Monday, June 12, 2000
Washington, DC, USA
Intricate details of the $4.5 billion debt buy back scheme of the Babangida administration came into the open over the weekend in Washington DC as the main foreign partner of the then military administration conceded that the scheme was shrouded in secrecy as alleged by Mr John Fashanu. Fashanu had compiled a lengthy report on the buy back scheme that he said was a scam by the Babangida administration.
Bu the foreign partner, an American, Mr. Bob Minton , who among with two others bought back the debts and resold to Nigeria between 1988 and 1993 contended that if the scheme was not secret, the deal would not have been worth it as the price of the debt will go up if it was done in the open market.
Indeed Minton said by now publicly disclosing the contents of the deal he was violating the terms of agreement between them and the then Nigerian Government and the CBN to keep the transaction secret. But he justified this so as to clear his own name, stressing that he was also prepared to testify before the Nigerian senate if called upon to do so.
Minton spoke on Sunday evening in DC at a forum organized by the Prof.Bolaji Aluko -led Washington DC - based Nigerian Democratic Movement (NDM) at the Howard University in Washington where Aluko is Chairman of the Chemical Engineering Department. But Mr. John Fashanu who was also billed to attend the forum with his investigator, Canada based Robert Clarke, to confront Minton on the deal was absent at the forum, which clearly took the organizers of the forum and others present aback. The forum was designed as a confrontation between Fashanu and those he accused of embezzling Nigerian funds through the buy back.
Minton a stockily- built Caucasian who came to the venue of the forum with packets of files and his personal staff said he had nothing to hide denying that his accounts were not frozen anywhere as alleged by the Fashanu report. He called for an independent auditing firm to come and audit the transactions. But he was buffeted by members of the audience on questions regarding the propriety of the buy back scheme, especially regarding whether such a scheme made in secret was the best option for Nigeria. Or if such secrecy was in line with an open market standard and fair public bidding process. Minton said it was the decision of the Nigerian government to enter into the deal and not his. But that he was pleased to provide the service to Nigeria.He however said he will not go into such a deal again because he is now concerned in his life with other things apart from making money.
According to him what he and his 2 other partners did, for which they made $45m in 5 years, was to buy back the said debts some of which were already being sold at secondary markets. They then resell to Nigeria, in that way reducing the debt load of Nigeria at the time. Minton said in his opening remarks b4 he began to field questions from the audience with Aluko moderating that some of the debts were being written off already by the creditors b4 the buy back scheme began. He added however that if Nigeria continued then to ignore the debts it would lead to difficulty in securing credits and possible seizure of Nigerian property abroad.
In all Minton who named his other partners in the deal as Jeff Schmidt and Celine Louis said they bout 3 levels of Nigerian debts between 1988 and 1993.these were $1.1 billion in CBN promissory notes, $3billion in FG public debts and $464m in multilateral debts. Asked if he knew these debts to be genuine Minton who spoke and took questions from Nigerian and Americans at the forum for close to 2 hours said the public debts were simply designated as general-purpose loans. He said he knew that some of CBN's promissory notes were litigated upon and some were cancelled but that those they bought were valid.
Minton added that he and his partners under the business name of Greenland Holdings held, (during the deal that lasted 5 years) a total of $2.8 billion Nigerian money. The break down of which is; Reserves-$1.1, Buyback proceeds $1.2 billion, $60 million from NNPC and $464 million in interests that Nigeria was paying while they bought the debts.
On the expenditure side Minton disclosed that they spent $1.5 billion on the debt purchase and another $1.2 billion on buyback proceeds to the CBN. Buyback interests to CBN was also put at $3.5 million. Other expenditures were $4.5 million Bank debt holding fees, $3.7 million bank debt exit fees, $14 million in payments to the NNPC, $60 million in promissory notes repurchase from NNPC, $138,688 in interest paid to NNPC and $658,278 transfer to Federal Government of Nigeria.
Minton said if the CBN figures are different from his own he could not say but that he is confident that his figures are accurate. He put the cash at hand at the end of the deal at 0. But the total of the expenditure side was put also put at $2.8 like the income side. He added that unlike what the Fashanu report suggested that they bought the Nigerian debts at 20cents on a dollar and sold for 60cents,that Nigeria actually paid 34cents on a dollar. Minton contrasted their own buy back deal with the one under the Abacha regime where he said Abacha's son bought the Ajaokuta debt for 20cents and sold for 60 cents on a dollar. According to Minton "that was a scam"
In trying to defend his involvement in the deal Minton said he did not do anything criminal as Nigerian Lawyers in New York had already given clearance for the buy back. But he said the deal was indeed not in the spirit of the loan agreements that Nigeria entered into with the creditor banks.
