TOPICS > Economy

Corruption Case Exposes Scope of Bribery in Nigeria

April 24, 2009 at 6:40 PM EDT
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Last year, Albert Jack Stanley, the former CEO of KBR, pleaded guilty to bribery for masterminding the payment of more than $180 million to Nigerian officials. PBS Frontline correspondent Lowell Bergmen reports on the damage done by large-scale bribery in that country.
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JIM LEHRER: Next, another take on Western money in the developing world. International corruption has been the focus of a nine-month investigation by our PBS colleagues at Frontline. Correspondent Lowell Bergman has this special report produced for the NewsHour on the damage done by large-scale bribery in Nigeria.

LOWELL BERGMAN, correspondent, Frontline: Last September, in federal court in Houston, Texas, corporate America paid attention when this man, Albert “Jack” Stanley, pled guilty to bribery.

JOURNALIST: Jack, you don’t want to say anything?

LOWELL BERGMAN: Stanley, the former CEO of KBR, then a subsidiary of the Halliburton corporation, agreed to a record seven-year prison sentence for masterminding the payment of $180 million in bribes in Nigeria.

ATTORNEY: And Mr. Stanley’s been cooperating and cooperated today.

LOWELL BERGMAN: As a result, earlier this year, KBR and the Halliburton corporation agreed to pay more than $500 million in fines, the largest fine ever for international bribery by a U.S. company.

This case has opened a window into the way multinational corporations do business in corruption-plagued Nigeria.

The World Bank has reported that Nigeria has lost $300 billion over the last few decades due to corruption.

OLUSEGUN OBASANJO, Former President, Nigeria: I will not argue with them.

LOWELL BERGMAN: Three hundred billion disappeared…

OLUSEGUN OBASANJO: Over a period of years.

Corruption 'runs everything'

LOWELL BERGMAN: Olusegun Obasanjo was president of Nigeria from 1999 to 2007.

OLUSEGUN OBASANJO: Fighting corruption is like fighting a war in a battlefield.

LOWELL BERGMAN: A former Nigerian general, President Obasanjo is a founding member of the anti-corruption organization Transparency International.

Corruption, you would agree, is endemic in Nigeria?

OLUSEGUN OBASANJO: It is. Corruption is a cancer that must not be allowed to be in the body of a nation, because it destroys, and that is what we were fighting against in Nigeria.

LOWELL BERGMAN: In 2003, President Obasanjo appointed this man, Nuhu Ribadu, as Nigeria's first chief corruption hunter.

NUHU RIBADU, former Nigerian anti-corruption chief: We went after the very powerful people, the rich ones, those who hitherto were above the law. One of the governors, we think, he took close to about 75 percent of the resources of this state.

LOWELL BERGMAN: One governor took 75 percent of the money?

NUHU RIBADU: Yes.

LOWELL BERGMAN: From the state government?

NUHU RIBADU: And this is a state that has probably made over $1 billion, in terms of revenue. The governor diverted minimum 75 percent of that for himself alone.

LOWELL BERGMAN: While the people are living on $2 a day.

NUHU RIBADU: That's it. Corruption has taken over the engine of government in Nigeria. It's what runs everything.

LOWELL BERGMAN: The cost of this corruption is most evident here in the Niger Delta, the center of Nigeria's oil industry. But all that oil wealth does not reach the people, who live in abject poverty, with the land and water devastated by spills and the air poisoned by the constant burning of natural gas, called flaring.

All this, the consequence of out-of-control corruption.

And before you took office, no one, no company had been prosecuted in Nigeria...

NUHU RIBADU: Never.

LOWELL BERGMAN: ... for bribery.

NUHU RIBADU: Never.

LOWELL BERGMAN: And you come in, and you make how many cases?

NUHU RIBADU: Thousands. And then we got convictions, about 270-something.

LOWELL BERGMAN: Two-hundred-and-seventy-something convictions?

NUHU RIBADU: Yes, yes, yes, yes. World record, I believe, by any standard, yes.

Few traces inside Nigeria

LOWELL BERGMAN: Ribadu says he went out of his way to set an example. No one was immune.

You investigated your boss?

NUHU RIBADU: The inspector general of police, yes. I investigated him. I seized $150 million from him and sent him to prison.

LOWELL BERGMAN: And governors of some of the wealthiest state governments?

NUHU RIBADU: Several.

LOWELL BERGMAN: Didn't they try to bribe you?

NUHU RIBADU: Several times, several. And at one point, there was a particular incident where I was given $15 million cash.

LOWELL BERGMAN: You were given this money?

NUHU RIBADU: Directly. Former governor one of the Niger Delta states in Nigeria, he gave me cash, $15 million, in bags, two heavy, big, bags. And I used it as evidence against him.

LOWELL BERGMAN: But, Ribadu says, when it came to the really big payoffs, involving major multinational companies with bribes going to the top leadership of the country, he often felt powerless.

