 2015, and: ‘the most important decisions were made at the headquarters in Den Haag’. Shell has always taken the view that even if corrupt payments were made, they happened without their knowledge or control and that there is no cause for prosecution of Shell or Shell employees. It remains to be seen whether that position will prove tenable.

Shell entity

OPL 245 is a 1,945 square kilometres stretch of ocean in the Gulf of Guinea, south of the Niger Delta, close in size to the entire province of North Holland, reaching depths of 2400 meters. An oilfield located under the sea bed contains an estimated 9 billion barrels of oil at the astonishing value of – at the current oil price – 450 billion dollars.

On April 29, 1998, Dan Etete, Minister of Oil during the brutal and corrupt regime of General Sani Abacha, allocated block OPL 245 to a company called Malabu Oil and Gas Ltd., which had been founded just 5 days prior. The company was owned by Mohamed Sani, an alias of a son of dictator Abacha, and Hassan Hindus, the wife of an accomplice of Etete. Also involved was a certain Kweku Amafagha, which turned out to be an alias of Etete himself. Malabu – a shell entity – paid the lowly sum of 2 million dollars for the very oil-rich block. The deal violated all policies and laws of the Nigerian government. After the death of dictator Abacha, Mohamed Sani disappeared from the books and Etete thus gained complete control over the company.

In March 2001, Malabu reached an agreement with Shell, with Malabu maintaining sixty percent of shares, and Shell being awarded the mineral rights. Etete, no longer a minister at that time, negotiated on behalf of Malabu.

Mr. Corruption

In July 2001, the new – democratically elected – Nigerian government headed by Olusegun Obasanjo, an avowed opponent of his predecessor Abacha, retracted Etete’s license. In December 2003, Shell received the exclusive mineral rights to OPL 245 in exchange for 210 million dollars. Etete contested that decision and received full ownership again in 2006, after years of legal proceedings. It appears now that foul play was involved here: the then-Minister of Justice Bayo Ojo was understood to have received 10 million dollars in return according to FBI research.

Etete tried to sell OPL 245, talking to, amongst others Gazprom and the Chinese national oil company CNOC, but with Shell continuing to claim rights to the oilfield these negotiations proved fruitless.

From 2009, Etete reentered negotiations with Shell, now in conjunction with the Italian oil company Eni. Etete worked closely with President Goodluck Jonathan and with Justice Minister Mohamed Adoke. The three men knew each other well: prior to his career in politics, Jonathan had been a teacher and gave private lessons to Etete’s children. Adoke is reported by middleman Ednan Agaev when interviewed by the FBI to have served as a lawyer to Etete in a previous life. Mr Adoke in a reaction via his lawyer denies he ever was.

Finally, on April 29, 2011, several agreements were signed between the Nigerian government, Malabu, Shell and Eni, and 1,3 billion dollars was paid for OPL 245. Of that amount, no more than 210 million dollars went to the Nigerian state. The remainder, 1,092 billion dollars, was deposited by the Nigerian government into various accounts, all of which were controlled by Etete. 523 million dollars was funnelled through to several companies owned by Aliyu Abubakar, known in Nigeria as ‘Mr. Corruption’ and resident of a colossal white palace in Abuja. According to Italian researchers, he made sure that Eni’s top men received their kickbacks and took care of diverting money to Nigerian politicians such as former ministers Adoke and Bayo Ojo. Part of the money was exchanged in local Naira’s and literally carried out in duffel bags. The file that Vrij Nederland received, contains a flow chart that shows what was purchased with the money: office buildings in Nigeria’s capital Abuja, a shopping mall in Dubai, five Mercedes C-Class cars, two Range Rovers and three Chevrolet buses, an armored Cadillac and a Global Jet Bombardier Vision 6000 worth 56,7 million dollars.

Conspiracy

In Nigeria – where current President Muhammadu Buhari has launched a campaign against corruption – attempts are made to recover any funds that are still traceable. In Britain for example, a legal case regarding a frozen account of 85 million dollars – part of the money Shell and Eni paid Malabu –  is ongoing. The state of Nigeria claims that there is ‘a conspiracy’ to withhold money that is legally theirs. Etete received state property illegally as a public servant and the agreements that Shell and Eni entered into in 2011 were no more than ‘a cover’ for money ‘that was diverted’ to Etete.

