Fayose: Profile of Corruption Tell Magazine, Nigeria Tell Magazine reports in detail how the Governor Ayo Fayose looted Ekiti State. In a quintessential illustration of the EFCC boss, Nuhu Ribadus description of how governors are impoverishing their own people, this is a classic example of the kind of political leadership Nigeria cannot afford. For about two months, Ayodele Fayose, governor of Ekiti State, had been a very happy man. The governor, who has moved from one controversy to the other since he came to power in 2003, had reasons to be happy. While on a state visit to Ekiti State last May, President Olusegun Obasanjo had virtually anointed Fayose as a “worthy son”. Raising up the governor’s hand in the crowd, the President advised his opponents and critics to sheathe their swords and join him in the development of the state. To cap it all, the President sang a song in Yoruba: Omo ko le jo baba ki a ma binu omo…,meaning that a child should not be blamed for taking after his father. Invariably, Obasanjo anointed Fayose as a political son. That presidential endorsement thrilled Fayose to no end. Ayo Fayose, Governor Ekiti StateOf even more significance to Fayose was the confidence reposed in him when he was appointed to head the forum of governors mandated to seek a successor to Obasanjo from among the state chief executives of the PDP-controlled states. Fayose felt that the assignment was of utmost importance and that his headship of the forum was a recognition of his political astuteness and intelligence. Again, he was over the moon. And he has been for quite a while. But Fayose was, last week, brought back to earth and to the realities of governance and politics in Ekiti State following the arrest of two people — a friend and contractor to the state government who had been embroiled in a contract scam, and a special assistant to the governor. The governor is said to have become very worried about the arrest of the two men. The friend, Gbenga James, was arrested about two weeks ago, while Goke Olatunji, the governor’s aide, was arrested last Monday for alleged involvement in what many believe is the failed Ekiti State Integrated Poultry Scheme for which over N1.4 billion has been paid without commensurate work done. Fayose is alleged to have colluded with James to collect the money ostensibly meant for the poultry project, but, rather than execute it fully, they allegedly diverted most of the money to personal use and went on a spending binge. But the poultry scam is only one of the several investigations concerning Fayose. The President’s anointed son is also being investigated for allegedly bribing Ekiti State legislators to impeach his former deputy, diversion of public funds, using the dualisation of the Ado–Ikere and Ado-Ekiti township roads to siphon money, among other allegations. The story of the poultry saga alone is a treatise on executive recklessness and lawlessness, and wanton abuse of office. It all started in early 2004 when James, an agriculturist and managing director of Biological Concepts Limited, who is also a long-standing friend of Fayose, brought him a proposal for the establishment of an integrated poultry project in the state. The original proposal was for the building of four poultry farms in four centres in the state with the project headquarters in Afao, the governor’s hometown. The project was to cost N400 million but, according to James’ proposal, the state government was to commit N100 million while Biological Concept was to contribute N300 million through a loan of same amount from Wema Bank. Furthermore, a profit-sharing arrangement was proposed which would give Biological Concepts 70 per cent and Ekiti State government 30 per cent of profits. Ordinarily a beautiful business proposition some might say. But the project has not turned out beautifully. What really happened? James said that the governor expanded the scope of the project so that, instead of just the four poultry farms in four locations in the state, he asked that James include a proposal for one poultry farm in each of the 16 local government areas of the state. This too was to cost N400 million at N25 million each. Each local government council was expected to pay the N25 million. Although he was a contractor to the project, it was agreed that he would collect a consultancy fee of 15 per cent, amounting to N60 million, on the local government poultry project. But there were several snags to the implementation of the proposal. First, there was no provision for a poultry project in the budget of the state for 2004. Secondly, without requisite collateral, Biological Concepts was not able to secure the loan from Wema Bank but the governor decided to undertake the project with state funds even though the profit-sharing arrangement would still give James’ company a 70 per cent share of profits. He went ahead to secure the N300 million in the name of the state government. In March 2004, just a couple of weeks after James submitted his proposal, Fayose approved the payment of N400 million to Biological Concepts to start executing the project. On April 22, 2004, Biological Concepts was issued a Standard Trust Bank cheque of N340 million, representing N280 million mobilisation fee and N60 million consultancy fee. Of course, there were many things wrong with the payment. First, the expenditure was not appropriated. Second, the whole contract award set aside all due process as it was neither advertised for competitive bidding nor allowed to go through the tenders’ board as required by law. Furthermore, at the time of making the first payment, there was no contractual agreement between the state government and Biological Concepts. It was just a “paddy–paddy” arrangement between the governor and James. It was in September 2004, when queries started being raised about the whole matter, that the government now entered into an agreement with the company. What is more, the governor was said to have illegally authorised the money to be paid from the Local Governments’ Joint Account even though none of the councils had appropriated money for a poultry project. Also, it was discovered that no tax was deducted from all monies paid to Biological Concepts. All these happened in spite of warnings and queries raised by three people: Abiodun Aluko, the former deputy governor, the auditor-general of the state and the secretary to the state tenders board. For example, when the deputy governor got a directive from Fayose to release N400 million from the Local Government Joint Account to Biological Concepts as