NUHU RIBADU: Most of this is happening outside Nigeria. The documents are not in Nigeria. The money is not in Nigeria. The entire transactions do take place outside. That is the difficulty I faced.

The big chief executives, they are not in Nigeria. The only time they go to Nigeria is to go and give somebody money.

LOWELL BERGMAN: Which is exactly what the U.S. Justice Department found when they began to investigate the Halliburton-KBR case as part of a crackdown on international bribery.

The bribery scheme began more than a decade ago, when KBR led a consortium of companies competing for the contract to build this massive $6 billion liquefied natural gas plant in the Niger Delta.

The KBR consortium, led by Jack Stanley, would pay $180 million in bribes to a succession of Nigeria's leaders to secure that contract.

PATRICK SMITH, editor, Africa Confidential: It's one of the few cases we've seen where you've got all the players in a complex international structure of fraud, and corruption, and self-enrichment.

Obasanjo denies taking bribes

LOWELL BERGMAN: Veteran journalist Patrick Smith has followed the case.

PATRICK SMITH: You see the sorts of things that corporate executives from the U.S. discussed. How much should I bribe a head of state? How much should I bribe the chief of the army? So you see the whole system laid bare.

LOWELL BERGMAN: The U.S. case reveals that, in the mid-1990s, the first bribes went to Nigeria's brutal strongman Sani Abacha who set a new standard for corruption.

NUHU RIBADU: His period was one of the darkest moments in the history of our country. We estimate that he took close to about $6 billion.

LOWELL BERGMAN: Six billion dollars?

NUHU RIBADU: Alone, single-handedly.

LOWELL BERGMAN: The bribes fueled Abacha's excessive lifestyle, and his unusual death would become a metaphor for greed.

PATRICK SMITH: The story is that he took an enormous amount of Viagra and then was entertained by a succession of prostitutes from around the world in one sort of marathon sex session. And after that, he was left a wreck on the floor, foaming at the mouth, and that's where he was found.

So there are various explanations. What was pretty clear was that the Nigerian elite, particularly his fellow generals, had decided they'd had enough of him, and a lot of people wanted Abacha dead.

LOWELL BERGMAN: But after Abacha died, Jack Stanley continued the bribery scheme. And because of his success in landing big contracts, Stanley was promoted to become CEO of KBR in 1998 by the man who was then running Halliburton, Dick Cheney.

Despite the fact that millions in bribes were paid while he was CEO, Cheney has always denied knowing anything about the bribery conspiracy. And so far, Jack Stanley, according to sources, has not directly implicated his former boss.

But Stanley has implicated former Nigerian President Obasanjo, who denies ever taking a bribe.

You have been able to resist the temptations then of your predecessors?

OLUSEGUN OBASANJO: Well, I have been -- I've been investigated and re-investigated and re-investigated, and nobody can find corruption around me.

LOWELL BERGMAN: Because you know your critics say you're just too smart.

OLUSEGUN OBASANJO: Well, if it is being too smart, then somebody who is smarter should have found something.

Money could have saved lives

LOWELL BERGMAN: In the interviews we've done and in the public documents that are now in file in the United States, it does indicate that there were meetings that took place while you were president.

OLUSEGUN OBASANJO: No, I won't say that meetings were not taking place. I have just told you that there were ministers in my own government that participated in corruption.

LOWELL BERGMAN: It reached to your vice president. It reached to people in your own political party

OLUSEGUN OBASANJO: I will not say no.

LOWELL BERGMAN: In fact, sources in the U.S. government say that Jack Stanley has revealed that he met face to face with then-President Obasanjo in 2001 about continuing the KBR bribery scheme.

Nuhu Ribadu says that, while he was unable to find any evidence implicating Obasanjo, he believes the Justice Department knows if the former president is, in fact, corrupt.

NUHU RIBADU: And they know exactly what happened. Hopefully, something will come out. I think it's only right and fair that the world know exactly what really happened and who are involved.

LOWELL BERGMAN: The real tragedy, Ribadu says, is that $180 million in bribes could have saved lives in Nigeria.

NUHU RIBADU: A hundred and eighty million dollars could build 100 hospitals. This $180 million could build 100 schools, probably will provide thousands of kilometers of roads by African standard.

LOWELL BERGMAN: Today, Ribadu is no longer hunting corruption in Nigeria. Soon after President Obasanjo left office, Ribadu himself was removed and became one of the hunted. He was chased down and shot at, but his bulletproof car saved his life.

NUHU RIBADU: I survived it. They wanted to kill me. If you fight corruption, it fights back. And I fought corruption in Nigeria. But I am lucky. I'm out.

LOWELL BERGMAN: They missed you.

NUHU RIBADU: Very lucky, for now.

LOWELL BERGMAN: He now lives in exile in the United Kingdom.

As for KBR's Jack Stanley, he admitted to not only arranging the bribes, but also diverting millions from the bribe money into his own personal Swiss bank account. Stanley's testimony in this case has already resulted in additional indictments, and more are expected.