Lawsuits against Etete, Adoke and others have been filed in Nigeria for corruption and money laundering. The only person yet to be prosecuted is former President Goodluck Jonathan, although according to the Italian investigation, it is clear that Mr. Corruption Aliyu Abubakar served as Jonathan’s puppet.

Charges were also brought against Shell and its former country director for Nigeria Ralph Wetzels, for ‘fraudulently providing 801 million dollars’ to Etete. According to the Nigerian prosecutor, the company and Wetzels are guilty of ‘conspiracy to commit corruption’.

A Blind Eye

The case started gaining traction because intermediaries who negotiated with Shell and ENI on behalf of Dan Etete were not paid. On May 21, 2013, former Russian ambassador Ednan Agaev provided a statement to the FBI in the United States which can be found in the obtained file. It offers a nice glimpse into the inner circles of Nigeria, where everybody knows each other and jobs are divided amongst them. During his time as an ambassador in Colombia, Agaev was introduced to Nigerian President Obasanjo, who was there for a visit. A friendship developed, and Agaev also encountered security adviser and former Minister of Defense general Aliyu Gusau, who has been a spider in Nigeria’s web for years.

It was Gusau who asked Agaev, now a lawyer in Moscow, whether he would negotiate with Shell on OPL 245 on behalf of Etete. According to Agaev, Etete had agreed that Agaev would receive 65 million euro for his consultancy work. However, after the deal was closed on April 29, 2011, Etete announced that there would be no money left because Nigerian politicians needed to be paid off first. Agaev was not amused and started an arbitration case in the US. He told his interrogators that he conducted negotiations with Shell and Eni representatives on behalf of Etete several times between 2009 and 2011. Soon, it became clear to him that Peter Robinson, vice president of Sub-Saharan Africa for Shell, ‘hated Etete and did not trust him’.

Agaev concluded that a deal would never be achieved without mediation by the Nigerian government. At that point, Etete asked the Nigerian Minister of Justice Mohammed Adoke for help. ‘Etete wanted to sell OPL 245 and asked Adoke whether the Nigerian state wanted to act as a buffer between him and Shell and Eni,’ said Agaev. On the Nigerian side, a coalition was formed that could result in a breakthrough. Problem was that at Shell, but more so at Eni (more on this later on) there were objections against Etete. In light of his reputation, they preferred not to do any direct business with him, according to Agaev. He therefore suggested to transfer the money to the Nigerian government through a third party bank account. Nigerian officials would subsequently funnel the money to Etete. And that’s exactly what happened.

When asked whether Shell could have known that the money would end up with Malabu and Etete via the Nigerian government, Agaev told his FBI interrogators: ‘Of course, they knew. Shell did not want to do business directly with Etete, but felt comfortable with a money transfer to a Nigerian government account. Top management at Shell looked the other way and did not want any contact with Etete’.

A Ten Million Dollar Bribe

Another agent, Nigerian businessman Emeka Obi, was introduced by Agaev in Etete’s colossal villa in Abuja in December 2009. Obi claimed that he had been promised 215 million dollars, but he never actually saw a penny of that. In 2013, Obi filed a case in London which uncovered many details. Obi revealed for example that he had made arrangements with people at Eni to divert millions of dollars in kickbacks back to Italy. This accusation was repeated by the Italian prosecutors who claim that Eni’s CEO, Claudio Descalzi, as well as other Eni officials, were in on the plot.