mobilisation fee, Aluko had written the governor warning of the consequences of not following due process. In the memo dated March 12, 2004, Aluko observed that the company was unknown to the state government as it had not previously done any job in the state to warrant the release of money to it. The auditor-general then detailed the due process which the company needed to go through before funds could be released to it. These included the writing of a proposal stating the scope of the work and attaching a bill of quantities, appraisal of the proposal and auditing of quotations by state officials, vetting of the contract by the state tenders board and, finally, award of the contract. Aluko ended his warning memo thus: “For future reasons, these statutory procedures should be adhered to strictly to avoid being accused of collusion to defraud the government as the sum of N400 million is too high to be released to a private company without going through all this statutory documentation”. But, curiously, Aluko later recommended the company for payments due to it later. Although it is believed that about N1.4 billion has so far been spent on the ill–fated poultry project by Fayose, TELL investigations could only confirm the payment of N855 million to Biological Concepts. The payments were made between April 22, 2004 and October 5, 2005. An indication of the fact that Fayose and James possibly planned to use the poultry scheme as a conduit for siphoning state funds emerged as soon as James got the N340 million cheque from the state government. On April 22, 2004, the same day that the cheque was paid into Biological Concepts account, even without mobilising to site, James withdrew N55 million from the money. Interestingly, his company’s account was in the red to the tune of N58 million by the time the money was paid. This amount was deducted by the bank as soon as the account was credited. But it was gathered that the Economic and Financial Crimes Commission, EFCC, has since told the bank to pay back the money as it belonged to Ekiti State and not Biological Concepts. A week later, James transferred another N20 million into the account of Avian Specialists, another company he owns. In all, he was discovered to have transferred nearly N200 million from the Ekiti poultry fund into Avian Specialists account. James said that they were all loans. Then on May 10, the contractor opened a letter of credit of N156 million in favour of Avian Specialists for the importation of cages and drinkers from India. In the official papers, James claimed that the imports were for the Ekiti poultry project but, when the items came, he sold most of them to the public and sent the remaining to a farm he owns in Ibadan. With a large fortune chest at his disposal, James descended on markets in Nigeria and abroad and went on a spending spree buying exotic cars and property as well as turning his farm into hi-tech automated one. But James was just a small actor in the looting drama. The real protagonist was Fayose, according to the EFCC. Investigations revealed that Fayose also got a tangible part of the loot for himself. In fact, James told investigators that the reason why the poultry project had been stalled was because “Governor Fayose is greedy” and wanted to take all the money meant for the project for himself. First, the agriculturist said the governor had creamed off N96 million from the N400 million meant for the local governments’ poultry scheme. He said that what he actually proposed was that the scheme would cost was N14 million per local government but that the governor told him to inflate it to N25 million. From the N11 million extra, the governor was to take N6 million while he would take N5 million. In all, Fayose allegedly got N96 million from the N400 million meant for the local governments’ poultry project. It was also discovered that James originally put the cost of the four centres to be headquatered at Afao at N56 million, but the governor told him to inflate it to N300 million. Thus, N244 million was allegedly shared between them. Fayose also allegedly got another N17 million which he asked to be changed into foreign currency. Of the amount, N7 million was changed into $50,000 and allegedly handed over to Abiodun Olujimi, then a member of the House of Representatives but now deputy governor of Ekiti State, to give to the governor. Olujimi collected the money from James’ secretary and signed for it on April 29, 2004, just a week after the contractor was mobilised. Originally, when James was questioned about the money earlier in the year, he lied that he gave the money to one Tunde Oshinowo to help him purchase a property, but when Oshinowo denied any knowledge of the money, James confessed that he gave it to Fayose through Olujimi. The remaining N10 million was also changed into £37,000 and given to Olatunji to pass on to Fayose. The governor was said to have actually gone to James’ office in Ibadan but stayed outside while he sent Olatunji upstairs to collect the money. Besides money allegedly collected by the governor himself or through friends and aides, Fayose also allegedly directed part of the poultry funds to be used for some personal things. For example, James said that he paid N39 million for the building of a house for the governor in Iyaganku GRA, Ibadan, Oyo State. The architect who designed the house confirmed to investigators that not only did he receive the money, he was also given N2 million personally by Fayose for the finishing job in the house apart from another N1.2 million he got for the architectural design of the house. However, as if the loot was limitless, others who worked for or were close to the governor also benefited from the largesse from Ekiti State. For starters, James claimed that he paid several millions of naira to many civil servants in Ekiti State as PR. For Example, Kayode Osho, the commissioner for finance, and Boboye Olanipekun, the commissioner for agriculture, at different times, got sums ranging from N250,000 to N1.5 million while Aluko, the former deputy governor, was allegedly paid N7 million. Other civil servants who allegedly benefited from the loot, according to records scrupulously kept by James, include the attorney-general, the state’s paymaster, accountant-general, permanent secretaries, director of building, surveyors and Olatunji, among several others. James claimed that he bought 20 units of air conditioners for Osho and the chairman of the next
Posted on: Wed, 26 Mar 2014 22:43:45 +0000
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