While there are plenty of domestic fraud incidents within our borders, such corruption is not exclusive to the U.S. The international community deals with these crimes just as frequently at all government and corporate levels. Many times, forensic audit services are necessary to determine the extent of the fraud and bring the responsible parties to justice. On March 12, 2014, Nigerian President Goodluck Jonathan did just that: in response to public outcry, he directed an audit of the Nigeria National Petroleum Corporation (NNPC) to address an estimated $20 billion in missing state revenues.
The Allegations
In September 2013, Central Bank Governor, Lamido Sanusi drafted a letter to President Jonathan containing specific allegations that justify forensic audit services:
- Up to $50 billion in oil export revenues had not been deposited into the federation account;
- The amounts date from January 2012 through July 2013;
- The NNPC was holding profits during the period in order to pay for subsidies it was entitled to for gasoline and kerosene imports, despite the fact that President Umaru Yar’Adua had eliminated kerosene subsidies in 2009; and,
- These actions were a clear violation of national law.
The NNPC Responds
Chair of the NNPC and Nigerian Petroleum Minister, Diezani Alison-Madueke, admitted that the subsidies were paid to the NNPC in violation of the law, but stated that the action was to protect against hardship for millions of suffering, poverty-stricken Nigerians. He asserted that the NNPC purchases kerosene at $.91 US per liter and sells it to network suppliers at one third of that price.
Sanusi maintains, however, that the retail price of kerosene is well above $.91 US and that selling at the lower cost only benefits a cartel of chosen friends in the industry, not poor Nigerians. President Jonathan has since removed him from his position at the Central Bank.
Politically Motivated?
Though President Jonathan claims that Sanusi’s suspension was due to “gross misconduct” and “financial recklessness” at the Central Bank, public sentiment and sources within the Nigerian government assert that the action was political in nature. Jonathan rejected the opinion, stating that the removal was unrelated to Sanusi’s “unproven and inconsistent claim” about the misdirected kerosene subsidies.
The NNPC has rebuffed Sanusi’s claims and contended that the President’s actions are unfounded, but will agree to retain a forensic audit services agency. Senator Bukola Saraki, who sits on the committee investigating Sanusi’s claims, suggests a more aggressive approach: “The minister of petroleum and of finance admitted there is no subsidy on kerosene. Do we need to wait for a forensic audit for the government to stop breaking the law?”
Rippling Effects
The dramatic circumstances surrounding Sanusi’s removal have effects beyond the immediate crisis.
- Just a year away from what’s expected to be the most highly contentious presidential election since 1998, opponents of President Jonathan allege that Sanusi’s suspension demonstrates an unwillingness to confront corruption.
- Due to Sanusi’s status as an internationally respected head of the Central Bank, the Nigerian Naira currency dropped to a record low.
President Jonathan maintains that he is committed to full transparency, openness and accountability in governmental affairs, and has authorized the services of reputable international firms for the recommended forensic audit of NNPC accounts.
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Veriti Consulting LLC provides professional, certified forensic accounting services across the U.S. Veriti is also a licensed private investigation agency. Learn more about our forensic accounting services by calling 855.232.4410 or contact us via email.
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