In July 2014, Italian investigators spoke to Eni manager Vincenzo Armanna about Obi and kickbacks: the corruption money paid to Etete that, as agreed, would be paid back to particular employees at Eni. According to the Italian prosecutors, 50 million dollars was delivered to Roberto Casula, director of Eni in Nigeria. Armanna said that Obi was viewed in Nigeria as ‘the man who would receive  200 million dollars’ to pay out kickbacks to the Eni employees. Armanna felt uncomfortable about that, ‘I realized I was at risk,’ he said to his interrogators. He also told him that he had talked about corrupt practices with Nike Olafimihan, head of Shell Nigeria’s Legal Department. ‘You cannot get the 200 million dollars that way,’ she had said according to Armanna. ‘If you want to go ahead with this, you will have go about it differently and do not expect us at Shell to pay.’ Armanna added that Olafimihan was probably so well-informed because she is related to former Attorney General and Minister of Justice Bayo Ojo, who is currently being prosecuted for receiving 10 million dollars in bribes. According to Armanna’s statement, an Eni employee openly spoke to a Shell lawyer about potential corruption, and this was never reported internally as far as can be concluded from the e-mails in the file.

The trial in London attracted scrutiny of organizations such as Global Witness and the Italian Re:Common. They made enquiries with Shell and Eni, and reported corrupt conduct to the Italian justice department.

Mrs. E.

In the early morning of 17 February 2016, thirty tax authority investigators together with thirty Italian colleagues raided the Shell headquarters at the request of the Italian prosecutor. In the directors’ offices, 1800 pages of documents and e-mails were seized.

These e-mails were already widely quoted in a report of the Global Witness organization and in articles by Buzzfeed, the Italian newspaper Il Sole 24 Ore and The New York Times, amongst others. The perception that emerged from these publications was damning. According to the e-mails, Shell was very much aware that Etete was corrupt. The ex-oil minister had a vested interest in an agreement because he had ‘a wide range of stakeholders with whom he had to settle’, according to a Nigeria-based Shell employee who ended his e-mail on the remark that OPL 245 was a ‘big apple’ which they ‘could not afford to lose’.

Former MI6 employee John Copleston, who was hired by Shell, reported on January 5, 2009 that he had spoken to ‘my Delta Man’, a local source. They had been informed by Etete’s wife that of the 300 million dollars promised, her husband could only keep 40 million: ‘the remainder was needed to pay people off’. Copleston wrote that ‘significant revenue would flow to GLJ (Goodluck Jonathan)’.

He also wrote that ‘it will be very difficult to meet the chief’s expectations on the amount of cash that Shell will be able to put on the table. (…) Peter (Peter Robinson, at that time vice president of Shell Africa), should talk to The Hague and come back with a number’. Copleston stressed that the personal relationships were good. ‘Lots of lunches and lots of chilled champagne,’ he wrote. ‘This time we are negotiating face to face, a major improvement compared to talking via intermediaries.’

Wiretapped

On the day of the raid on Shell’s offices, the company’s CEO Ben van Beurden’s phone was wiretapped by Dutch police. In a leaked conversation with CFO Simon Henry, he mentioned ‘unhelpful e-mails’ from Copleston, who speculated ‘who would get paid what’. Van Beurden chalked up the conversations as ‘pub talk’, which he called ‘foolish’. He also decided that it would be better if the raid would not be reported to shareholders. ‘The last thing you want is a request to make an announcement to the stock exchange when there is nothing more to report than that we were asked to provide information’. He instructed CFO Henry to ‘not voluntarily say anything other than what’s being asked’ to the authorities.

To groups like Global Witness and reporters, Shell could no longer continue to deny that it had been negotiating directly with Etete. On April 10 of this year, a spokesperson stated in The New York Times that ‘over time, it became clear to us that Etete was involved with Malabu and that an agreement was the only way to resolve the deadlock situation, whether we liked it or not’. The spokesperson also said that Shell was aware that the Nigerian government would compensate Malabu. A fine example of damage control, but still not the full story. From the thousands of e-mails that the Dutch tax authorities shared with their Italian colleagues, it became clear that Shell lawyers and other employees actively worked towards a deal in which Etete would be the final recipient of the millions. The brains behind that agreement with Etete were based at the headquarters in The Hague. There they were more concerned with other oil companies chasing ‘big apple’ OPL 245 than with doing business in an ethical manner. ‘We need to act soon because the vultures are circling,’ wrote Shell’s number three Malcolm Brinded on October 11, 2010, to Peter Robinson, Director of Sub-Saharan Africa.