But he said they offered Nigeria the best deal on the buyback. He disclosed that the CBN were then unwilling to deal with Citibank of New York for the buy back. This was because of a previous debt sale involving Citibank and Ecuador where Citibank had to seize Ecuador's property. He said his partner Jeff Schmidt whom he said had met Babangida while he was in power was the one who was always in Nigeria during the deal serving as adviser to the FG. He said that Jeff Schmidt was still playing advisory role to Nigeria at this time.
Minton disclosed that Schmidt has had several years of relationships with powerful Nigerians who he said might include the current president.
Minton further revealed that while they were trying to enter into the deal, they were told that president Obasanjo who was then a known international figure had offered IBB to do the debt buy back instead of them. He said Obasanjo was reported to them as having asked for only 1% of the debt's face value. They eventually also offered to do the deal for the same 1% and got the business.
As to the steps he will take on the accusations leveled against him by the Fashanu report when asked, Minton said he has retained counsel in Nigeria, sued Fashanu in Italy and will also proceed to sue him in Germany and UK.
Minton has said in his opening remarks that he knew that both Babangida and Abacha looted Nigeria's money. However when asked if he will give more information he said he had none besides knowing that it was the practice in Nigeria then for leaders to steal money. The exception he said was that in his own estimation "What Babangida stole was within acceptable limits but Abacha was stealing everything and stepping on toes everywhere" He added that his partner Jeff Schmidt who he said was still doing business with the CBN had told him that IBB would be prepared to testify before the senate. His partner had also told him that IBB was supposed to call him recently but changed his mind when the heat on the buy back deal apparently mellowed. While speaking he kept referring to IBB's camp and when asked what he meant he said that was a phrase he heard from his partner Jeff Schmidt, who is still doing business with Nigeria at this time.
Minton condemned the Fashanu report and alleged that Fashanu was being used by the Church of Scientology with whom he has a 3 year old running battle (for which he said the church is investigating him for 3 years) over the church's alleged human right violations and murder of certain persons by the church which he is bringing to the open. Minton said that Fashanu does not know that he is being used by the Church of scientology which he said has also got in touch with the Nigerian Vice president who received the Church's leader in Abuja recently according to Minton.Minton said that visit was made possible by the OPEC Sec-Gen Alhaji Rilwanu Lukman whom he said is a member of the Church of Scientology. He alleged that Fashanu's private investigator who was also billed to attend Sunday's forum in DC Mr. Robert Clarke was a top notch of the Church of Scientology and is also known as David Lee.
Minton said the church of scientology cannot help Nigeria because all they want was to silence him in his crusade against the church. Members of the audience some of whom were international economists and scholars told Minton that such lending practices that was used to do the deal have infact been condemned by the Brentwoods institutions. He was also asked him if he had been in Nigeria before to see the condition of the Nigerian people from whose govt he made $45 million in four years, but Minton said it was his partner Jeff Schimdt who was always going to Nigeria. He was also asked where was he when Nigeria was also experiencing dire human rights violation under the military like that of IBB with whom he was involved in this buy back deal. Minton said that he has a sense of obligation to help Nigeria and that his partner Jeff Schmidt has a scholarship fund for Nigerians to come to college in the US and that he also contributes to that fund.
Those present at the forum included Mr George Noah, a London based journalist who has been involved in widely reporting the Fashanu report, Mrs Chris Anyanwu, Dr Nwankwo, Dr Gbadegesin of the Howard University, Mr Ademola Oyinlola of Tell. Professor Aluko's group also honored Mrs Anyanwu with a presentation of the NDM's first June 12 award for her "grace and courage in defence against tyranny". The forum was NDM's own celebration of the June 12 anniversary. Aluko said they wanted to bring issues involved in the buy back scheme into the open.He and George Noah led in questioning Minton.
In his comments Dr Nwankwo called for a commission to investigate the buyback,while Dr Gbadegesin argued against such but cautioned that no judgement can as yet be passed on the Fashanu report in spite of Minton's presentation saying such will not be fair for now.The Professor Aluko led NDM received wide commendations from the audience for organising the forum.