Dirty Car Deal
By Demola Abimboye
Sunday, September 14, 2008
The House of Representatives is set to erupt in crisis over a N2.4 billion vehicles purchase scam involving its leaders
The House of Representatives is not new to scandals. It was one of such scandals which led to the fall of Patricia Etteh last October. Barely one year after, another scandal is threatening the position of Dimeji Bankole, speaker of the House who succeeded Etteh on November 1, 2007.
The new scam centres around the N2.4 billion car deal with Peugeot Automobile Nigeria Limited, PAN, Kaduna. The contract was approved on December 12, 2007, 42 days after Bankole became speaker. The fraud in it was, however, uncovered shortly before the legislators went on recess in early August 2008.
In political circles in Abuja, last week, enraged legislators discussed the vexed issue in hushed tones. They told Newswatch that the House lost N652, 425,150 to smart alecks in the deal. This includes the N417,486,500 overpayment as the actual cost of the cars was N1,938,000,000 as opposed to the N2,359,486,500 paid to PAN.
For the purchase of such high number of vehicles, the House ought to have been offered a discount of between 10 and 20 percent. But sources said this aspect of the deal was not reflected in the official documents of the deal. Those who spoke to Newswatch agued that PAN dealers who do not buy as many vehicles as the House of Representatives did, are usually given 10 percent discount.
A 10 percent discount would have fetched the House N235,948,650. "Can the dealers be more magnanimous in discount than the manufacturers?" the legislators said in a note attached to the documents on the contentious deal.
They said that before the image of the House is dragged further into the mud, the issue should be probed. But the legislators are in a fix. No one as yet was ready to lead the crusade and call for an investigation of the shady deal on the floor of the House. They feared that Dimeji Bankole, speaker and the leadership of the House who was yet to announce the composition of the new committees, by press time last week, would sideline anyone who raises the issue now.
One legislator told Newswatch that when the scandal blew open, the speaker moved deftly to stave off investigations. First, his spokesmen dismissed all allegations of graft levelled against Bankole. They claimed that he was not involved in the purchase but that the entire transaction was handled by the NASS management. Then, he dissolved all committees and thereafter, the House went on a five week recess.
Similarly, Usman Nafada, deputy speaker and chairman of the committee that superintended the execution of the contract denied allegations of corrupt practices. By press time last week, it was not clear who lead the call for a probe into Bankole’s action barely one year after he succeeded Patricia Etteh on November 1, 2007. The former speaker and Babangida Nguroje, her deputy, stepped down from office on October 30, 2007 when their colleagues were about to commence impeachment proceedings against them over contracts for the renovation of their official quarters. Although a sum of N628 million was bandied about, only N238 million was for the renovation of Etteh’s house. Even so, only N53 million had been paid out, representing 25 percent.
Those rooting for a full scale probe of the current scandal believed that, if properly investigated, it would affect some members of the leadership of the House. Documents made available to Newswatch showed that Bankole indeed approved the purchase. On December 12, 2007, at an executive session, the House had decided to buy five Peugeot 407 ST sport (auto) 2.0 litre-engine cars for each of its 76 committees at the total cost of N2,359,486,500, that is N6,209,175 each. "The necessity to procure these vehicles was to enable the committees to perform their oversight functions effectively," minutes of the session said. It was signed by Niyi Ajiboye, acting clerk of the house. Nafada was asked to oversee the transaction.
The following day, Aliyu Dikko, deputy chairman, House Services Committee, fired a memo to Bankole requesting for final endorsement of the deal. He wrote: "Following the executive session held on 12 December, 2007, it has been resolved that the House procures 380 no. 407 direct from the manufacturers (PAN) for its committees. This is to maximize value for money, reduce cost and enjoy after sales services among others. In view of the above, you may wish to kindly direct management to liaise and make necessary arrangement for the direct purchase of these cars from PAN."
Three officers minuted this memo. The first person, said to be the speaker, marked his ‘A.’ He wrote: "Pls process." It was dated 13/12/07. The following day, Ajiboye endorsed it to CNA, that is, Clerk of the National Assembly. "Pls see the approval in ‘A’ and direct further processing," he said. The CNA, in turn, forwarded it to ‘DPLB/DEW/DFS on 14/12/07 saying "Process purchase through PAN accordingly."
A week later, on December 21, PAN sent in a "Proforma for Peugeot 407 ST pack." The letter signed by Haroun Aliyu, general manager, Commercial Division read: "We wish to submit a price offer for 380 units of our 407 ST Sport (auto) valued at N2,359,486,500 (Two billion, three hundred and fifty nine million, four hundred and eighty six thousand, five hundred naira only) and a copy of the 407 brochure for your consideration." This put the car’s price at N6,209,175.
Also, in the brochure, PAN gave the price of its 407 comfort 2.0 auto as N5,100,000 as well as a comprehensive recommended public price list. Prices of other brands in the Peugeot family were equally listed.