Money Laundering

Shell employees were obviously well aware that their payments would end up in corrupt hands. How then is it possible that Shell, a company that prides itself on compliance to business principles and anti-corruption codes, still ends up doing business with a man like Etete? The file that Vrij Nederland had access to shows that Shell employees had long been aware that it involved major risks. On June 16, 2004 – Shell and Etete were involved in a legal conflict about OPL 245 at the time – lawyer Guus Klusener, who was stationed in Nigeria, wrote in an e-mail under the header ‘privileged and confidential’ that Etete and other Malabu stakeholders were the subject of international investigations into ‘money laundering and other illegal activities’. Klusener warned that doing business with a company like Malabu ‘could lead to serious issues with our own business principle’.

In November 2007, a French judge sentenced Dan Etete in absentia to a three-year imprisonment and a fine of 300.000 euros for money laundering. His faltering reputation did not prompt Shell to withdraw itself from negotiations.

One of the major issues in Malabu’s business relationships was that the deeds filed with the Chamber of Commerce in Nigeria did not clarify who held ownership. Documents were missing and false names were used. Who were Shell and Eni doing business with?

That inadequate paperwork could lead to problems, became apparent in January 2011 when Mohammed Abacha, son of dictator Abacha and former Malabu shareholder, suddenly surfaced. He wanted a share of the profit, saying he had been removed from Malabu illegally by Etete, and filed a lawsuit. ‘It could cause additional reputation damage if his name starts getting out there,’ wrote CFO Henry Simon on January 21, 2011. Once again, no concern about the deal as such but concern about reputation damage.

Into State Treasury

What is striking in the e-mail exchanges between Shell lawyers and Shell top officials in both the Netherlands and Nigeria is that it appears that thorough research into how Malabu operated and who Etete was exactly had never been conducted, which based on their own code of conduct should certainly have taken place. In an undated document titled ‘due diligence Malabu’, the first sentence explicitly states that the due diligence is limited to establishing who owns the company, nothing more than an investigation at the local Chamber of Commerce. Nowhere in the document, nor in the hundreds of e-mails the necessity for an assessment of the risks of corrupt practices is mentioned. The legality of a deal with Malabu under Nigerian law is never questioned. After all, any proceeds from oil sales must flow back into the state treasury. Should Shell not have considered how it had been possible that Etete became the owner of OPL 245 during his ministership? An issue that should have become even more pointed when, in October 2009, presidential adviser Emmanuel Egbogah stated in a conversation to Shell employees that ‘it was shameful to the Nigerian government that a minister had assigned a block to himself’?

Shell’s behavior is all the more striking because the company was already under enhanced control by US authorities because of another Nigerian corruption case. Therefore, extra caution was required. On 29 December 2010, lawyer Keith Ruddock wrote that in the light of the enhanced control, it would be wise to fully inform Peter Rees (at the time Shell’s highest legal man) after his return from vacation ‘to make sure he is fully on board’.

Alternative Structure

Where Shell was mainly trying to find a way to conduct business with Etete and Malabu, the situation was different at Italian oil company Eni. A ‘chronology of events’ report put together in August 2011, after the deal was conducted, shows that Eni’s anti-corruption department intervened repeatedly. On November 17, 2010, the unit reported that if Dan Etete indeed proved to be the owner, ‘an image issue could arise’. Concerns at ENI grew even greater when the son of dictator Abacha become involved in January 2011.

They came up with a solution to that at Shell. Peter Robinson reported to have worked out an alternative structure which amounted to a two-stage strategy previously suggested by adviser Ednan Agaev: a payment to the Nigerian state, which would then be forwarded to Malabu/Etete. An approval by the management in The Hague soon followed. ‘I can confirm that the proposal has the support of Peter Voser, Simon (Henry) and Peter Rees,’ Malcolm Brinded wrote on January 22, 2011.

Eni had yet to be convinced. ‘Yesterday, Peter (Robinson, Vice President of Shell Sub-Saharan Africa) and I spoke at length with Roberto (Casula, Eni Director in Nigeria), mainly discussing OPL 245,’ wrote German Burmeister of Shell Nigeria in an e-mail on March 12, 2011, six weeks before the deal came through. According to Burmeister, Casula said that the uncertainties about Malabu’s paperwork had led to an ‘exacerbated negative effect’ in the ‘risk perception of the entire transaction’. It was Eni’s ‘hottest topic’, he reported back to The Hague.

Eventually Eni came around. On March 31, 2011, Shell Director Peter Robinson wrote from Nigeria to his colleagues that ‘indeed the change in ENI in the last 24 hours has been profound’. A guarantee that ‘an agreement could be reached by the following morning’ was provided. Four days later, Shell lawyer Guus Klusener reported that Eni had decided ‘to leave it up to Shell’ to resolve the issues with the Nigerian government and Malabu.

Things proceeded quickly after that. The file contains an interrogation report of Mr. Corruption Aliyu Abubakar, in which he says that ‘sometime in 2011′, which must have been a meeting on April 14 mentioned in Shell e-mails, a conversation took place in Dan Etete’s villa in Lagos. He describes that ‘eleven white people’ from Shell and ‘five white people from Eni’ were present, in addition to Minister of Justice Mohamed Adoke and Malabu Representatives. ‘An agreement was made to conduct payments via the Nigerian state because of suspicion and disagreement between Malabu on one side and Shell and Eni on the other side.’ Mr. Adoke denies he was present at the meeting in mr. Etete’s private house and states that all meetings were ‘in the presence of all parties and their counsels and were in his office at the Federal Ministry of Justice and nowhere else.

The meeting concluded matters. Peter Robinson wrote that all parties initialed the various documents, including Malabu representatives. During the closing remarks, Robinson complimented ‘our legal department’ on its ‘fantastic work’. This is rather ironic, as all that Shell’s legal department had done was to bend over backwards to create a paper reality after warning against precisely that, in order to close a deal which greatly undermined their own business principles.

Unlawful Practices

In February of this year, prosecutor De Pasquale filed a request for prosecution of Shell and Eni on charges of corrupt practices at the Italian court. He states that 1.1 billion dollars made its way to Dan Etete illegally, who then paid bribes to President Goodluck Jonathan, Minister of Oil Diezani Alison-Madueke and Minister of Justice Mohammed Adoke. Additionally, 50 million dollars in kickbacks were paid to Eni and Shell employees. According to De Pasquale, Eni as a company as well as eleven individual employees including CEO Claudio Descalzi should be prosecuted.

Shell will be on trial, as well as former MI6 agents John Copleston and Guy Colegate, and former directors Peter Robinson and Malcolm Brinded. The latter has recently stepped down from his new employer Billiton ‘due to the ongoing judicial investigations in Italy’. However, Brinded is still chairman of the Shell Foundation. Whether actual proceedings will be brought forward is to be decided by a judge.

Meanwhile, a lawsuit against Shell and former director of Shell Nigeria Ralph Wetzels has started in Nigeria (but has been postponed, because the defendants have not shown up, eds.). Former Minister of Justice Mohammed Adoke is reported to have fled. But Adoke himself states that he is not a fugitive from Justice, that he is innocent and acted in the best interest of the country. Dan Etete is also at large, allegedly living in Dubai. In January of this year, a Nigerian judge ordered Shell and Eni to temporarily return the rights to OPL 245 exploitation to the Nigerian government. Research collective HEDA Resource Centre started a petition in Nigeria to permanently retract the exploitation license from Shell and Eni.

‘Research has shown that Etete obtained OPL 245 illegally. And Shell and Eni moved forward into an agreement with him being fully aware of this fact,’ states Suraju Olanrewaju of the Heda Resource Centre. ‘Nigeria’s oil wealth should not be reserved for the lucky few, it should benefit the entire Nigerian people.’ Olanrewaju calls on the Dutch authorities to prosecute Shell. ‘We expect an in-depth investigation and subsequent prosecution from The Netherlands, where Shell is headquartered. Currently, an investigation is under way at the Public Prosecutor’s Office. According to a spokesperson, as soon as it reaches conclusion, a decision on whether to prosecute will be made.

Shell has responded to questions by stating that they are unable to comment while matters are under investigation.

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