The lawmakers chose the premium model which costs N6.2 million each. They were attracted by its special features which include side electric mirror that is "electrically foldable", six loader cartridge in the boot, side chrome with body colour coded, parking assist sensors, leather seat and rear arm rest with cup holders. All these are not part of the accessories in the comfort version.
On January 3, 2008, the contract was awarded to PAN through a letter to the company’s managing director with reference number H/RDCHS/08/02. It was signed by Mansur S. Jarkasa, on behalf of the CNA. "I am pleased to inform you that the House of Representatives….considered and approved the direct procurement of 380 no. Peugeot 407 ST (Sports) auto from your company…You should liaise with the Department of Finance & Supplies for the payment of mobilisation of N1,500,000,000 (One billion, five hundred million naira) only," he wrote.
Key officials of NASS management and Bankole signed the final approval for payment of the mobilisation fee on February 12, 2008. PAN promised to "conform to the pattern and description" of the goods, that is the cars.
But when the vehicles were supplied, lawmakers who had previously used the premium auto model and knew the difference discovered that something was wrong. They knew that PAN did not adhere to the terms of the contract as it supplied a model which costs N5.1 million each instead of the one the House had ordered for at N6.2 million each. "What they gave us was not what we agreed upon; how can they give us that car for that price," a lawmaker said, adding "We are just resuming and we hope that people would be able to speak on it. A case has been established that the car was not worth what they claimed to have paid for it. They should explain why they bought it for N6.2 million."
Another legislator said the current case is worse than Etteh’s. "In Etteh’s case, she was axed for N53 million. We demand an explanation on why those who spent N2.4 billion to buy ordinary cars that should have cost N1.9 billion should remain in office," he said, adding "Bankole has been complaining to representatives about how south-south governors spent billions of naira allocated to them. We too are asking questions on how he has spent our money on vehicles other than what we specified."
On August 12, Farida Waziri, boss of the Economic and Financial Crimes Commission, EFCC, paid an unscheduled visit to Bankole. Coming on the heels of a report on the scam, some lawmakers felt she quizzed the speaker, more so as she had earlier declared that nobody was above the law. "There is nothing special about members (of the National Assembly). Everybody who breaks the laws of the land would be taken on," she had said.
Three weeks later, on September 4, at a forum on "Innovative strategies to combat money laundering and cyber crimes" in Abuja, Bankole fired back at the EFCC to direct its energies at the executive arm of government, the true money launderers and leave the House alone. "Members of the House of Representatives do not spend this money, it is the executive that does. If they are executing and the figures are popping up like this and you are going after the pick pockets when the real armed robber is on the street there, it is wrong," he said.
He charged further: "If that is the case, then I am sorry you are missing it. You asked for us to support the EFCC. Well, may be you should also advise the press that when your chief executive comes to us or calls on me for a meeting, you do not spread it the next morning and say they have come to quiz me. If we are truly serious about doing this business, we go after the biggest spenders in government. It is as simple as that. However, it is not a clarion call to be attacking ministers or civil servants and the rest of them."
Those who spoke to Newswatch described this as a subtle threat to ward off the prying eyes of the anti-corruption agency. Bankole turned down a request for an interview on the vehicle purchase deal on Friday, September 5, when Newswatch called at his office. He reportedly claimed that he already had a copy of the 40 page document being circulated by his detractors and that it amounted to nothing. However, he mandated Kayode Odunaro, his special assistant, communications, to address the questions.
Odunaro said Nigerians should blame the management of NASS for any problem that arose from the contract and not Bankole. He said that three contractors who did not get the job as they used to in the past managed to ferret out the details of the contract and are using it to foment trouble for the speaker. Even so, he tried to absolve his boss as he said that he was not involved in the purchase and that Nafada, his deputy, supervised the execution of the contract.
On PAN’s supply of a model lower in quality to what the House ordered, Odunaro said the legislators did not know that there are various versions of the car. "It was when this trouble started that many of them became aware of that," he told Newswatch. A source said that in effect, those who supplied and took delivery of the cars had exploited legislators’ ignorance to shortchange them.
Monima Daminabo, director of information and publication, NASS, told Newswatch that he could not comment on the issue when contacted. "I cannot answer your questions. They are beyond me," he said. He was not forthcoming either on the disparity in the model of car requested and the one supplied. "I don’t have PAN’s letter on the type requested," he said.
PAN’s spokesmen were also not available for comment on the festering scandal. They were said to have travelled out of Kaduna last week. One of them, Rabiu Abdullahi in a telephone chat said he was incompetent to speak on the N2.4 billion car scam. He promised to make available his superior’s telephone number. But he never did till press time.
As things are, Nigerians have not heard the last on the first monumental fraud perpetrated within 42 days after Bankole took over from Etteh. "It promises to be a litmus test of the integrity of every member of the House," a source said.
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